State Medicaid expansion: Realizing the promise of Health Care Reform for people with HIV

In June 2012, the Supreme Court largely upheld health care reform — the Affordable Care Act (ACA) — in a huge victory for millions of Americans, including those living with HIV. However, at the same time, the court also removed an important enforcement tool that could endanger health care access for the poorest and most vulnerable Americans.

The original ACA statute allowed the federal government to refuse funding to existing state Medicaid programs if a state did not expand its program to serve everyone under 138% of Federal Poverty Level (FPL) or about $15,000 annually for one person. In return, the federal government would fund 100% of the expanded program for the first three years and no less than 90% for the life of the program.

The court struck down the provision that allowed the federal government to withhold traditional Medicaid funds if a state refused to expand its Medicaid. States can now choose to refuse federal money to serve this vulnerable population and leave millions of people across America — including people living with HIV/AIDS — without access to affordable health care.

Several states have already declared that they will not expand Medicaid, including Texas, Florida, Louisiana, Mississippi and South Carolina. Ten states have indicated that they are moving forward with the expansion, while the rest of the states are currently undecided. Click here to learn more about where states stand: http://leanforward.msnbc.com.

It is difficult to know how much of the current refusal of federally funded expansion is fueled by election year politics and could be reversed as states realize the implications for individual and public health, health care costs, and parity of access to health care. But it is clear that advocates will have to work hard to ensure that states take up this important program. People with HIV are particularly impacted by states’ decisions on Medicaid as initial estimates show that between 50–70% of uninsured HIV-positive individuals will depend on Medicaid for access to HIV care under health care reform.

The Supreme Court ruling also left confusion about what would happen if states made the decision not to implement Medicaid expansion on January 1, 2014. The Centers for Medicare and Medicaid Services (CMS) has been issuing statements and guidance intended to create a road map for states and advocates outlining the various decisions states can make under this ruling. CMS has made it clear that there is not a timeline for states to take up the expansion, meaning that a state does not have to start the program on January 1, 2014.

However, the 100% federal funding of the program only remains in place for three years starting in 2014. After 2016, there is a gradual decrease but the federal contribution continues at 90% for the life of the program, much more than most states receive in federal funding for traditional Medicaid. States may also drop the Medicaid expansion at any time without penalty.

There is speculation that some states may want to do a partial expansion. CMS held a stakeholder call on September 13 in which Cindy Mann, Director of Centers for Medicaid and CHIP Services and CMS Deputy Administrator, indicated that CMS is not considering developing guidance for partial expansions that would serve people at less than 138% FPL, at least through 2016, when the federal funding begins to decrease. This would indicate that partial expansions will not be allowed but the final decision has not been announced and likely will not be prior to the election.

In addition, CMS officials indicated that they are proceeding on guidance for another complex issue related to Medicaid expansion. Hospitals that serve the uninsured receive payments for uncompensated care, known as disproportionate share hospital (DSH) payments. Under health care reform those payments were to be reduced because most people would qualify for insurance coverage under Medicaid expansion or the Exchanges.

Currently, if a state did not expand its Medicaid program, there is no provision to stop the reduction in payments. CMS has not yet indicated what the guidance will say but in other venues, some Medicaid officials have indicated that CMS is leaning toward reducing DHS payments regardless of a state’s decision on expansion. Some speculate that not reducing payments would essentially “reward” states for refusing to take up expansion. However, if states refuse Medicaid expansion and DSH payments are reduced, people who depend on public hospitals for acute and emergency care will face a serious lack of access to care.

Project Inform and its advocacy partners are continuing to work toward full Medicaid expansion in every state. Medicaid is key to ensuring that the promise of health care reform is realized for people living with HIV and others in need of access to affordable and quality health care. It is the only way to ensure that we meet the goals of the National HIV/AIDS Strategy, reduce disparities in HIV health care, and move towards ending the epidemic. In addition, expanding Medicaid makes fiscal sense for states.

A Bloomberg News interview gave an example, if Texas expanded Medicaid, approximately 1.8 million adults would get coverage. The state’s cost for Medicaid would increase by $2.6 billion in the first six years, only three percent more than projections for current Medicaid coverage increases in the same time period. In addition that $2.6 billion would bring $52.5 billion in federal dollars to Texas and the state would save on providing emergency, acute and health clinic care to uninsured Texas. Read the full interview: www.bna.com.

To find out how to work with your state on ensuring Medicaid expansion for all who need it, continue to check www.hivhealthreform.org. The Families USA Medicaid expansion center, www.familiesusa.org and the National Health Law Program www.healthlaw.org have materials to help state advocates understand the implications of the Supreme Court ruling and work with their states.

Kaiser Family Foundation, www.kff.org also provides resources on Medicaid expansion. The Center for Budget and Policy Priorities is another source for information about the economics of health care reform, www.cbpp.org.