Experts: Hard-line governors will cave on Medicaid expansion

Health policy leaders discussed the ACA provision at a Politico Pro event

Several health policy experts on Thursday predicted that most governors ultimately will decide to participate in the Affordable Care Act's (ACA) Medicaid expansion.

Under the ACA, the federal government will pay to expand Medicaid eligibility to people at or below 133% of the federal poverty line in 2014 in every U.S. state. Federal contributions to the expansion will drop to 95% in 2017 and remain at 90% after 2020, according to the ACA.

However, the Supreme Court's ruling on the law allowed states to opt out of the expansion, and several Republican governors have said their states will do so.

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Speaking at a Politico Pro event, Gail Wilensky—who served as CMS administrator during the George H.W. Bush administration—said she believes states that initially opt out of the expansion will reverse course in the coming years because of the promise of federal funding, which would cover 100% of expansion costs for the first several years. "Historically, when the match is high enough, the states come in," she noted.

Dan Mendelson, president of Avalere Health, also said he believes states will change their minds about opting out of the expansion, adding that the economic impact of the matching federal Medicaid funds would "overtake the politics."

Meanwhile, American Hospital Association President Rich Umbdenstock said states that opt out of the expansion could force safety-net facilities to face "devastating" spending cuts.

However, Umbdenstock indicated that he was less optimistic than Mendelson and Wilensky about states changing course on the expansion. He said there is little chance that all states would participate in the expansion after the Supreme Court struck down the penalties for opting out (Cheney, Politico, 11/29; Daly, Modern Healthcare, 11/29 [subscription required]).

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