ACA’S Medicaid Expansion Upheld by the Supreme Court

On June 28, 2012, public attention to the United States Supreme Court swelled, as that eminent body handed down its landmark decision in Natl. Federation of Independent Business v. Sebelius, 567 U. S. ____ (2012).

Lost in the drama of the day, perhaps, are the practical effects of the law that was allowed to remain on the books, i.e. the Affordable Care Act (ACA).  Political concerns may alter the structure of the law in the coming months and years, but lawyers and citizens alike should be acquainted with what the law prescribes.

One of the major issues in Natl. Federation of Independent Business v. Sebelius was whether the Federal Government can withhold all Medicaid funds from states which decline to participate in the Medicaid Expansion for which the ACA provides.  The Supreme Court held that the Federal Government could not condition the availability of all Medicaid funds on a state’s acceptance of the expansion. If a state refuses to participate in the ACA Medicaid expansion, it will still receive the same Medicaid funding that it has been getting; it will not, however, be entitled to additional funds. Why would a state decline money?  In this case, the Medicaid Expansion is a fairly sweeping plan–a plan that, even with additional funding, could in theory stretch state resources to the breaking point.  

Here is a look at just a handful of the new provisions of the Medicaid Expansion (if the law remains unaltered by the political process):

  • More people will be eligible for Medicaid. Medicaid eligibility is expanded to 133% of the poverty level for most low-income individuals under 65 who are not eligible for Medicare.
  • Those not eligible for Medicaid but still under 200% of the Federal Poverty Level can qualify for assistance. A state can be given subsidies to contract with private health plans to provide coverage for low-income individuals under 200% of the poverty level.
  • A “benchmark coverage” standard is set for new Medicaid beneficiaries. Those qualifying for coverage under Medicaid can expect a certain quality of health coverage.  The law requires the basic plan to expand coverage:  mental health services, prescription drugs, ambulance service, maternity care, and dental work are some services that will be covered after the Expansion.
  • Enrollment procedures and data-sharing are to be streamlined. The law requires the enrollment process to be relatively painless for people applying for aid. States must establish a secure, efficient electronic network for easy (but secure) exchange of patient information.

The law includes many more details, programs, and changes. If you think you might be eligible for Medicaid or another expanded service under the new law, you will have to be patient and diligent: the law does not fully take effect until 2014, and the states may enact it in different ways.  Some states might attempt to roll out the new programs quickly. Others may try a gradual approach.  Still other states may wait until the last minute due to budgetary concerns—full Federal funding does not start until the 2014 date.

The law—whether one approves of it or not—certainly will extend benefits to many people who have not been covered before, but how the law will be implemented in Michigan remains to be seen.

Amanda Narvaes

Amanda P. Narvaes, a Partner, joined Drew Cooper & Anding in 2011. Ms. Narvaes is a civil litigator in the areas of complex commercial litigation, lender liability, copyright litigation, and consumer protection. She graduated cum laude from Carleton College with a bachelor’s degree in history. She earned her law degree at WMU-Thomas M. Cooley Law School, graduating magna cum laude, and received Cooley’s Distinguished Student Award. Ms. Narvaes represents clients before Michigan trial courts across the state and in the Michigan Court of Appeals, and before the United States District Courts for the Western and Eastern District of Michigan. Ms. Narvaes has been a guest speaker in Ron Foster’s “Litigation for Paralegals” class. Ms. Narvaes discusses differences between Federal civil discovery rules and Michigan civil discovery rules.