Medicaid Moves to the Front Burner of Health Care Reform Debate

In the wake of the U.S. Supreme Court’s decision on the federal health care law, policy makers and health care providers are still trying to understand the impact of the decision on Medicaid. Now that people have had time to digest the changes to the program that were implemented by the Court, Washington is starting to send out its first indications on how it will proceed with the program.

On Tuesday, Health and Human Services Secretary Kathleen Sebelius wrote to governors with her intentions in the aftermath of the Court’s decision. While reiterating President Obama’s comments that it is time to move forward with the law, Secretary Sebelius once again stated that it was her intent to provide states with “as much flexibility as we can” to put the law and its related tax provisions into effect. Just how flexible HHS is willing to be will be tested by a number of states in the coming months.

With the Court’s decision giving states the ability to opt out of the proposed expansion of eligibility, the balance of power in the largest joint state-federal program has shifted. While acknowledging that states are now given the ability to decide on participation, the Secretary went to great lengths to encourage states to accede to Washington’s wishes and implement the Medicaid expansion. As part of this effort, the Department announced a series of regional implementation forums across the country to allow states and stakeholders to ask questions about how to implement the Obamacare program. The closest meeting to Iowa is in Chicago on August 2.

While all the states continue to assess the Court’s decision on their Medicaid programs, several states are already moving to find out just how far they can go under the new rules. A number of Republican governors have already stated that they will not support implementing the Medicaid expansion in their states. These include Bobby Jindal and Rick Perry.

In Maine, Governor Paul LaPage has announced that his state would begin to make changes to the services offered by their state’s Medicaid program. Previously, Congress had enacted a five year maintenance of effort requirement that prohibited states from making programmatic changes for services to adults. Maine is contending that with the Supreme Court’s decision, the prohibition does not apply anymore. Other states, like Indiana, are exploring what options they may have to change their program for adults.