CMS interpreting the Red State Option after NFIB

The Supreme Court’s decision in National Federation of Independent Business (NFIB) is a mess on Medicaid. The Court doesn’t say exactly how the new Red State Option will work.

Cue the legal analysis. Sara Rosenbaum and Tim Westmoreland argued in the pages of Health Affairs this week as well as a related blog post that the federal government has much less flexibility after NFIB than some officials seem to think.  Austin blogged on this last week, also pointing out that the ACA put new limits on the Medicaid waiver process.

Nevertheless, Cindy Mann, director of Medicaid/CHIP at CMS went to the National Conference of State Legislators annual conference (the best gig in the state and local lobbying business, by the way) and told the assembled crowd a different story:

…CMS has been studying the U.S. Supreme Court’s recent ruling with respect to Medicaid expansion and has determined the court intended for “a truly voluntary expansion.”

In line with that view, Mann said CMS would permit states to refuse the government’s funding and technical assistance for Medicaid expansion, but join the program at a later date. Similarly, states enrolling in the Medicaid expansion would be able to drop the program at a later date.

“In other words, it is a truly voluntary expansion,” Mann told lawmakers attending the National Conference of State Legislatures (NCSL) annual meeting here. “You can come in, in time for January 2014. You can come in later, if you choose to. You can not come in at all, if you choose to. And if you come in, you can choose to leave. We think that is consistent with the nature of the court’s decision to make it a voluntary program.”

The full Bloomberg BNA story is gated. Three points:

  1. The Obama Administration is STILL trying to win over opponents in good faith to expand health care coverage.
  2. Whatever the states decide, it will be their decision and therefore their responsibility.
  3. Rosenbaum, Westmoreland and others make good legal points; another round of litigation is still possible from disgruntled states, but it is harder for them to argue that the feds are being too flexible. Lawsuits from others will face difficult standing issues, only partially addressed by the other Supreme Court Medicaid case this term, Douglas v. ILC.



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