What happens if a state refuses to expand Medicaid? Ctd.

John Graves, Assistant Professor at Vanderbilt University School of Medicine, writes me about my prior post,

Just wanted to touch base briefly on the Medicaid ruling and your post from today.  […] What Jared B. says is basically true.  But it’s actually folks <100% (not <133% FPL) that are ineligible for exchange subsidies.  The ACA allows for a small sliver of folks between 100-133% FPL, who AREN’T eligible for Medicaid, to claim the exchange premium tax credit (and for them, the credit caps their contribution to the premium at 2% of income).   So if a state decides to opt out of the expansion, that leaves folks under 100% likely exempt from the mandate, but with no access to federal subsidies.

Interestingly, this point was key in the constitutional challenge of the Medicaid expansion.  Since the exchange premium tax credit schedule begins at 100% FPL and not 0% FPL, it was argued, the ACA basically assumes that states will keep their Medicaid programs to cover folks under the poverty line.  This, they argued, is coercion.  Jim Blumstein, my colleague here at Vanderbilt, has written extensively on this — both in a NEJM perspectives piece last fall, and in an Amicus brief filed in the Florida challenge against the ACA.

Here’s the NEJM piece (see bottom of 2nd paragraph) and here’s the amicus brief (pdf, see top of page 16).


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