The secretary of the Health and Human Services Department, Kathleen Sibelius, recently sent a letter to state governors telling them that states that chose to implement a partial Medicaid expansion under the terms of the patient protection and affordable care act would not receive full federal matching funds to cover the costs.
The administration is pressuring states to implement the full expansion as outlined under the Obama healthcare law, which would allow for any individual or family earning up to 133% of the federal poverty limit to receive health care coverage through Medicaid.
While a handful of states have already stated they will not expand Medicaid, others have begun expansion already while some are still trying to determine if they should expand the program. Under the terms of the healthcare law the federal government would pay for 100% of the costs states incur in expanding Medicaid for the first several years. After that, states would have to take on a larger percentage of the cost, but would be responsible for no more than 10% by 2020.
Sibelius’s letter to the states stated that the federal government would pay for the costs as outlined under the healthcare law but only if states implemented the entire expansion. Because the deadline for this expansion is January 2014, states will likely be wrestling with the decision to expand in the coming year.