The Supreme Court of the United States recently issued its ruling on the Patient Protection and Affordable Care Act, declaring that the law’s “individual mandate” is constitutional and can stand as written. However, it also ruled that the Medicaid expansion provisions as written in the law are not allowable.
Under the health care law, states will have to expand Medicaid coverage to include anyone who qualifies under specific income guidelines. Previously, only the impoverished, elderly, those with disabilities, children, and low-income mothers could apply for Medicaid. The expanded coverage would allow an additional 15 million or more Americans to receive Medicaid.
However, the Supreme Court ruled that the way the law required states to comply is unconstitutional. Under the law, any state that chose not to adopt the new eligibility criteria—which were set to take effect in 2014—would have its federal Medicaid funding cut off. That amounts to about 10 percent of the budget for any state’s Medicaid program.
The court stated that while the federal government could offer states money and impose conditions if the states accepted, it could not take away funds it already provides if the states refuse to accept the additional funds. This essentially means that states will be able to choose if they want to participate in the expanded coverage provisions, though it is not clear how many will choose to join or not. Some states have already adopted the 2014 eligibility requirements, while others are planning on doing so before the 2014 deadline.
Michael Robinson, Estate Planning Attorney
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