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Medicaid Expansion Is Crucial for Direct-Care Workers

February 26, 2013

On June 28, 2012, the U.S. Supreme Court affirmed the constitutionality of the Affordable Care Act (ACA), but made optional the implementation of the ACA’s provision to expand Medicaid to individuals living in households with incomes under 138 percent of the federal poverty level ($26,344 for a family of three).

According to a November 2012 Urban Institute analysis (pdf) commissioned by the Kaiser Family Foundation, if all states were to implement the expansion, an additional 21.3 million individuals could gain Medicaid coverage by 2022.

The direct-care workforce, in particular, stands to benefit. Of the estimated 1 million uninsured direct-care workers, more than 350,000 workers would be newly eligible for Medicaid in 2014 if all states expand their programs, PHI estimates.

States Refusing Federal Funds

Currently, however, it appears at least one quarter of states will not proceed with the expansion and will forego enhanced federal matching funds included in the ACA. As of February 26, 14 states have decided they will not participate; 24 states have announced they will participate in the expansion; and 12 remainundecided.   

Many of the states refusing federal funds have cited financial considerations in their decision, but the federal government has committed to paying 100 percent of the states’ cost of covering newly eligible Medicaid beneficiaries from 2014 to 2016. While the federal share of the cost of coverage tapers down to 90 percent by 2020, the Urban Institute finds that states, as a whole, are still likely to see net savings of $10 billion over 2013-2022 from the Medicaid expansion due to state savings on uncompensated care and other factors that reduce cost.

There isn’t any deadline for states to make a decision to expand their Medicaid programs; however, federal coverage of the full cost from 2014-2016 is an incentive for states to embrace the expansion sooner rather than later.

Medicaid is an important source of coverage for tens of thousands of direct-care workers today, who due to low wages ($10.59/hour on average) and part-time work are unable to access employer-based insurance. Advocates for direct-care workers and other low-income workers and their families are banding together with hospitals and other providers to push for this expansion

To learn about your state’s plans, see the following resources:

For a consumer advocates’ guide to Medicaid expansion, go to PHI’s list of resources.

— by Gail MacInnes, PHI National Policy Analyst

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