The Results Are In: Supreme Court Upholds Obamacare, Limited Medicaid Expansion

***Update*** Includes text of Supreme Court decision on Medicaid expansion

In what some are calling the “decision of a century,” the Supreme Court ruled today to essentially uphold the Affordable Care Act, including the provision that is arguably the most relevant to the skilled nursing industry: Medicaid expansion.

“The bottom line: the entire ACA is upheld, with the exception that the federal government’s power to terminate states’ Medicaid funds is narrowly read,” said the site publisher of the SCOTUS blog, Tom Goldstein, minutes after the ruling.

The health care reform provision to expand Medicaid eligibility and coverage is probably the biggest aspect of how health care reform will directly impact the skilled nursing industry, says Greg Crist, vice president of public policy at trade group the American Health Care Association (AHCA).

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Eligibility for participation in the Medicaid program has been expanded to cover nearly all non-disabled adults younger than age 65 with household incomes at or beneath 133% of the federal poverty level—for about 17 million new beneficiaries—starting in January of 2014.

Medicaid has been expanded before, but under the ACA, funding is going to be slightly different, says Kaiser Health News: “The ACA provides that the federal government will not cover its normal share, but rather 100% of the states’ costs of the coverage expansion from 2014 through 2016, gradually decreasing to 90% in 2020 and thereafter.”

The issue was, starting in 2017 states will be responsible 10% of those extra coverage costs, but most states have not, so far, made any indication they’d be putting more funds toward their Medicaid programs, says Crist. That means the existing Medicaid funds would have to be split even more ways than before—and it could spell more cuts for nursing homes.

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Led by Florida, 26 states filed a lawsuit against the Department of Health and Human Services challenging the ACA’s Medicaid expansion provision, saying it was “unconstitutionally coercive of states,” says the Kaiser Health News brief.

If states are unhappy with the direction Medicaid is headed in, they can just opt out—it’s a voluntary program. For many, though, it’s not that easy. All states currently participate, and they depend on the federal matching funds to cover the costs of services to eligible individuals, including about 60% of the nursing home population.

Simply disregarding the expanded eligibility provision isn’t really an option, either: non-compliance with federal requirements can result in states losing their federal funding.

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Here’s what the Chief Justice John Roberts had to say in his decision:

Instead of simply refusing to grant the new funds to States that will not accept the new conditions, Congress has also threatened to withhold those States’ existing Medicaid funds. The States claim that this threat serves no purpose other than to force unwilling States to sign up for the dramatic expansion in health care coverage effected by the Act.

Given the nature of the threat and the programs at issue here, we must agree. We have upheld Congress’s authority to condition the receipt of funds on the States’ complying with restrictions on the use of those funds, because that is the means by which Congress ensures that the funds are spent according to its view of the “general Welfare.” Conditions that do not here govern the use of the funds, however, cannot be justified on that basis.

Leading up to the Supreme Court ruling on the ACA, AHCA was considering what could happen pending either decision.

“If it’s not struck down, it could have potentially negative repercussions,” Crist said prior to the ruling. “That’s the concern: It’ll be more groups competing for the same fixed amount.”

It was difficult to make any sort of preparation in advance of the ruling, Crist had said, but with the Court’s decision, providers will have to take action.

“There [was] no real clear path [on which to proceed],” he said.

Now the hard work begins, he says, to make sure lawmakers are educated on the skilled nursing industry’s needs now that the expansion has—at least in part—been upheld.

View the Supreme Court decision.

Written by Alyssa Gerace

We’ll post more information about what the “limited Medicaid expansion” means as it becomes available.