Court’s Ruling on Medicaid Disrupts Obamacare and Leaves More Unanswered Questions for States

June 28, 2012

Obamacare proponents frequently claim that the law will cover approximately 30 million people when fully implemented. However, how they plan to achieve this goal is rarely discussed. In addition to exchange subsidies, approximately 20 million individuals will be swept into a massive Medicaid expansion in 2014. Governors across the country opposed this Medicaid expansion because it would tie their hands with new federal mandates and would ultimately require significant state financial resources.

Today, the Supreme Court ruled that the federal government cannot punish states by cutting off all Medicaid funds to those that choose not to participate in the massive program and spending expansion. While this small decision is good news for states’ rights, it raises new questions about the cost and construct of the law. Should a state decide to exercise its constitutional right to reject an unaffordable Medicaid expansion, what will it mean for the other Medicaid mandates attached to the law? How many more people will be pushed into a system of subsidies and government control? And, how much more will that cost the taxpayers? Federal government costs could spike even higher because more Americans will be pushed into government-approved and taxpayer-funded subsidized exchanges. Meanwhile, states are still facing burdensome maintenance of effort requirements and other provisions that drive up their costs and prevent them from taking innovative approaches to improve the efficiency and effectiveness of their Medicaid programs.

The ruling creates more uncertainty for states trying to navigate Obamacare’s intricate web. That's why Republicans are committed to repealing the law in its entirety so we can pursue health care reforms on a clean slate and enact common-sense, step-by-step reforms that protect Americans’ access to the care they need, from the doctor they choose, at a lower cost.