On June 28, in one of its most anticipated rulings ever, the U.S. Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act.
The surprise ruling was a disappointing loss to 26 states (including Georgia) that had sued the federal government, saying Congress had exceeded its power by requiring citizens to buy health insurance.
What does the ruling mean for Georgia? A major blow? Maybe not.
Although the Supreme Court upheld the major provision of the ACA that mandates individuals to purchase health insurance coverage or pay a tax for not having coverage is within the rights of Congress, it did give states the option to not expand Medicaid eligibility and still keep their current Medicaid funding.
This is an important exemption and is what Georgia feared the most with the ACA from a fiscal perspective.
Currently, all states receive federal matching funds known as Federal Medical Assistance Percentage for their Medicaid programs. FMAPs are calculated based on each state’s per capita income and may vary from year to year. In Georgia, the FMAP for FY 2013 is nearly 66 percent.
What this means is that for every dollar spent, 66 cents comes from the federal government and 34 cents comes from the state. The 66 cents is what is often referred to as draw-down dollars or matching funds. Some legislators refer to it as “the cheese in the trap.”
Even with this favorable formula, Georgia is having trouble coming up with its share. For the FY 2012 just ended, we are facing a $90.5 million deficit and for FY 2013 we are facing a deficit of nearly $308 million.
Currently, individuals under 65 with incomes at or below the federal poverty level are eligible for Medicaid. As originally passed by Congress, the ACA would have required states to expand Medicaid coverage to cover individuals with incomes up to 138 percent of FPL or risk losing all federal Medicaid funds.
The good news for Georgia is that the Supreme Court ruling gives states the option to not expand Medicaid eligibility and still keep their current Medicaid funding.
If not for this exemption, Georgia would have to add an estimated 620,000 individuals in 2014. This would increase the number on Medicaid from 17.6 percent today to 24.2 percent in 2014. Nearly one in four Georgians would be on Medicaid.
During the 10 year commitment to Medicaid expansion, Georgia would have nearly 700,000 new enrollees. The Department of Community Health estimates this expansion would result in more than $4.5 billion in additional state spending by 2023.
So just say no to Medicaid expansion, right? While many of us would agree that we should say no, others bring up a different view.
Why shouldn’t we take advantage of these federal funds that are available? After all, Georgians pay federal taxes and that’s just as much our money as anybody’s. Why should we sit back and watch other states expand their Medicaid roles with our federal tax dollars while we do nothing?
We spend $34 million to get $66 million in return, they say. Why shouldn’t we take advantage of that?
And in the case of the ACA mandated Medicaid expansion, the temptation is even greater. Over the 10-year commitment, the feds pay 100 percent for the first two years with a gradual decrease to 90 percent in 2020 and subsequent years.
Wow, money for the taking. How can we turn that down? Money for the taking or cheese in the trap?
Carter’s District 1 covers much of Liberty County. His Capitol office number is 404-656-5109. You can connect with him on Facebook at facebook.com/buddycarterga or follow him on Twitter @Buddy_Carter.