Supreme Court Decision Has Potential to Impact Coverage of 22 Million

Supreme Court Decision Has Potential to Impact Coverage of 22 Million

Contact: Erica Garland, 202-745-5119, egarland@gymr.com

06.25.12

Washington, D.C. – The Supreme Court decision has the potential to impact coverage of approximately 22.4 million individuals who would have obtained Medicaid or subsidized exchange coverage by 2015 as a result of the Affordable Care Act, according to an Avalere analysis.

These 22.4 million individuals include roughly 7.5 million currently uninsured individuals who are expected to receive subsidies through exchanges and 14.9 currently uninsured individuals who are expected to enroll in Medicaid. This impact varies dramatically by state with nearly 3 million losing the opportunity to gain health insurance coverage in the state of California to less than 20,000 in Vermont.

The ACA requires that states expand Medicaid eligibility, beginning in 2014, to cover all individuals who are under age 65, are not eligible for Medicare, and have incomes below 133 percent of the federal poverty level (FPL). The health reform legislation also establishes health insurance exchanges, through which individuals with incomes between 133 and 400 percent FPL can receive subsidized coverage. The map to the right illustrates the number of currently uninsured individuals who are expected to have Medicaid coverage or receive exchange subsidies in 2015. The impact of the Supreme Court overturning the ACA varies by state based on the size of the currently uninsured population expected to receive federal subsidies for Exchange enrollment or enroll in Medicaid as a result of the law.

Disproportionate Impact Expected in Subset of States
Together, ten states—California, Texas, Florida, Illinois, North Carolina, Ohio, Georgia, Michigan, New York, and Pennsylvania—represent more than 55 percent of the expected 22.4 million currently uninsured individuals who stand to lose Medicaid and subsidized exchange coverage. Three states, California, Texas, and Florida, are expected to each enroll more than one million currently uninsured individuals in either Medicaid or subsidized exchange plans.

Medicaid Impact Could be More Profound than Estimated
Although coverage expansions take effect in 2014, a Supreme Court ruling overturning the Medicaid expansion would impact some states immediately. California, Connecticut, Colorado, Minnesota, Missouri, New Jersey, Washington, and the District of Columbia have already expanded or proposed to expand Medicaid eligibility early through new options made available by the ACA.¹ If the ACA is struck down, these states might reconsider policies to cover these populations.

In addition, if the ACA is ruled unconstitutional, the maintenance of effort (MOE) requirements in the law will also be eliminated. MOE requires that states keep pre-ACA Medicaid eligibility levels in place until exchanges are operational. However, absent the ACA requirement, many states are likely to enact eligibility cuts, resulting in additional individuals losing Medicaid coverage. Already, some states, such as Maine, have proposed to reduce Medicaid eligibility. Given that many states continue to experience dire fiscal conditions—33 are anticipating budget deficits in fiscal year (FY) 2013—Medicaid is likely to continue to remain a target for savings to bridge budget gaps.²

Methodology Note about Avalere Enrollment Model: The figures presented in this memo are from Avalere Health's proprietary enrollment model. Avalere's enrollment model projects how sources of coverage are expected to change as a result of the ACA over the next 10 years at the state level. Avalere's model draws on the data and assumptions from a range of sources, including the Census Bureau, the Centers for Medicare & Medicaid Services, the Congressional Budget Office, the Kaiser Family Foundation, and the Urban Institute.

¹ Kaiser Commission on Medicaid and the Uninsured. (May 2012). “How is the Affordable Care Act Leading to Changes in Medicaid Today? State Adoption of Five New Options.”
Available at: www.kff.org/medicaid/upload/8312.pdf

² Center on Budget and Policy Priorities (March 2012). "States Continue to Feel Recession's Impact."
Available at: http://www.cbpp.org/files/2-8-08sfp.pdf

Avalere Health is an advisory services company whose core purpose is to create innovative solutions to complex healthcare problems. Based in Washington DC, the firm delivers research, analysis, insight, and strategy for leaders in healthcare business and policy. Avalere's experts span 170 staff drawn from the federal government (e.g., CMS, OMB, CBO, and the Congress), Fortune 500 healthcare companies, top consultancies, and nonprofits. The firm offers deep substance in areas ranging from healthcare coverage and financing to the changing role of evidence in healthcare decision-making. Its focus on strategy is supported by a rigorous, in-house analytic research group that uses public and private data to generate quantitative insight. Through events, publications, and interactive programs, Avalere also translates real-time healthcare developments into actionable information.

Learn more at www.avalerehealth.net.

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