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States Pushing Medicaid Ruling to Cut Rolls Immediately

It’s true that states could, after 2014, reduce their Medicaid rolls without the potential consequences of losing their entire federal share of funding. But some states aren’t waiting until 2014.

The court, which upheld most of the law, struck down penalties for states choosing not to expand Medicaid. A few states are also trying to go farther, arguing that the ruling justifies cuts to their existing programs.

Within hours of the Supreme Court’s ruling on June 28, lawyers in the Maine attorney general’s office began preparing a legal argument to allow health officials to strike more than 20,000 Medicaid recipients from the state’s rolls—including 19- and 20-year-olds—beginning in October to save $10 million by next July.

“We think we’re on solid legal ground,” Attorney General William Schneider said in an interview. “We’re going to reduce eligibility back to the base levels in a couple of areas,” he said. Maine, like some other states eyeing cuts, earlier expanded its Medicaid program beyond national requirements.

Other states, including Wisconsin and Alabama, are expected to follow Maine’s lead, though there is disagreement over whether the high court gave the states such leeway. That could lead to battles between states and the federal government that could drag the health law back to the courts. New Jersey and Indiana also said they were evaluating the decision and did not rule out challenging the requirements.

This looks to me like an expansion of what the Court actually said. The Court’s ruling specifically regarded tying the Medicaid expansion to the initial program funding as unconstitutional. If the cuts contemplated now started before the expansion, that seems to fall under the same maintenance of effort rules that remain in place until 2014. This will take further litigation and a new ruling to figure out.

But it does show that states view the Medicaid program as something to raid, not something to nurture. They want to push the limits of the ruling to make as many cuts as possible. So suggestions that red state governors will not be able to pass up a “good deal” like the Medicaid expansion doesn’t match with this reality.

Meanwhile, given these statistics out of Texas, it’s not clear whether an expansion will really result in an expansion.

The number of Texas doctors willing to accept government-funded health insurance plans for the poor and the elderly is dropping dramatically amid complaints about low pay and red tape, showed a survey by the Texas Medical Association provided to The Associated Press on Sunday before its Monday release.

Only 31 percent of Texas doctors said they were accepting new patients who rely on Medicaid, the health insurance program for the poor and disabled. In 2010, the last time the survey was taken, 42 percent of doctors accepted new Medicaid patients. In 2000, that number was 67 percent.

Texas doesn’t have enough primary-care doctors to serve the size of the state or its rapid population growth. The doctors’ reluctance to take on new Medicaid patients comes at a bad time, since the new federal health care law proposes adding 6 million additional people to the Texas Medicaid rolls with the intent of ensuring every U.S. citizen has access to health insurance. The state ranks last in the nation in terms of percentage of people insured, with 27 percent of Texans without any kind of insurance, according to a March Gallup poll.

Obviously, having health insurance coverage that 31% of doctors will honor is better than having no coverage at all. But geographic distribution matters here. Texas is a big place, and a low-income resident, on the off chance that the state expands its Medicaid coverage, may not be able to find a doctor for many miles. The primary-care doctor problem is central to this debate. States predisposed to reject the expansion will justify it by saying they don’t have the resources to accommodate all these new eligible patients on the Medicaid rolls.

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David Dayen

David Dayen