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Federal Government Warns States That Medicaid Expansion Delay May Cost Them

In the wake of this year’s Supreme Court decision that overturned the Medicaid expansion requirements imposed by the Patient Protection and Affordable Care Act and allowed individual states to choose to opt-in or opt-out, Federal health officials have recently warned states that a delay in adopting the expansion could result in lost federal dollars.

In letters sent to state officials, Federal health officials said that states have the option to expand Medicaid and can choose to change their minds about adopting the policies or not. The letter also explained that a state that chooses to expand Medicaid as outlined in the federal health care law and covers the expansion group can later choose to cease providing that coverage. The proposed expansion would allow anyone making up to 133 percent of the federal poverty limit to receive Medicaid.

At stake are potentially billions of dollars. The federal government will pay for the Medicaid expansion to the tune of 100 percent from between 2014 and 2016. By 2017 that percentage will decrease to 95 percent, with a gradual decrease down to 90 percent by 2020.

States are determining whether they’ll participate in the expansion or not. Many are having budgetary problems and aren’t able to pay for their share of the current Medicaid program. Some states have expressed interest in expanding, while others have stated they will not participate.

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