Partial Medicaid expansion with Affordable Care Act matching funds could limit state spending, but it will come at the cost of fewer people insured than full Medicaid expansion, according to the Kaiser Family Foundation.
Only about a dozen states haven't expanded Medicaid and aren't working on an expansion plan. Now, a handful of the non-expansion states, including Georgia and Utah, are looking at partial expansion.
Limiting Medicaid expansion would mean more members in subsidized ACA plans. That would result in higher federal costs since the federal government pays all of the marketplace subsidies, KFF says. Medicaid costs, on the other hand, are shared between the states and federal government.
Medicaid expansion, which was a vital part of the ACA, allows states to expand eligibility to up to 138% of the federal poverty level. That's a little over $17,000 for one person this year.
The federal government provides 93% of the funding for expansion now. That will dip to 90% starting in 2020.
Some states are seeking Section 1115 demonstration waivers from CMS to expand the program partially. Proponents see a partial expansion as a way to get more people covered and enjoy higher funding from the feds, while limiting costs to the state.
One state looking for a limited expansion is Utah. Voters in that state voted to approve Medicaid expansion last fall. However, the state legislature recently backed legislation to request a CMS waiver for a more limited expansion.
However, opponents of the measure say it will mean people between 100% and 138% of the federal poverty level will be in ACA plans rather than Medicaid. KFF warned that a partial expansion could result in people facing higher premiums and cost sharing in the ACA exchanges. That could lead to people dropping coverage and not getting needed healthcare services.
An ACA plan may also not offer the breadth of coverage enjoyed by Medicaid recipients. That includes mental health and substance use disorder services, long-term care, prescription drugs and rehabilitative services. Those services are more comprehensive in Medicaid than the ACA marketplace, KFF said.
Full expansion also strengthens the exchanges' risk pool, which lowers premiums. Partial expansion would not give that benefit, KFF said.
Partial expansions aren't the only Medicaid waivers being discussed. CMS has also granted waivers for work requirements. KFF suggested states could also "restrict beneficiary freedom of choice for family planning services" — requests that could come from South Carolina, Tennessee and Texas.