As part of the healthcare reform package upheld by SCOTUS, the fourth issue known as “Medicaid coercion” was approved.  This mandates that states provide Medicaid coverage for basically all poor Americans under the age of 65 which is vastly more than what the government previously required or risk losing all of the Medicaid funding that the federal government offers.

Of course, conveyance of medicaid funds are not without stipulations and Congress can put strings on the money that the states get. Regardless of the strings, the states don’t really have a choice as to compliance with any new requirements attached to this.

Despite federal funding, supporting Medicaid programs will come from the individual states.  Currently the government pays just over half and the states pick up the rest.  Can they afford this? Remember, there are several states that are currently close to bankruptcy now. Like California, the state coffers have shrunken and the demands placed on them are ever increasing. Robert Laszewski, president of Health Policy and Strategy Associates in Alexandria, VA warns:

“You’ve got a lot of conservative governors saying you can’t force us to expand Medicaid this way.  We can’t afford it” While the government cannot take away the original Medicaid funding, if you don’t accept terms to expand Medicaid, ” Go face your constituents and tell them why you didn’t expand Medicaid like the other states”.

The Medicaid expansion is paid by the feds between 2013- 2016 after which the percentage ebbs.  By 2020, states are required to pay 10%.  While ten percent doesn’t sound like a great deal, many states are complaining that the amount would be crippling. Governor Nathan Deal of Georgia says “even with federal help, the state would have to find another $4.5 billion over the next 10 years to pay for the Medicaid expansion.

Governor Mitch Daniels of Indiana states that the expansion would put a quarter of the state population on Medicaid, costing in excess of $2 billion over the next ten years.

New York will have to find more than $1 billion dollars to administer the Medicaid expansion. This is directly related to the new patients that would become eligible for Medicaid as the expansion takes effect.


Another thing to remember is that while everyone having medicaid may sound great for a segment of the population, possession of this coverage may have frustrations of its own.  In order to make use of the medicaid coverage, you must consult with a physician that participates in the Medicaid program.  If there are no doctors available that accept medicaid, having this coverage will be meaningless.

Unless of course, the government once again intervenes and “kindly coerces” (mandates) every doctor to take Medicaid as a stipulation to practice medicine.