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Under the Supreme Court’s ruling on the Affordable Care Act (ACA), states may choose to expand their Medicaid populations to include individuals below 138 percent of the federal poverty level, with the federal government picking up 100 percent of payments for the first three years and then rolling back federal payments. This structure is designed to be attractive to the states, since it appears to increase health coverage at little or no state-level cost.
The Administration is selling the Medicaid expansion as a great benefit to the states, since the federal government foots a majority of the bill in the first years of implementation. However, even under the ACA, the expansion will begin putting pressure on state budgets as early as 2019.
Instead of adding millions to Medicaid, Washington should reform the program.