States Seek Clarification on Options After Supreme Court Ruling - July 17, 2012

In light of the Supreme Court’s Affordable Care Act (ACA) decision, states are now seeking clarification on the options available to them regarding exchanges, timetables and the Medicaid expansion. On July 10, the Republican Governors Association (RGA) sent the president a letter asking for more details about these provisions, including how gaps in coverage would be addressed in states that do not expand their Medicaid populations. The RGA also posed questions about disproportionate share hospital (DSH) payments, including when to expect the methodology for the impending DSH cuts included in the ACA and what states should expect if the number of uninsured in their state does not decrease.

Additionally, the National Governors Association (NGA) and the National Association of Medicaid Directors (NAMD) have sent letters to federal agencies looking for further clarification on states’ options regarding Medicaid. The NGA asked the U.S. Department of Health and Human Services (HHS) for further guidance as states deliberate next steps. NAMD asked the Centers for Medicare & Medicare Services (CMS) whether states are still subject to the ACA’s maintenance of effort requirements and whether DSH will still be reduced, as laid out in the ACA.

HHS Secretary Kathleen Sebelius responded with a letter to governors stating that the administration will work to establish hardship exemptions for low-income individuals in states that do not take up the Medicaid expansion. In addition, Sebelius announced that the administration will be holding regional informational meetings to work with states and stakeholders on ACA implementation. CMS Acting Administrator Marilyn Tavenner responded to the RGA letter, noting that states do not have a deadline to notify CMS of their plans regarding the Medicaid expansion and that states could still receive funding for Medicaid information technology costs whether they expand or not. However, most of the questions from the RGA were left unanswered.

HHS has also received letters from governors in California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington state. These letters reaffirmed commitments to establishing state-based health insurance exchanges.

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