States cannot do partial Medicaid expansion, says Obama administration

States must take or leave the entire Medicaid expansion under President Obama’s healthcare law, and cannot expand the program only partially, the Obama administration said Monday.

The Health and Human Services Department (HHS) said the law does not allow for a partial expansion — at least not with the level of federal funding available to states that participate in the expansion.

{mosads}The Affordable Care Act expands Medicaid to cover people at or below 133 percent of the federal poverty line. The federal government initially pays the entire cost of the expansion, with the federal share dropping to 90 percent by 2020.

Some states had asked whether they could expand Medicaid only partially — not all the way to 133 percent of poverty — and still get the full federal payment. HHS said Monday that it simply doesn’t have that authority.

“The law does not provide for a phased-in or partial expansion,” HHS said. “As such, we will not consider partial expansions for populations eligible for the 100 percent matching rate in 2014 through 2016.”

The Republican governors who have been skeptical of the expansion weren’t happy with Monday’s guidance.

“The answer is disappointing for many governors who hoped the Administration was more serious about providing states flexibility,” said Mike Schrimpf, communications director for the Republican Governors Association.

States will have more options as the federal payments begin to fall in 2017, and HHS said it will consider requests for partial waivers at that time, using its ability to issue waivers enabling state alternatives to the ACA.

States can drop out of the Medicaid expansion if they choose to participate at the outset, and they can opt in at any time — there’s no deadline for states to make a decision, unlike the related decision about whether to operate a state-based insurance exchange. But states that opt in quickly will be able to take advantage of greater federal funding.

— This post was updated at 4:26 p.m.