Medicaid Ruling Creates Major Budgeting Problem
The U.S. Supreme Court's two-step—affirming the constitutionality of the Patient Protection and Affordable Care Act while striking down expanded Medicaid coverage—puts CFOs in a budget planning pickle.
They won't know who their payers are until online insurance exchanges are established, how many people will be on plans, or how their charity care and bad debt will be influenced. Some healthcare leaders say the Supreme Court decision will change little in their strategic plans, but it's hard to create a long-term strategic plan when you can't project revenue with any kind of accuracy even two years out.
Currently, 60 million people are enrolled in Medicaid, and the expansion would have added another 17 million to the rolls. Prior to the ruling last Thursday, the PPACA called for the uninsured to be covered by requiring states to expand Medicaid to those earning less than 133% of the federal poverty level. It was an increase the federal government planned to cover fully from 2014 to 2016 (though later coverage would fall to just 90% of the cost of expansion and states would need to make up the difference).
The law would have allowed the government to withhold all Medicaid money to states that didn't go along with its coverage expansion. In addition, the PPACA called for the creation of new subsidies to help people at slightly higher income levels afford private insurance on new insurance exchanges.