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Update on Implementation of the Affordable Care Act Category: Healthcare Administration by - February 26, 2013 | Views: 27262 | Likes: 1 | Comment: 1  

The Affordable Care Act

Progress Report: Implementation of the Affordable Care Act at the State Level

In June 2012, the Supreme Court released its long-awaited ruling on the Affordable Care Act (ACA). The Court had to determine the constitutionality of the individual mandate and Medicaid expansion, considered to be two of the Affordable Care Act’s major coverage provisions. The Court upheld the constitutionality of the individual mandate, thereby declaring that the mandate fell within Congress’ power to lay and collect taxes. Therefore, all US citizens and legal residents are required to obtain health insurance by 2014 or face tax penalties. The second provision the Supreme Court ruled on was the constitutionality of Medicaid expansion, which as written in the Affordable Care Act, required all states to expand their Medicaid eligibility to include individuals — parents and adults without dependent children — between the ages of 19 to 65 with incomes up to 133 percent of the federal poverty level. While Medicaid is jointly funded by state and federal governments, states manage and administer the program, and coverage traditionally extends to people with low incomes, particularly children, non-elderly parents, pregnant women, individuals with disabilities, and seniors dually eligible for Medicaid and Medicare. The Supreme Court ruled that the Medicaid expansion provision is unconstitutionally coercive because states did not have adequate notice to voluntarily consent, and as such, the decision to expand Medicaid is at the discretion of the state.

Insurance Exchanges

To ensure individuals are able to purchase insurance, the Affordable Care Act calls for the creation of Affordable Insurance Exchanges, which will serve as state-based, competitive health insurance marketplaces where individuals and small businesses can shop around for coverage. States have the option of building and operating their own exchange, also known as a state-based exchange, partnering with the federal government to operate the exchange, or defaulting to a federally facilitated exchange. State opting to run their own exchanges will be in charge of executing all exchange activities include contracting with IT vendors to build the exchange infrastructure, determining eligibility and enrollment, interfacing exchange enrollment systems with the federal data hub, engaging in plan management, and contracting and providing consumer outreach and enrollment assistance. State choosing a federal-state partnership exchange will likely be in charge of plan management and consumer assistance, with the federal government operating all other exchange functions. States that opt for a federally facilitated exchange will allow the federal government to run and operate their exchange.

According to Kaiser Health News, as of February 15, 2013, here is a breakdown of where states stand with respect to their decision to purse a state-based, partnership or federally facilitated exchange:

State-based: CA, CO, HI, ID, KY, MD, MA, MN, NV, NM, NY, OR, RI, UT, VT, WA and the District of Columbia

Partnership: AR, DE, IL, IA, MI, NH, SD and WV

Federally-facilitated: AL, AK, FL, GA, IN, KS, LA, ME, MS, MO, MT, NE, NJ, NC, NK, OH, OK, PA, SC, TN, TX, VA, WI and WY.


With no federal deadline in sight, states can voluntarily opt in or opt out of Medicaid expansion at any time. States can also reverse their decision at any point. For example, if a state chooses to expand Medicaid but decides down the road, due to a number of reasons including budgetary shortfalls, to roll back on Medicaid expansion, then that state is allowed to revert back to its original eligibility rules pending approval from the federal government. To finance Medicaid expansion, the federal government will cover 100 percent of the expansion costs between 2014 and 2016, which then tapers to 90 percent in 2020 and thereafter. According to the Advisory Board Company, 25 states have opted in, 14 have opted out, and others remain undecided. To view a map of the states, visit here.


States face a variety of critical decision points related to ACA implementation. Each state will need to weigh the pros and cons and likely effects of each decision point. As we march closer to January 1, 2014, which is when the majority of the Affordable Care Act provisions take effect, states will continue to play a crucial role.

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