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As originally enacted, the Affordable Care Act (ACA) required each state to expand Medicaid eligibility to 138 % of the Federal Poverty Level.  However, the 2012 U.S. Supreme Court’s decision National Federation of Independent Business v. Sebelius, changed that.  The National Federation decision gives states the option to accept federal funds, reject the funds altogether and not expand Medicaid, or create an alternative state-specific proposal for expansion. The alternative plans utilize demonstration waivers to expand Medicaid, and must be approved by the Centers for Medicare & Medicaid Services (CMS) to be implemented.

To date, 28 states and the District of Columbia have accepted federal funds under ACA to expand Medicaid in their states. The health care law provides full federal funds for initial Medicaid expansion in each state, and then lowers the federal contribution to 90% by 2020. Under ACA, the federal funds continue at this 90% rate.

There have been updates regarding Medicaid expansion plans in several states.


CMS approved Indiana’s alternative Medicaid expansion program in January 2015. The Healthy Indiana Plan (HIP) 2.0 will cover up to 350,000 individuals, including individuals ages 19 to 64 with annual incomes under 138 percent of the federal poverty level beginning February 1, 2015.  Under HIP 2.0, beneficiaries will receive services through HIP Basic or HIP Plus, based on the individual’s income and contributions to health savings accounts.

CMS approved the alternative Medicaid expansion plan, which includes premiums and copays for beneficiaries. The plan allows the state to lock certain newly eligible beneficiaries out of the program for 6 months after they are disenrolled for non-payment of premiums. 

However, CMS did not accept other aspects of Indiana’s proposal, including the requirement that beneficiaries work to receive benefits. 

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After almost two years of debate and negotiation, Republican Governor Bill Haslam’s alternative plan for Medicaid Expansion in the state, “Insure Tennessee” was defeated in the Republican-led state legislature on February 4, 2015.  Haslam had called in a special session to consider the expansion proposal. The plan would have provided coverage to an additional 280,000 low income Tennesseans. 

One aspect of the plan was to provide vouchers to individuals earning up to 138% of the federal poverty level to be used toward employer coverage. According to an article in the Washington Post, it is unlikely that the Medicaid expansion proposal will return during the regular session of the legislature.

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The overwhelmingly Republican state Senate in Wyoming voted against a bill that would have supported the state's expansion of the Medicaid program on February 6, 2015, with the state’s House of Representatives also pulling a companion bill the same day.

Republican Gov. Matt Mead supported expansion and said that the plan would have provided health coverage under Medicaid for more than 17,000 low-income adults in the state.

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Alaska Gov. Bill Walker announced in early February 2015 that a new study demonstrates that Medicaid expansion would save the state money, and he hopes to implement expansion by July 2015. An article in the Alaska Dispatch News cites concerns that the Republican-led Alaska Legislature may not support Medicaid expansion in the state, unless there are reduced costs in the program.

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According to a New York Times article, Democratic Governor of Pennsylvania Tom Wolf is planning to pursue Medicaid expansion in the state under ACA. His plan would be a traditional expansion of Medicaid that would increase the number of poor adults eligible for Medicaid, without the additional premiums and limitations that his Republican predecessor had planned through an alternative expansion proposal.

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Overview of Medicaid Expansion by State

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