Obama admin: Delayed Medicaid expansion will cost states

The Obama administration is telling states to expand Medicaid or risk losing federal funds if they delay, The New York Times reported.

In letters to state leaders, federal health officials noted that although there's no deadline for states to decide to expand their Medicaid programs, postponing coverage expansion would cost them.

That's because federal payment rates "are tied by law to the specific calendar years noted," said Center for Medicaid and CHIP Services Director Cindy Mann, according to the NYT.

That means if a state waits until 2016 to expand Medicaid, that state will get 100 percent federal for only one year. After 2016, federal funds fall to the levels set by Congress, so states must cover the remaining costs, according to the article.

Yet Mann also said that because it's a voluntary program, states can opt in and then out of Medicaid expansion.

With seemingly inconsistent directives, it's no surprise states have been asking the U.S. Department of Health & Human Services to clarify the reform law's Medicaid expansion provision, citing budget uncertainties and the need for better federal guidance.

The upcoming presidential election could determine whether states choose to opt into Medicaid expansion. If President Barack Obama wins a second term, most states will expand their Medicaid programs under the health law, according to a new report from consulting firm Leavitt Partners, based in Salt Lake City, Utah.

Despite federal calls to avoid deferment, the Leavitt Partners report recommends state officials at least wait until after the election to decide whether to expand their Medicaid programs, as that's when the administration will likely release more detailed guidance, FierceHealthPayer previously reported.

For more:
- read the NYT article
- here's the Leavitt Partners report (.pdf)