By Melissa Attias, CQ Roll Call
April 25, 2013 -- Health and Human Services Secretary Kathleen Sebelius recently reiterated that states can enter and exit the Medicaid expansion included in the health care law without losing their other Medicaid funds, responding to concerns from an Arkansas lawmaker.
Republican Rep. Steve Womack noted that his home state signed "something rather innovative" into law this week that would allow Arkansas to expand Medicaid by providing coverage through an insurance exchange set up under the health care overhaul.
Although the Obama administration still has to sign off on the plan, it is being closely watched by other states with concerns about expanding the Medicaid program. Sebelius said her department is eager to receive a specific proposal for the Arkansas waiver now that the legislation has passed.
But Womack expressed concern at a House Labor-HHS-Education Appropriations Subcommittee hearing about what would happen if his state later has to employ the "circuit breaker," as he referred to it, and stop the program.
"Provided you approve the proposal, our state is depending on you to be ... a stable funding partner," he said. "I also recognize that the Arkansas legislation that was signed has an off ramp, a circuit breaker in the event that promises made today perhaps aren't kept."
Sebelius said that the Supreme Court ruling essentially divided Medicaid into the traditional program and the expansion under the health care law (PL 111-148, PL 111-152), which provides an enhanced federal match if states extend their programs to individuals under age 65 with annual incomes up to 138 percent of the poverty line. The federal government would cover 100 percent of the costs of those newly eligible from 2014 to 2016, with its share gradually decreasing to 90 percent in 2020 and thereafter.
Sebelius noted that her department has said in guidance to states that they can come in and leave the new program when they want, and said that Arkansas basically codified that concept in its legislation.
"The guidance from HHS has been pretty clear from the outset," Sebelius said. "If this is a financial detriment, you come out of the new program if you will and there is no impact on the traditional Medicaid."
Still, she acknowledged that concern exists that the federal government will not live up to its end of the funding requirement.
"There is a lot of fear voiced with governors, not just [Arkansas] Governor [Mike] Beebe but I talk to governors virtually every day and they say, well, what if Congress changes the deal? What if, you know, we look at this funding and it switches next year or the following year?" she said. "Which is why I think it was important that the president and Gene Sperling, his head of the Council of Economic Advisers, made very clear that this president, at least, is committed to the funding formula."
Womack also asked whether Sebelius is concerned that the "circuit breaker" may be triggered in a few years. "I'm hopeful that that won't be the case," she said. "I think that, again, there is some incredibly impressive work going on with governors and with the flexibility that we have given governors around the Medicaid program."