Sebelius Urges States To Move Forward On Health Law, Warns Against Rolling Back Medicaid Eligibility

Health and Human Services Secretary Kathleen Sebelius urged states to participate in the expansion, but said the administration would waive penalties against poor residents for not carrying insurance in states that opt out. Experts, meanwhile, urge the administration to "be flexible" with states regarding the Medicaid expansion. And Wall Street continues to view Medicaid as a growth opportunity.

The Associated Press: Mandate Waiver For Some Low-Income People
The Obama administration says low-income residents in states that decide to opt out of a big Medicaid expansion in the new health care law will not risk federal penalties as an unintended consequence. … In a letter to governors Tuesday, Health and Human Services Secretary Kathleen Sebelius said low-income residents in those states who would have been eligible for the coverage will not face the individual insurance mandate (7/10).

Kaiser Health News: Administration Warns States Not To Roll Back Medicaid Eligibility
While the Supreme Court upheld most provisions of the health law in its landmark ruling last month, the justices ruled that the federal government could not penalize states that choose not to expand Medicaid by cutting off all funding for existing Medicaid programs. In a letter to the nation’s governors, Health and Human Services Secretary Kathleen Sebelius warned that "the court's decision did not affect other provisions of the law" governing the joint federal-state health insurance program for the poor and disabled. A White House official said that means states are still barred from reducing eligibility for Medicaid (Galewitz, 7/11).

The Hill: Sebelius Urges States To Implement Health Care Law, Including Medicaid Expansion
Sebelius also announced a new round of meetings for state and federal officials to discuss implementation of President Obama's healthcare law. Some conservative governors had been avoiding implementation until they knew how the Supreme Court would rule. "Now that the Supreme Court has issued a decision, we want to work with you to achieve our ultimate shared goal of ensuring that every American has access to affordable, quality health care," Sebelius wrote in a letter to governors Tuesday (Baker, 7/11).

Politico: Experts On Medicaid: Go Slow
Three former administrators of the Centers for Medicare & Medicaid Services who served Republican presidents have a bit of advice for Democrats trying to get conservative governors to go ahead with Medicaid expansion: Be flexible. Don't make it a political litmus test. And try not to pour fuel on what's already a hot-burning fire. The unexpected Medicaid ruling by the Supreme Court left the states with unexpected options and dozens of questions — and the three former CMS chiefs doubt they will be answered quickly, maybe not until after the elections (Norman, 7/10).

Politico: Medicaid Expansion Could Pay Off For Investors
For all the Republican governors saying they'll block President Barack Obama's plan to expand Medicaid in their states — now at least five — the market seems to think they're bluffing. There are clear signs that Wall Street is anticipating a spike in Medicaid spending that would come from the expansion (Reis, 7/10).

Bloomberg: WellPoint Deal Shows Medicaid Prospects Trump Court View
WellPoint Inc. (WLP)'s $4.9 billion deal for Amerigroup Corp. is a bet that health insurers can profit from Medicaid coverage for the poor even after the U.S. Supreme Court put the program's future growth up in the air….WellPoint Chief Executive Officer Angela Braly's sees "unprecedented growth" for Medicaid plans, even as Republican governors vow to resist an expansion pushed by President Barack Obama that would add as many as 17 million new members. If Obama's plan isn't implemented fully, the industry still may gain tens of billions of dollars in business as cash-strapped states turn to insurers to manage their programs, company executives said (Nussbaum and Wayne, 7/10).