Despite Veto, Medicaid Expansion is Still a Go

The governor’s Friday veto of legislation authorizing the expansion of Medicaid under the Affordable Care Act has created a lot of confusion. While the veto has led some to believe the governor has broken his promise to expand Medicaid, that’s not the case at all. The veto was unfortunate, but the expansion will proceed as planned.

That is good news for the 300,000 newly eligible uninsured adults who will be eligible for compressive health coverage, most of whom are struggling in low-wage jobs and can’t afford health coverage. It’s also great news for New Jersey taxpayers. As the governor pointed out in his budget address, the state will save $227 million next year by expanding Medicaid. That will almost double the next year and continue to increase in subsequent years.

The Medicaid expansion should proceed despite the veto because there is language in the approved budget authorizing and funding it (although the legislature is reviewing this matter). The governor may have chosen to use budget language, rather than legislation, to authorize the expansion to keep the flexibility to end the expansion in the unlikely event that the federal share of the cost is reduced (the feds are paying for all costs for the first three years before gradually decreasing to 90 percent). This is, in fact, what he promised to do in his budget address – end the expansion if the federal government didn’t live up to its financial commitment.

While using budget language to expand Medicaid gives the governor more flexibility, it comes with one key drawback: It is only in effect for the one year covered by the budget. In other words, without legislation, the language expanding Medicaid must be included in subsequent budgets for the expansion to continue.

Unfortunately, the confusion over the veto only adds to the existing confusion about the Affordable Care Act and that could result in fewer people applying for coverage when applications start being accepted on October 1. It is critically important that all stakeholders – the state and federal government, health advocates and community groups – clear this matter up and increase their efforts to reach out to the uninsured to ensure they will benefit from Medicaid expansion’s enormous potential.

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