This is very important to constitutional law – the court decided that the mandate is a tax and is therefore permissible,. However, people in health care arena don’t really need to focus on it. No real practical implication for the implementation of health reform.

I am not a judge, but after reading the opinion it doesn’t seem that the language suggests that the Supreme Court had a problem with the MOE provisions. The MOE had nothing to do with expansion or the “change in kind” of the program that the Court referred to. The MOE was in the same section (but not the same sub-section) of the ACA as the expansion (Sec 2001), so some may think this indicates that MOE may not stand.

There is no way to know for sure, but the language of decision talks about a “shift in kind and not merely in degree” and makes a division between the pre-existing program and the expansion. Nothing in opinion gives me any reason to think that the court wanted to restrict HHS’ ability to enforce other changes that did not have to do with eligibility expansion. The HHS Secretary will continue to have authority to enforce changes in the statute and rules as they have for a long time – the only thing HHS cannot do is say that if a state doesn’t take up offer of new expansion then we will hold back money for the existing Medicaid program.

Absent a maintenance of effort requirement, states have always have the right to reduce Medicaid eligibility levels so long as they did not go below mandated minimums. Thus, it would appear that a state could take up the adult expansion to 133% FPL in 2014 and then eliminate the expansion in later years. It is less clear that a state may receive enhanced FMAP for a partial expansion and likewise it remains unclear whether a state could expand to 133% FPL and then reduce to 100% FPL and receive the enhanced match for adults below 100% FPL.

While we are still waiting on guidance from HHS about this issue, speakers on a recent call with state officials suggested that the foster care expansion is an incremental change to the existing Medicaid program and is likely to be mandatory for states.

The ACA requires the Secretary to take into account a number of factors in allocating the DSH reductions and to allot the largest reductions to states: with the lowest numbers of uninsured; that do not target DSH to hospitals with high- Medicaid volumes and high uncompensated care costs; and with low DSH expenditures. A non-expansion state (with a larger percentage of uninsured) may see a relatively lower DSH reduction. However, all states -- and all DSH hospitals -- can expect to see a reduction in their DSH allotment. Ultimately, the Secretary has the discretion to determine how much to weight each of the factors in ACA and how much greater the DSH cut will be in an expansion state than a non-expansion state.

Maryland currently has about 64,000 enrolled in PAC and most have behavioral health needs so these individuals pursue this coverage because it allows outpatient services that they need. When the state modeled the additional takeup under the Medicaid expansion it seemed that 80,000 individuals would be added – think they already had the sicker population enrolled. With DSH – MD is unique, has only all-payer hospital waiver – which means that Maryland’s DSH program doesn’t exists as it does in other states. MD doesn’t face cuts to DSH because of all-payer waiver.

Governor Walker is saying that waiting until November elections is the best thing to do for Wisconsin. Rulemaking under Chevron doesn’t allow HHS to have rules out by November and our legislature won’t be back in Wisconsin until early next year. The confluence of events at the federal level are going to be dramatic and with the money that’s involved there will be a big debate – proceeding now would be a mistake. With CMS, I am imploring them to listen more closely to what states are saying and I am more hopeful that now with this ruling they will adopt this position.