Obama's Budget Will Seek To Encourage More Medicaid Expansions

January 14, 2016

California Healthline

President Obama's fiscal year 2017 budget proposal will call on Congress to extend the amount of time the federal government will fully cover the costs of Medicaid expansion, Modern Healthcare reports (Dickson, Modern Healthcare, 1/14).

Obama is scheduled to release his FY 2017 budget proposal on Feb. 9 (Galewitz, Kaiser Health News, 1/14).


Currently, the federal government funds 100% of Medicaid expansion costs through 2016. In 2017, the federal government's share of the costs will begin to drop gradually, reaching 90% by 2020. According to Modern Healthcare, some states have cited their eventual responsibility for 10% of the costs as a reason not to expand (Modern Healthcare, 1/14).

So far, 31 states and Washington, D.C., have expanded Medicaid under the ACA (Kaiser Health News, 1/14). Further, the governors of South Dakota, Virginia and Wyoming have included Medicaid expansion in their FY 2017 budget proposals (Modern Healthcare, 1/14).

Obama Calls for Federal Funding Extension

Obama's proposal will call on Congress to extend the federal government's 100% funding share of Medicaid expansion costs for the first three years of a state's expansion, regardless of when the expansion begins (Modern Healthcare, 1/14).

According to The Hill, the proposal is part of the Obama administration's push to encourage more states to expand their Medicaid programs (Sullivan, The Hill, 1/14).


Office of Management and Budget Director Shaun Donovan and White House Domestic Policy Council Director Cecilia Muñoz in a blog post published Thursday cited the proposal as evidence of the administration's flexibility on expansion (Kaiser Health News, 1/14).

Joan Alker, executive director of Georgetown University's Center for Children and Families, said the proposal shows the administration remains serious about advocating for the ACA's complete implementation.

Meanwhile, some experts noted that the proposal could face opposition among conservatives in Congress.

Alker said although the proposal "is a sound idea" that "might entice some states" to expand, "it seems unlikely that Congress will pass this in 2016."

Sara Rosenbaum, a professor of health law and policy at George Washington University, said she thinks Republicans in Congress likely "will reject a proposal to incent what they would wipe off the books" (Kaiser Health News, 1/14). Earlier this month, Congress passed a budget reconciliation measure (HR 3762) that would have phased out the ACA's Medicaid expansion after a two-year transition period, but Obama vetoed the bill (California Healthline, 1/11).

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