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Health care ruling could leave poorest Americans at greatest risk

Updated at 7:04 p.m. ET : Now that the Supreme Court has upheld President Barack Obama's health care initiative, will Congress have to rewrite it from scratch?

It's not a paradoxical question. The court signed off on nearly all of the Patient Protection and Affordable Care Act, but it struck down one provision, and in doing so — whether it knew it or not — it may have put the poorest Americans at the greatest risk of being left without any health insurance.

Chief Justice John Roberts said as part of the 5-4 decision that states can't be penalized for refusing to join the law's expansion of Medicaid eligibility. Health law experts said that had the practical effect of flipping an all but mandatory program into one a state can choose not to join.

Here's the problem: The ACA creates state health insurance "exchanges," providing tax credits to eligible residents to buy affordable, state-certified health insurance. But the poorest Americans aren't in that eligible pool, because the law assumes they'll be covered by the expansion of Medicaid, which is no longer a given. 

In states that reject the expansion, poor residents could be left without either form of coverage — as many as 15 million if all 50 states opt out, a circumstance that former Medicaid director Donald Berwick said was highly unlikely.

The White House didn't address the issue in a long Q&A it issued on the court's decision. The statement touted every provision of the act but one: Medicaid expansion.

Medicaid currently covers only some low-income people, primarily parents with children, pregnant women, people with severe disabilities and senior citizens. Adults without disabilities or children, in other words, aren't generally covered. That's the group the Medicaid expansion was supposed to help the most.

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If their states opt out, young working adults below the poverty line could be in a Catch-22, because "they may not get Medicaid, and they may not be eligible to purchase insurance through the exchange," said Christina S. Ho of the Rutgers University School of Law, who was a member of President Bill Clinton's Domestic Policy Council. 

It works this way:

The insurance tax credits are targeted at people with incomes between 100 percent and 400 percent of the poverty line as determined by the U.S. Census Bureau. Congress sought to compel the states to cover everyone under the line through Medicaid.

The federal government promised to fully cover all expenses for the expanded coverage before eventually pulling back to cover 90 percent after a few years. The states would have to pick up the extra 10 percent eventually.

States aren't required to take part, but if they don't, the law as enacted would have turned off the flow of all Medicaid funding from Washington. 

That enforcement mechanism is what the court invalidated Thursday, meaning there's no penalty for a state that says, "Thanks, but no thanks."

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Because states haven't had time to consider yet whether they will opt in or out. it's difficult to say how many people could be affected. 

But about half of the nearly 50 million uninsured Americans have incomes below the new eligibility thresholds, according to the latest report, in October, from the Kaiser Commission on Medicaid and the Uninsured. And about 6 in 10 of them are adults without dependent children — the primary beneficiaries of the program's expansion.

If you do the math, roughly 15 million Americans could be in the newly created gray area. In 2010, when the act was passed, the Commonwealth Fund, an independent health care policy foundation, similarly calculated that the Medicaid expansion would benefit 12 million of the 15 million uninsured Americans under the poverty line. 

Donald Berwick, former head of the Centers for Medicare and Medicaid Services, which administers the two programs, said few states were likely to take that risk.

"Those people are still living in your state, They're still poor. They're going to come to your emergency room. They're going to be operated on, and they're going to have diseases that get worse, and you're going to have to pay for that. That will come from the state — free care pools and charity in the state," Berwick said in an interview on MSNBC-TV. 

"I think what's going to happen is the states are going to be under pressure from providers of care who say: 'Why are you leaving this money on the table? Let's join in with the federal dollars.'"

But Judy Solomon, vice president for health policy at the nonpartisan Center on Budget and Policy Priorities, agreed with Ho that the decision means low-income adults could lose the promise of Medicaid coverage "even while people with somewhat higher incomes will be eligible for premium tax credits." 

Writing on the center's policy blog, Solomon said: "The poorest adults — primarily parents and other adults working for low wages — will be left out in the cold."

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