Medicaid is a federal/state partnership to provide health care to low-income individuals. The states create their own programs within federal guidelines, and the federal government provides the bulk of the money. A good chunk of the spending is for long-term care in nursing homes for seniors. Because Medicaid is the most cost-effective health care delivery system in the nation, the Affordable Care Act relies largely on expanding it to extend coverage inexpensively. The law starts out very generously picking up 90 percent of the expansion costs at the federal level, with that funding commitment being reduced over time. States not complying with the expansion would risk losing big chunks of funding.
That, the Court ruled, is a problem.
The Court’s decision on the constitutionality of the Medicaid expansion is divided and complicated. The bottom line is that: (1) Congress acted constitutionally in offering states funds to expand coverage to millions of new individuals; (2) So states can agree to expand coverage in exchange for those new funds; (3) If the state accepts the expansion funds, it must obey by the new rules and expand coverage; (4) but a state can refuse to participate in the expansion without losing all of its Medicaid funds; instead the state will have the option of continue the its current, unexpanded plan as is.That means that those 26 states who brought the suit against the federal government can choose not to expand Medicaid coverage to their citizens (though with the generous offer from the federal government, they'd be shooting themselves in the foot not to). It will mean fewer people with access to care, and potentially and ironically, more people subject to the individual mandate. How that will pan out is not yet clear, and what this new restriction on Congress's spending power vis-a-vis the states means constitutionally, I'll leave to the lawyers. But it might not bode well.