As Kim has already reported, public health advocates are delighted that the Supreme Court has upheld the Affordable Care Act. The law takes important steps toward improving the way we pay for care and invest in prevention, but its most important achievement is in reforming the bizarre US health-insurance system, whose reliance on voluntary employer-sponsored coverage has resulted in millions of people lacking health insurance. By deciding that the law’s Medicaid expansion is optional for states, though, the Court is leaving the fate of 16 million low-income people up in the air.

The ACA requires states to expand Medicaid eligibility to nearly all non-disabled adults (undocumented immigrants are excluded) with household incomes at or below 133% of the federal poverty level starting in 2014. (In 2012, the FPL is $11,170 for a single person and $23,050 for a family of four.) Initially, the federal government will cover 100% of the cost of states’ expansions, but states’ share of the expansion costs will gradually increase to 10%.

Had the Medicaid provision withstood the legal challenge, states would have been required to enact the expansion as a condition of continuing their Medicaid participation. They would have had the choice – as they have since the program’s inception – to drop out at any time, but if they did so they’d lose billions in federal funds. Twenty-six states argued successfully before the Court that this amounted to coercion, essentially saying that this supposed choice wasn’t really a choice.

The Medicaid expansion was expected to bring coverage to 16 million people – roughly half of those anticipated to gain insurance under the ACA. For those earning between 133% and 400% of the FPL, subsidies will be available to purchase policies through new state-run health insurance exchanges. The law doesn’t offer subsidies for those under the poverty level, because they’re assumed to be eligible for Medicaid. If some states decide not to go along with the now-optional Medicaid expansion, their poorest residents who don’t already qualify for Medicaid will have neither Medicaid coverage nor subsidies to help them get private coverage.

Phil Galewitz and Marilyn Werber Serafini of Kaiser Health News consider whether states are likely to forego the Medicaid expansion:

The Supreme Court has given states a way out of expanding their Medicaid programs under the health law, and top Republican officials in several states were quick to say they want to take that step.

But governors will be under strong pressure to take the federal money that would pay for coverage for millions of low-income people.

… While the ruling gives the 26 states that opposed the health law in court a way to avoid implementing a central provision, advocates for the poor and the health industry are likely to lobby hard for the expansion.  About 9 million people expected to gain coverage through Medicaid under the health law are in those 26 states, according to data compiled by the nonprofit Urban Institute.

Hospitals forced to care for patients without insurance are counting on Medicaid and the law’s provision for subsidies for moderate-income families. Insurance companies are banking on the growing business of managed care for Medicaid recipients under state contracts.

Donna Shalala, former Health and Human Services secretary under President Bill Clinton and now president of the University of Miami, said health care providers are “not going to let the governors leave the money on the table.”

“Strong pressure” isn’t the same as the force of law, and I can’t help but worry about how the most impoverished uninsured population will fare come 2014.

One of the admirable things about the Affordable Care Act is that its greatest benefits go to those who are most disadvantaged under the current system. Those of us fortunate enough to have good, affordable health insurance from our employers are unlikely to notice much change between 2010 and 2014, while those who’d previously been unable to afford insurance would have a much better shot at getting coverage. The Supreme Court’s decision clouds what should have been a clear distribution of the most beneficial impacts to the most needy, once again leaving the most impoverished uninsured people with uncertain health-insurance prospects. We can urge the states that haven’t already done so to adopt the Medicaid expansion, but we’ll be fighting to accomplish something the ACA was supposed to have achieved already.