Obama administration finalizes key Affordable Care Act rule

The healthcare law authorizes states to expand Medicaid to adults under 65 with incomes up to 135 percent of the federal poverty level — roughly $15,000 for a single adult in 2012.

Under the new regulations, the federal government will shoulder all of the costs related to the new Medicaid enrollees for the next three years. After that, the federal contribution would be gradually phased down to 90 percent in 2020, and would remain there permanently.

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The rule, unveiled by the Department of Health and Human Services (HHS), will take effect in January of next year.

“This is a great deal for states and great news for Americans,” HHS Secretary Kathleen Sebelius said. “Thanks to the Affordable Care Act, more Americans will have access to health coverage and the federal government will cover a vast majority of the cost.”

The rule’s release follows remarks made by Sebelius earlier this week, in which she acknowledged that the ACA could cause healthcare costs to increase for some Americans. It was the first time a top administration official publicly made such a statement.

But on Friday, Sebelius emphasized the costs incurred by not extending health insurance to a greater segment of the population.

“Treating people who don’t have insurance coverage raises health care costs for hospitals, people with insurance, and state budgets,” she said.

The rule will be considered final when it is published Monday in the Federal Register. However, the administration will take comments from interested parties and the public for 60 days, and could later modify the language of the regulations.