Sebelius: States still can't reduce Medicaid eligibility

Department of Health and Human Services Secretary Kathleen Sebelius

Although states can opt out of the Affordable Care Act's Medicaid expansion, they still may not tighten eligibility requirements, the nation's top health official warned this week.

In a letter to governors, Health and Human Services Secretary Kathleen Sebelius reminded state officials that while they can reject the ACA's Medicaid expansion, they may not roll back existing eligibility requirements for the program. State officials in some predominantly Republican-run states have argued that the Supreme Court ruling on Medicaid also invalidated the penalty on restricted eligibility requirements, Kaiser Health News reported.

Additionally, Sebelius said that low-income residents in states that opt out of the Medicaid expansion would not face federal penalties for not having health insurance. These individuals would get a “hardship” waiver from the law's individual mandate provision.

Click here to read the secretary's letter.