One of the ways the Affordable Care Act (ACA) attempts to increase the number of health insured Americans is by expanding Medicaid. Along with health insurance exchanges, the expanded medicaid will allow tens of millions of people to have health insurance that wouldn’t be able to have it otherwise.
Originally, Medicaid expansion was mandatory and included with the ACA. However, when the United States Supreme Court made its ruling on the legality of the act, it made expanding Medicaid an optional part that each state could individually decide to adopt or reject. If they reject the expansion, the state will NOT be penalized and it will still get the same amount of subsidies from the federal government.
Just like each state has to decide about starting their own health insurance exchange, they also have to decide whether they will be willing to pay the additional money necessary for more Medicaid expenses. While the Federal government will foot the bill in the first three years, from then on the states will take on more of the added burden of an expanded Medicaid system. Because of that, many states have already opted NOT to go along with the new Medicaid program. You can view the chart below to see where your state stands.
To learn more about Medicaid and how it relates to the ACA please take a look at this: http://www.ncsl.org/documents/health/HRMedicaid.pdf
More information here: http://www.aafp.org/online/etc/medialib/aafp_org/documents/policy/state/statehealthpolicy/expansion100212.Par.0001.File.dat/TheAffordableCareActMedicaidExpansionandHealthcareExchanges.pdf