Residents of states opting out of Medicaid expansion won't be penalized

Low-income residents in states that decide to opt out of a big Medicaid expansion in the new health care law, including Texas, will not risk federal penalties in return.

Health and Human Services secretary Kathleen Sebelius made the statement in a letter to governors Tuesday. Along with upholding President Barack Obama's health care law last week, the Supreme Court also gave states the option to say "no" to Medicaid expansion.

Texas Governor Rick Perry announced Monday the state will opt out of the expansion, even though it would cover two million more low-income Texans.

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