Coverage Gap For Lowest Income In Opt-out States

By  //  September 7, 2013


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IF MEDICAID NOT EXPANDED, OBAMACARE NO HELP TO MOST NEEDY

In National Federation of Independent Business v. Sebelius, decided on June 28, 2012, the U.S. Supreme Court determined that States could not be forced to participate in the Medicaid expansion (ME) as prescribed in the Patient Protection and Affordable Care Act (PPACA, aka Obamacare), effectively allowing states to opt out of this provision.

A recently released Commonwealth Fund study focuses on the impact of that ruling and the unexpected coverage gap it creates for the lowest-income group in those states that opted out.

 SCOTUS PPACA RULING ON MEDICAID EXPANSION CREATES CRITICAL COVERAGE GAP

Sara Collins

Sara Collins

“A primary goal of the Affordable Care Act is to provide health insurance coverage to the millions of uninsured people in the U.S., the majority of whom have low and moderate incomes and struggle to afford the health insurance and healthcare they need,” Commonwealth Fund Vice President and study co-author Sara Collins said in a prepared statement. “However, if states don’t expand their Medicaid programs, adults with the lowest incomes will continue to live without the health and financial security provided by the Affordable Care Act.”

Adults earning below the federal poverty level in Florida, one of the 26 states that have either rejected ME or have yet to commit to it, will not have access to either the Medicaid expansion or subsidized private insurance through the new state insurance marketplaces that would help to make private health insurance affordable, and are likely to remain uninsured.

Also, according to an Urban Institute report, the Medicaid expansion gap “leaves out almost 7 million adults ages 19 to 64 who would have qualified for Medicaid in the states that have not voted to expand it.”

LOWEST-INCOME FLORIDIANS NOT ELIGIBLE FOR PREMIUM SUBSIDIES

The Commonwealth report, In States’ Hands: How the Decision to Expand Medicaid Will Affect the Most Financially Vulnerable Americanspoints out that people earning less than 133 percent of the federal poverty level in 2014 will qualify for Medicaid, while people making between 100 percent to 133 percent of the federal poverty level are eligible to purchase subsidized insurance coverage through the state marketplaces if they are not eligible for Medicaid.

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In states that opt out of ME, not only will their lowest-income citizens be unable to enroll in expanded Medicaid, but also they won’t be able to purchase subsidized health insurance through the marketplaces.

However, people making less than 100 percent of the poverty level (less than $11,170 for an individual and $23,050 for a family of four in 2012) in the 26 states, which have not committed to ME are not eligible for marketplace subsidies because it was assumed, prior to last year’s Supreme Court ruling, that they would be enrolled in Medicaid. As a result, not only will over 900 thousand of the lowest-income Floridians be unable to enroll in expanded Medicaid, but they also won’t be able to purchase subsidized health insurance through the marketplaces.

FEDERAL LEGISLATION TO EXPAND SUBSIDIES UNLIKELY

As major PPACA implementation milestones rapidly approach, the multiple ways the law will impact all aspects of our lives are becoming clear.

As major PPACA implementation milestones rapidly approach, the multiple ways the law will impact all aspects of our lives are becoming clear.

Collins and her colleagues at the Commonwealth Fund strongly encourage states to move forward with ME, and if they do not, at least in the near term, support passing legislation that would allow those making less than 100% of the federal poverty level, who are not eligible for Medicaid, to be eligible for subsidized coverage through the state marketplaces.

With the existing political dynamics surrounding the PPACA, in which the Republican-controlled U.S. House has voted 40 times to repeal Obamacare and is now in the throws of a “defunding” campaign, any legislation to expand subsidies would be very unlikely to see the light of day.

Fortunately, under the final rules issued by the Department of Health and Human Services last month, these low-income people who are under the federal poverty level and cannot afford insurance are exempt from penalties for not having insurance if they would have qualified for Medicaid coverage had their state chosen to expand the program.

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