The main purpose of health reform, the president said at his press conference last Friday, was to provide health insurance to people at affordable rates. He meant the nub of Obamacare — the state shopping exchanges with their smorgasbord of insurance policies — would give coverage to millions of Americans who did not have insurance.
Whether that coverage will be affordable or comprehensive for families remains to be seen. What is crystal clear, however, is that there will be one group of Americans who won’t even make it to the insurance gateway. They live in the 27 states that have so far chosen not to expand their Medicaid programs to cover more of the uninsured. Many of those left out are childless adults — a group rarely covered by Medicaid even if they are among the poorest of the poor.
About 51 million people were uninsured at the time the president signed the Affordable Care Act (ACA). Congress expected that even after ACA went into effect, some 20 million would remain uninsured. Around 15 million would be eligible for Medicaid after state expansion and another 15 million could get subsidies to shop in the exchanges. Then, last year the Supreme Court messed up that scenario by ruling that states were not required to expand their Medicaid programs, and half of them, mostly in the west and south said “no” even though the federal government was footing most of the bill. According to a report from the Kaiser Commission on Medicaid and the Uninsured released a few weeks ago, many of those who won’t have a chance for coverage live in Florida, Texas and Georgia.
Here’s what happens to residents in states that have opted not to expand Medicaid coverage: People with incomes between 100 and 138 percent of the federal poverty level ($15,900 for a single person and $32,500 for a family this year) can get a tax subsidy to help them buy insurance on the exchanges. But because of the way Congress crafted the law, people with incomes below the poverty level are barred from receiving subsidies in the exchanges because they were supposed to be eligible for expanded Medicaid.
In a perversity of Obamacare, this means that some of those with the lowest incomes will get no government help buying insurance. Someone who has an income that’s 99 percent of the poverty level cannot get financial assistance to purchase health insurance from an exchange, but someone whose income is 101 percent above can.
This is the opposite of what happens in means-tested programs like food stamps or Supplemental Security Income (SSI) where people with incomes over the eligibility limit don’t qualify. When it comes to health insurance subsidies, people with incomes below the line don’t qualify.
What are their options? Basically none. Without subsidies, people in this predicament can hardly afford insurance. It’s tough even for families with much higher incomes to pay for it. That’s why Congress authorized the subsidies in the first place. These people will continue to be uninsured and can only hope that Congress changes the law or that their states have a change of heart next year when their legislatures reconvene.
Health insurance reform was never about equity, the kind that exists in the national health insurance systems of other countries where everyone is covered and entitled to the same benefits. Under Obamacare, some insurance coverage will be worse than others and will still leave families on the hook for medical bills and vulnerable when catastrophic illness strikes.
Denying Medicaid coverage and/or subsidies to the poorest of the poor makes these inequities all the more apparent. All too many states and Obama have some more explaining to do.