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Monday, December 3, 2012

Without Medicaid expansion, gov.-subsidized health insurance will be 'upside down'

Posted By on Mon, Dec 3, 2012 at 9:30 AM

Dr. Joe Thompson
  • Dr. Joe Thompson

Dr. Joe Thompson
  • Dr. Joe Thompson

As we noted on Friday, no matter how much Sen. Jason Rapert, Rep. Nate Bell, and other Republican lawmakers don’t like the health-insurance exchange, it’s coming to Arkansas. Yes, the legislature needs to decide whether it will be run by Arkansas or by the Feds (or a combo of the two), but either way, come 2014, there will be an exchange.

What Republican lawmakers can stop is Medicaid expansion. So what happens if the state rejects Medicaid expansion while the other elements of the Affordable Care Act go forward?

We end up with what Arkansas Surgeon General Joe Thompson called “one of the most upside down things that we could do.”

This week’s podcast touches on this but here’s the gist: The ACA gives subsidies, in the form of tax credits, to folks that are making between 100 percent and 400 percent of the federal poverty level (FPL). There are no such subsidies for folks below 100 percent, because they were supposed to be covered by Medicaid expansion. The Supreme Court threw a curveball by leaving the choice to expand Medicaid up to the states. If states reject Medicaid expansion, someone making between (around) $11,000 and $44,000 will be getting financial help from the government to purchase health insurance. An uncovered individual making less than $11,000 will be out of luck.

And if you’re thinking that Arkansas already covers the very poor, the ugly truth is that the state has among the stingiest Medicaid programs in the nation (second only to Alabama). For folks between the ages of 19 and 64: 1) If you’re a parent of a Medicaid-eligible child, you can only get Medicaid if you make less than 13 percent of the FPL if not working, 17 percent of the FPL if working. 2) If you’re a non-disabled adult without dependent children, you are not eligible for Medicaid at all. (For pregnant women, the income max is 200 percent of FPL; for people disabled for at least 12 continuous months, it’s 75 percent.)

So if the state rejects Medicaid expansion, non-pregnant adults who are barely scraping by will be left out in the cold while the government subsidizes, say, a freelancer making $40,000 a year.

“It does not make any sense for our poorest citizens to be getting less support than our more affluent citizens,” Thompson said. “We can’t ethically allow that.”

See the 2012 federal poverty guidelines after the jump. These figures will change a little bit by 2014. But play with the math a little and you’ll see how sticky things get. A family of four with an income of $90,000 would be eligible for subsidies to buy insurance on the exchange; a family of four with an income of $20,000 (or down to $4,000), not so much. The other thing to note is just how tough Arkansas's current income limits are...no wonder one in four Arkansans between the ages of 19 and 64 have no coverage at all.

Persons in family/household Poverty Guideline
1 $11,170
2 $15,130
3 $19,090
4 $23,050
5 $27,010
6 $30,970
7 $34,930
8 $38,890

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