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Medicaid expansion to miss much of target market

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WASHINGTON (AP) — Nearly 2 in 3 uninsured low-income people who would qualify for subsidized coverage under the Patient Protection and Affordable Care Act (PPACA) may be out of luck next year because their states have not expanded Medicaid.

An Associated Press analysis of figures from the Urban Institute finds a big coverage gap developing, with 9.7 million out of 15 million potentially eligible adults living in states that are refusing PPACA Medicaid expansion money or are still undecided.

A year ago, the Supreme Court blocked the Obama administration from cutting existing Medicaid funding streams for states that opted out of the new PPACA Medicaid expansion program.

Meanwhile, many Republican state lawmakers are continuing to resist any state efforts to cooperate with any type of PPACA implementation, including PPACA Medicaid expansion implementation.

Expanding Medicaid is essential to the Obama administration’s two-part strategy for covering the uninsured.

Starting next year, middle-class people without job-based coverage will be able to get tax credits to help them buy private insurance. But PPACA calls for low-income people to enroll in Medicaid, expanded to accommodate a largely excluded group: adults with no children at home.

Expanded Medicaid would cover about half the 25 million to 30 million people who could be helped by the law.

Twenty-three states and the District of Columbia have decided to accept the expansion, which is fully financed by Washington for the first three years and phases down gradually to a 90 percent federal share.

Among those are six states led by Republican governors. But the majority of low-income Americans newly eligible for Medicaid under the law live in states such as Texas, Florida and Georgia, where political opposition remains formidable.

“Because of the Supreme Court’s decision making Medicaid expansion optional with the states, we’re going to see some pretty significant differences in this country from one place to another in terms of access to health care and access to health insurance,” said Gary Cohen, the Health and Human Services official overseeing the rollout of the law.

Republican state lawmakers continue to oppose the expansion for several reasons. Many believe Medicaid has too many problems already. Others worry that Washington will renege on financing, and some believe health care is an individual responsibility, not a government obligation.

“It’s an ideological principle piece to us on the conservative side,” David Gowan, Arizona’s Republican House majority leader said recently. “We don’t believe in the expansion of Medicaid itself. … We don’t believe it’s the government’s duty to do that.” Gov. Jan Brewer, also a Republican, succeeded in getting the Arizona Medicaid expansion through the Legislature but now faces the possibility of a referendum to block the law.

Health policy expert Gail Wilensky says she did not expect so many states to turn down the Medicaid expansion. While critical of some main features of the Affordable Care Act, Wilensky believes it’s important for the country to get uninsured people covered.

“For me, it is really is quite surprising — particularly in the years with 100 percent federal funding — that so many states are saying ‘no,’” Wilensky said. “This is depriving the poorest of their citizens of an important benefit.”

Wilensky ran Medicare and Medicaid during the George H.W. Bush administration.

The AP’s continuing check of the states finds 18 not expanding and nine where the outcome is still undecided. The biggest states where the expansion is stymied are Texas, with 1.7 million potentially eligible residents; Florida, with 1.3 million, and Georgia, with more than 680,000.

Still trying to find a path forward are Michigan and Ohio, whose Republican governors support the expansion but face legislative opposition. Each has more than one-half million potentially eligible residents, according to the Urban Institute, a public policy research center.

Health and Human Services Secretary Kathleen Sebelius says she hopes that holdouts will have a change of heart.

“The door is open,” said Sebelius. “If a legislature decides to reconvene at the beginning of January, and change their law, then we would welcome them in.”

There is no deadline for states to decide. Next year states will have an opportunity in each calendar quarter, and if they later want to drop out they can do that.

Low-income residents of states refusing the expansion will be exempted from tax penalties for being uninsured. Those penalties also take effect next year, when virtually everyone in the country will be required to have health insurance.

Medicaid already covers more than 60 million people, including many elderly nursing home residents, severely disabled people of any age and many low-income children and their mothers.

An earlier Urban Institute analysis of the expansion found that less than $100 billion in state spending could trigger nearly $1 trillion in federal dollars over a decade.

As originally designed, the expansion was supposed to cover households making up to 138 percent of the federal poverty level, about $15,860 for an individual or $32,500 for a family of four.

Under the law, Medicaid is the only coverage option for people below the poverty line, $11,490 for an individual, or $23,550 for a family of four. The poor cannot get subsidized private coverage in the new health insurance markets coming on line next year.

“This decision will have very real human costs for the adults who are going to remain uninsured and their families,” said Genevieve Kenney, co-director of the Urban Institute’s health policy center. “It seriously undermines the ability of the Affordable Care Act to substantially reduce the number of uninsured in this country, at least at the beginning.”

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