Health and Medical News and Resources

General interest items edited by Janice Flahiff

Two postings about proposed state Medicaid expansion (The Health Care Blog)

 

Yes, this is a controversial topic, but thought I’d include these items, the comments for both blogs are interesting.
My thoughts? Health insurance coverage does need revising..because caring for our nation’s health is a shared responsibility…

Why Should You Care Whether or Not Your State Decides to Expand Medicaid Coverage?

By expanding Medicaid, the state-federal partnership that offers health insurance to low-income Americans, the Affordable Care Act set out to cover some 17 million uninsured – or roughly half of the 34 million who are expected to gain coverage under reform. But when the Supreme Court ruled on the Affordable Care Act in June, it struck down a key provision which threatened that if a state refused to co-operate in extending Medicaid to more of its citizens, it could lose the federal funding it now receives for its current Medicaid enrollees…

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Health care costs, premiums would rise

What these governors ignore is the impact that the loss of those Medicaid dollars will have on insurance rates in their states, says Joe Paduda, editor of Managed Care Matters. Hospitals have been counting on the influx of new Medicaid dollars to reduce the cost of uncompensated care. Today, hospitals spend billions delivering care to patients who are both uninsured and very poor. If more patients have Medicaid, the pile of unpaid bills will shrink.

Assuming that Medicaid will expand, the Affordable Care Act has already trimmed subsidies to hospitals that care for a disproportionate share of impoverished patients. But now, if states turn down the Medicaid funding, the hospitals in these states “are going to have to make up the revenue loss from somewhere,” says Paduda, “and that ‘somewhere’ is going to be from privately-insured patients. That will lead to health insurance costs increasing much faster in ‘non-expansion’ states than in the rest of the country.”

We have been told that in some red states conservatives “hate poor people.” But my guess is that they’ll hate higher premiums more. If premiums go up, governors who turned down federal Medicaid dollars will have to answer to voters…

Now that some states are balking, the Congressional Budget Office estimates that 6 million of the 17 million who were supposed to be covered by the Medicare expansion will be left out of the program. Fortunately, 3 million of those 6 million will be eligible for sliding-scale subsidies that the ACA provides to help low-income and middle-income Americans purchase private insurance – if they earn between 100 percent and 400 percent of the federal poverty level. ($11,170 to $43,320 for an individual).

What is less fortunate is that the CBO estimates that those subsidies will cost Washington $3,000 more per person than if the same people were covered by Medicaid: private health insurance plans have higher administrative costs than Medicaid and also tend to pay providers more.

3 million left out in the cold

The other 3 million will be left out in the cold. The subsidies, which come in the form of tax credits, are earmarked for those who earn between 100 percent and 400 percent of the federal poverty line. Ironically, if a person earns “too little” (less than 100 percent of the FPL), they are not eligible for the subsidy. (The ACA assumed that they would be covered by the new Medicaid.)

At the same time, if they earn “too much” to qualify for Medicaid in a state that limits eligibility to 50 percent of the FPL, they will be shut out of that program as well – leaving them in a no-man’s land where they have no sure access to medical care.

In those cases where they do receive the care they need, the rest of us will wind up covering their unpaid bills as we watch our insurance premiums climb.

The Supreme Court May Have Saved Lives … by Keeping People Off Medicaid

magine that you are the head of a family of three, struggling to get by on an income, say, of $25,000 a year. You’ve signed up for your employer’s health plan because you want your family to get good health care when they need it. But that takes a big bite out of your paycheck — $250 a month.

When you first heard about the president’s health plan, you heard him say that if you like the plan you’re in you can keep it. That was good news. You also believed the whole point of the reform was to help families like yours get health insurance if for some reason you had to seek insurance on your own.

 

Now get ready for some surprises. The first will be an announcement that in another year or so your employer’s health plan will no longer be available to you. The reason: plain economics. People at your income level will qualify for as good or better health insurance in a new health insurance exchange. And almost all the premium will be paid for by the federal government. Most people like you would rather have higher wages than a health plan that duplicates what you can get almost for free, your employer will reason. So in order to compete for labor, your company will have to give prospective employees the compensation package they most want. And your employer will be right.

Then there will be a second surprise. Under the new rules, if you are eligible for Medicaid, you can’t get private insurance in the exchange. Further the health reform law is designed to force the states to raise the income level for Medicaid. If your state complies, someone with your income will be eligible for Medicaid and you won’t be allowed in the exchange!

Now if you were a resident alien, the rules are different. Since they don’t generally qualify for Medicaid, immigrant families at your income level can get subsidized private insurance in the exchange. But alas, you’re a citizen. So this option isn’t open to you.

Now let’s say you are under the impression that Medicaid is second rate insurance and you remember that your employer promised to pay more in wages once your health benefit is gone. What about using the higher wages from your employer to buy private insurance outside the exchange?

Now get ready for the third surprise. There isn’t going to be any market for private insurance outside the exchange — at least not for you. The insurance companies are going away. The brokers are going away. The market is going away.

Now for the final surprise. The only option open to you under the Affordable Care Act is Medicaid! Why should you care? Because your initial impression is correct. Medicaid is second rate insurance.

In most places Medicaid patients have a terrible time finding doctors who will see them and facilities that will admit them. That’s why so many of them turn to community health centers and the emergency rooms of safety net hospitals for basic medical care. Medicaid enrollees turn to emergency rooms for their care twice as often as the privately insured and even the uninsured. In fact, if you’re trying to get a primary care appointment, it appears your chances are better if you say you are uninsured…

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Here is where is gets little bit tricky, owing to the bizarre structure of ObamaCare. The new health law is trying to get the states to expand Medicaid eligibility to 138% of the federal poverty level ($15,415 for an individual or $26,344 for a family of three). But let’s suppose that, thanks to the Supreme Court, a state doesn’t do anything. It turns out that only people who are between 100% and 138% of poverty can then go into the exchange and get private insurance.

So if your employer does raise your pay and pushes you over that threshold, you qualify. However, while your salary is still only $25,000 you may not be eligible for Medicaid. Here’s the double whammy:  You will not be allowed into the exchange either. You will be in a sort of “no-man’s-land” donut hole. And the only way out will be for you to somehow earn more income. Or, lie about it. This may be one of the very few instances where people will find it their self-interest to tell the IRS their income is higher than it really is!

According to the CBO about two-thirds of the states will not expand eligibility above 100% of the federal poverty level. That’s why 3 million citizens will be liberated and will get private insurance instead. Moreover, the subsidies in the exchange are incredibly generous. The most the family has to pay is 2% of their income.

Further, the private plans in the exchange will pay providers about 50% higher fees that the rock bottom payments they would have gotten from Medicaid. This will be a huge relief for safety net facilities that are scraping by on inadequate resources as it is. And it’s a reason why the CBO may have underestimated how many states will find this option very attractive.

ObamaCare is still a Rube Goldberg contraption that desperately needs repealing and replacing. But in the interim, the Supreme Court has done a lot of families a big favor.

 

August 8, 2012 - Posted by | Uncategorized | , , ,

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