As the Republican Party continues efforts to replace and repeal the Affordable Care Act (ACA), industry experts are examining reorientation of the Medicaid program. According to recent proposals, a block grant would allow states to decide how to apportion health care dollars for those who need it most.
ACA Medicaid Expansion
Medicaid is a federal/state partnership with shared authority and financing for low-income individuals, the elderly and people with disabilities. Medicaid pays for health care for more than 74 million people nationally. Although participation is optional, all 50 states participate in the Medicaid program, though benefits vary widely among the states.
One of the major coverage provisions of the ACA was the expansion of Medicaid eligibility to nearly all low-income individuals with incomes at or below 138 percent of poverty ($27,821 for a family of three in 2016).
The expansion filled in historical gaps in Medicaid eligibility for adults and was envisioned as the vehicle for extending insurance coverage to low-income individuals, with premium tax credits for Marketplace coverage serving as a means to cover people with moderate incomes.
While the Medicaid expansion was intended to be national, a 2012 Supreme Court ruling essentially made it optional for states. Currently, 26 states — including Oregon and Washington — have expanded Medicaid and six states are currently implementing or planning to implement an expansion.
In Oregon, more than 400,000 people were added to the Oregon Health Plan, which now covers one in four Oregonians. As of the first quarter of 2016, nearly 132,000 Oregonians were enrolled in individual coverage on the Marketplace, with about 95,000 of those consumers receiving financial help.
In states that did not expand Medicaid, many adults fall into a “coverage gap” of having incomes above Medicaid eligibility limits but below the lower limit for Marketplace premium tax credits. Nationally, more than two-and-a-half million poor uninsured adults fall into this coverage gap.
The majority of people in the coverage gap are in poor working families — where at least one family member is employed either part-time or full-time but still living below the poverty line. Most people that fall into this gap are concentrated in states with the largest uninsured populations, places like Texas, Florida, Georgia and North Carolina.
As legislators continue to debate the ACA, industry experts fear more Americans will fall into this coverage gap. Meanwhile, states are examining how new federal law may affect state financing for Medicare expansion populations, conditions for eligibility and enrollment and renewal procedures.