January 31, 2013
Penultimate poor and the individual mandate
The Department of Health and Human Services just released regulations that address, to a degree, the plight of the poor in states that refuse to expand their Medicaid populations. The ACA's original design made it so that the Medicaid expansion would cover childless adults up to 133% of the federal poverty level, and others who obtain health insurance through exchanges would be eligible for a tax credit if they earned between 100% and 400% of the FPL. After NFIB v. Sebelius rendered the mandatory expansion an option, some states have declared that they will not expand their Medicaid programs, thus leaving people under 100% of the FPL subject to the individal mandate but too poor to afford private coverage, even with tax credits. Many states cover childless adults who are extremely poor (e.g., West Virginia covers those who earn up to 17% of the FPL), and people earning above 100% of the FPL will receive tax credits - but we have a gap for people who are very poor but will not be able to enroll in Medicaid in non-participating states.
So, keep an eye out for the new regulations, in which HHS clarifies that the individual mandate does not apply to people who are eligible for Medicaid but barred from entering the program because they live in states that have opted out of the expansion. While the clarification is expected (given the hardship exception that already exists for the individual mandate), it is important to know that HHS intends to protect people from their states' decisions. (How's that for turning federalism on its head?)
Unfortunately, the regulation does not and cannot address the bigger problem: getting the penultimate poor into health insurance. Though they will be exempt from the penalty for lack of insurance, they will not have a health insurance home either, thereby denying them much-needed consistent access to the healthcare market. Congress must either amend the ACA in light of NFIB or produce new legislation addressing this coverage gap.
January 31, 2013 | Permalink
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