September 13, 2013

HEALTH REFORM STORIES: Low-income Mainers fall into Medicaid loophole

In Maine and other states that have opted out of Medicaid expansion, families whose earnings are just below the federal poverty level will receive little help from the new Affordable Care Act.

By Joe Lawlor jlawlor@pressherald.com
Staff Writer

For Stacey Jacobsohn, the state's failure to expand Medicaid is doubly disturbing.

click image to enlarge

In this Aug. 29, 2013 photo, Morgan Kinney, 31, a clinical professional counselor working part-time while his girlfriend finishes medical school, sits on his couch in his his apartment in Denver. Kinney figured he’d have no choice but to pay for insurance in 2014 to comply with the new federal health coverage mandate, but has learned that his income makes him eligible for Medicaid under the new Colorado expansion program. Mainers in similar economic circumstances face harder choices thanks to the state's decision to reject an expansion of Medicaid here. (AP Photo/Brennan Linsley)

AP

Medicaid expansion happy surprise for Colorado man

By KRISTEN WYATT, Associated Press

DENVER — He makes just $10,000 a year as a clinical professional counselor, so Morgan Kinney decided to spend what little extra money he had this year paying down student debt rather than buying health insurance.

The 31-year-old Denver man figured he would have no choice but to buy insurance next year to comply with the new federal health insurance mandate, so last month he entered his personal information into the online calculator of the Colorado insurance exchange.

Yet instead of a cost estimate, he received a rejection notice saying he was not eligible to shop on the exchange.

"I was telling my girlfriend, 'This thing is broken, it won't let me in,' and she looked and said, 'I think it's because you're supposed to be on Medicaid.' I said, 'No, that's for poor people.' Well, sure enough, that was me."

Colorado is one of at least 24 states expanding Medicaid access for adults under the Affordable Care Act. In Colorado, that means single adults who earned less than $15,400 last year will have access to Medicaid.

Medicaid expansion is a major plank of the administration's plan to get every American covered by health insurance. But the U.S. Supreme Court last year limited the federal government's ability to penalize states that decide against the expansion, leading to a patchwork of Medicaid eligibility standards. The Congressional Budget Office has projected 11 million Americans will get coverage through the Medicaid expansion by 2022.

Kinney said he feels incredibly fortunate to live in a state where he will receive basic coverage through the government program.

"Until now, I've used delusion and denial to pretend something wouldn't actually happen to my health," Kinney said. "So now it's nice to think about actually having coverage. It didn't click when I saw all the 'Obamacare' stuff on the news; it was just people yelling at each other. ... It was just politics. Now it feels real."

She will lose her MaineCare -- what Medicaid is called in Maine -- and also will not be eligible for federal subsidies to purchase private insurance on the new health insurance exchanges being set up under the Affordable Care Act.

Jacobsohn, of Augusta, falls into a category of about 10,500 childless adults who earn up to 100 percent of the federal poverty level. Medicaid expansion would have covered an additional 60,000 or so adults in Maine, with the federal government reimbursing the state the cost of the expansion 100 percent for three years.

Adults in Jacobsohn's situation -- those who make less than $11,710 per year -- are being kicked off MaineCare at the end of 2013 because the state approved Medicaid cutbacks in 2011. The cutbacks rolled back Maine's Medicaid expansions the state approved in the late 1990s and early 2000s.

Had this year's Medicaid expansion survived a veto by Gov. Paul LePage, Jacobsohn would have kept MaineCare benefits.

And because the ACA, when passed in 2010, presumed that states would approve Medicaid expansion, those who make 100 percent or less of the federal poverty level can't purchase subsidized insurance on the exchanges. The exchanges will start in 2014, and individuals can enroll starting in October.

"(Medicaid expansion) was the foundation upon which the exchanges were built," explained Sara Gagne-Holmes, executive director of Maine Equal Justice Partners, a health care advocacy group that supported Medicaid expansion. But a 2012 U.S. Supreme Court decision, while upholding President Obama's signature health care law, allowed states to opt out of the Medicaid expansion. After a lengthy struggle in Augusta, Maine is one of the states opting out.

For someone like Jacobsohn, who is self-employed and makes less than $10,000 per year, the difference in price to purchase health insurance on the exchange if she fails to earn more than 100 percent of the poverty level is substantial.

A single adult earning $11,086 would have to pay $3,018 in annual health care premiums when purchasing private insurance without a subsidy on the new health care exchange, according to estimates provided by Maine Equal Justice Partners.

If that same adult instead earned $11,710, and thus qualified for the subsidy, the annual premium would decline to an estimated $234.

Jacobsohn, who suffered a stroke a few years ago, said she dreads losing her insurance.

"I'm going to eat as well as I can and take care of myself. Hopefully I won't have another stroke," said Jacobsohn, who testified before the Legislature in favor of Medicaid expansion. "I have no idea what's going to happen. Hopefully, I can find a job that has insurance."

Rep. Deborah Sanderson, R-Chelsea, said legislators were aware of the loophole that Jacobsohn falls into when debating Medicaid expansion, but the state has no ability to force rule changes on the federal government.

"That's something that should be fixed on the federal level," said Sanderson, who voted against expansion.

Sanderson said that while it was an unintended consequence of the federal health care law, it nevertheless may end up being helpful in some cases, as it will spur people to earn more money.

"A little bit of an incentive is not a bad thing," Sanderson said.

Sanderson said just because Medicaid expansion failed, it doesn't mean that the conversation is over, as the Legislature could consider a more limited expansion next year.

She said those who would have qualified for MaineCare benefits under the failed expansion effort in many cases can still get quality health care at a reduced price on the exchanges.

"It's very inexpensive and may be a very good alternative," Sanderson said, describing the exchanges.

Gagne-Holmes argued the opposite, pointing out that even though subsidized premiums may be low, the premiums combined with maximum out-of-pocket costs permitted under the law would mean that some low-income families would be spending up to 25 percent of their income on health care.

"If you're making under $15,000 and have to pay 20 percent of your income on health insurance, that's just not realistic," Gagne-Holmes said.

But J. Scott Moody, CEO of the Maine Heritage Policy Center, a conservative-leaning think tank, said Medicaid expansions in Maine have been proven not to work, and that they merely shift costs.

"The benefits of Medicaid expansion don't ever materialize," Moody said. "There has not been a decrease in the percentage of people uninsured in Maine even though we've had two expansions."

Moody said the expansions also end up increasing the cost of private insurance. For instance, young childless adults in low-paying jobs who qualify for MaineCare would in many cases choose free MaineCare over more costly coverage provided by their employer, he said.

That decreases the number of young people in the private insurance pool, making private insurance more costly for everyone, Moody said.

But Gagne-Holmes said in most of those situations, the young people end up being uninsured rather than accepting their employer's insurance, if MaineCare is not available.

Hilary Schneider, an official with Maine's American Cancer Society Cancer Action Network, said kicking people off MaineCare will result in more bankruptcies for individuals who end up with cancer. She said if they lose their jobs and health insurance because of the cancer and don't yet qualify for Medicare, they often end up with impossible-to-pay medical bills. Or they may end up not being able to afford chemotherapy treatments.

"It's going to be a huge undue hardship on people," Schneider said.

Joe Lawlor can be reached at 791-6376 or at:

jlawlor@pressherald.com

Twitter: @joelawlorph

 

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