September 12, 2013

Mainers fall into Medicaid loophole

Failure to expand MaineCare leaves 10,500 people without coverage and ineligible for federal subsidies.

By Joe Lawlor
Staff Writer

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

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.

(Continued on page 2)

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