Welcome to the second blog in our series “The Affordable Care Act and You.” Our last blog highlighted some of the consumer benefits that were made possible by the Affordable Care Act (ACA). We discussed how the ACA banned insurance industry practices like lifetime dollar limits and gender rating. We also noted how the ACA increased access to health care through provisions that expanded dependent coverage and provided consumers with preventive services without cost sharing.
This blog will focus on the ACA’s changes to the Medicaid program, which has the potential to extend coverage to more than 16 million low-income individuals across the nation. Medicaid is a state and federal health insurance program that provides coverage to certain categories of low-income individuals and families—namely, children, their parents, pregnant women, people who are disabled, and the elderly. Currently, Medicaid provides health insurance to about 60 million low-income Americans. However, there are millions of individuals who do not qualify for Medicaid no matter how poor they are because they don’t fit into one of these specified categories. This coverage gap causes millions of low-income individuals to postpone necessary care and prescriptions, over-rely on emergency rooms, and lack any relationship with a primary care provider to obtain preventive care and health care screenings.
The ACA offers states the opportunity to close this Medicaid gap starting in 2014 by offering insurance to persons age 19 through 65 who have household incomes less than 133% of the federal poverty level (which is $14,856 for an individual or $20,123 for a couple). Moreover, the cost of covering them will be 100% paid for by federal funds for the first three years. This 100% federal match rate will gradually decrease to 90% by 2020. With this enhanced federal match rate, Illinois, for example, can expect over $21 billion in federal funds over the next 10 years
States that have already committed to closing the Medicaid coverage gap have realized that it is a great deal. The significant federal funding will enable states and local governments to support programs delivered to the newly eligible population, and thereby saving states an estimated $92 to $129 billion over the next five years. Covering the Medicaid gap in states will help pay for hospitals’ uncompensated care costs, which translates to an estimated $1.5 billion in savings in one state. Medicaid coverage would make it possible for individuals to have a relationship with a primary care provider. This will result in a healthier population and lower mortality rates. For more reasons of why states should opt in to the Medicaid expansion, read the National Health Law Program’s fifty reasons why Medicaid is good for your state.
This blog post was coauthored by Viviane Clement.