Medicaid ‘coverage gap’ looms for millions

Poor people in 21 states due to miss out on funding, with some fearing for their lives.

MCCLATCHY WASHINGTON BUREAUSeptember 1, 2013 

WASHINGTON — One month after undergoing a partial hysterectomy in 2011 to remove a rare form of ovarian cancer, Erika Neal of St. Louis, got a double dose of more bad news: Her salary as deputy director of a nonprofit museum was being cut, and her job-based health coverage was being eliminated.

Without insurance, she went more than a year without tests that would tell her whether the cancer had reappeared. Neal continued to work, however, and now relies on an emergency state program to pay for the quarterly tests.

But when the program ends in December, she won’t be able to afford the diagnostic tests because her salary has been cut by 75 percent since 2009. As an adult with no children, she’s also ineligible for Medicaid, the state-federal health plan for the poor and disabled.

With no options for coverage, Neal rightly fears for her life next year.

“I’m always praying, but in 2014, my prayers will be ever more fervent,” she said. “If the cancer comes back and it’s not detected, it’ll kill me. Most ovarian cancers, by the time you find out you have it, you just need to plan your funeral. So it’s a blessing they have a test for it, but I can’t get the tests if I don’t have health insurance.”

Neal could rest easier if she lived in one of the 23 states where Medicaid eligibility is being expanded for low-income parents and childless adults next year under the Affordable Care Act. Michigan appears close to expanding Medicaid eligibility.

But Missouri and 20 other Republican-led states aren’t participating in the health care law’s Medicaid expansion, fearing the cost would require state budget cuts in other areas.

The remaining states, including Idaho, are still debating the expansion. The Idaho Legislature is expected to consider expansion next year.

That leaves Neal and 5.5 million others in those 21 states to fend for themselves in the “coverage gap,” a bureaucratic twilight zone where people with poverty-level incomes don’t qualify for Medicaid and can’t get tax credits to help buy coverage on the new insurance marketplaces called exchanges. Enrollment for them begins in October and they open in January.

Click below to see how many Idahoans in each county fall into the Medicaid coverage gap — incomes up to 138 percent of poverty, too young to qualify for Medicare and with no health insurance. Source: U.S. Census Bureau.

With limited access to preventative care, many in the coverage gap with manageable chronic illnesses could end up seeking primary care services in hospital emergency rooms, where medical aid is costly and fleeting.

“If they fail to get an insurance card and don’t have ongoing adequate coverage, that’s how they’re going to continue to get care, in the most expensive, least efficient, least helpful way that they can,” said Ellen Kugler, executive director of the National Association of Urban Hospitals.

Gerald Friedman, a health care economist at the University of Massachusetts Amherst, summarized the options for those caught in the coverage gap.

“There’s no way they can afford individual coverage at that income level, so they’ll do what they do now, which is they go to the free care pools in the hospitals, they go to public health clinics, they borrow from friends, they go to free clinics,” Friedman said, “and they just get sicker and sicker.”

The coverage gap is an unintended consequence of the 2012 Supreme Court decision upholding the Affordable Care Act.

The law was supposed to provide health insurance for most Americans next year by expanding Medicaid in all states to people earning up to 138 percent of the federal poverty level. That’s about $15,900 for an individual in 2013, or nearly $32,500 for a family of four.

Tax credits would then go to other low- and middle-income people to help them buy coverage on the insurance marketplaces. If the Medicaid expansion was implemented in every state as originally planned, an estimated 22.3 million Americans likely would have gained coverage next year, according to the Urban Institute, a nonpartisan social and economic policy think tank.

But when the Supreme Court ruled that states could opt out of the expansion, Republican-led states took advantage. Rather than expand their Medicaid programs, most kept their programs as is — open mainly to the poorest of the poor.

In 33 states, parents must now earn less than the federal poverty level — $19,530 for a family of three — to be eligible for Medicaid, according to the Kaiser Family Foundation, a nonpartisan health care research group. Eighteen of these states limit eligibility to parents in severe poverty, which is 50 percent of the federal poverty level or lower.

In Idaho, where 300,000 people lack health insurance, the Department of Health and Welfare determined that expanding Medicaid could save county property taxpayers some $478 million through 2024, because the state could replace its existing system of providing medical treatment for indigent residents with one that, at least initially, is 100 percent funded by the federal government.

But lawmakers and Gov. Butch Otter balked at tackling Medicaid expansion during the 2013 legislative session, when Republicans were sharply divided over adopting a state-based insurance exchange. The exchange passed the Senate only with Democratic support.

Before any expansion, Otter has said that he wants to revamp Idaho’s Medicaid program to ensure that any new recipients take more responsibility and make good health care choices.

To that end, Health and Welfare has been developing its “Healthy Idaho Plan,” which would require newly eligible Medicaid recipients to make co-pays to discourage abuse of services, punish those who don't adhere to rules and offer incentives for healthy living, including for quitting smoking.

The Idaho Association of Commerce and Industry says a failure to expand Medicaid’s reach would cost $12.3 million to $18.5 million a year in penalties for large companies that don’t insure their employees and unspecified amounts for other businesses as their insurance and taxes continue to subsidize care for the uninsured.

Some Republican lawmakers worry that President Barack Obama’s plan to pay for the new Medicaid enrollees could change or go by the wayside.

Neal, of Missouri, isn’t buying that argument.

“In 28 years, the federal government has never missed a Medicaid payment to the state of Missouri ... ,” Neal said.

In Georgia, state officials have said there aren’t enough caregivers to handle an expanded Medicaid population.

But that’s a false argument, said Cindy Zeldin, executive director of Georgians for a Healthy Future, a nonprofit group that advocates for access to affordable health care. She said that concerns about the cost and provider shortages would be mitigated by the boost in jobs and spending the Medicaid expansion would create.

“We are not bringing in new people from another state into Georgia,” Zeldin said. “We’re talking about Georgians who are already here, who already have health care needs, who are already sporadically using the safety net, or hospitals seeking care only when it’s too late.”

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