Saying no to ‘Obamacare’ could hurt states
For Gov. Rick Perry, saying “no” to the federal health care law also could mean turning away up to 1.3 million Texans, nearly half the uninsured people who could be newly eligible for coverage in his state.
Gov. Chris Christie not only would be saying “no” to President Barack Obama, but to as many as 245,000 uninsured New Jersey residents as well.
The Supreme Court’s recent ruling gave governors new flexibility to reject what some Republicans deride as “Obamacare.” But there’s a downside, too.
States that reject the law’s Medicaid expansion risk leaving behind many of their low-income uninsured residents in a coverage gap already being called the new “doughnut hole” — a reference to a Medicare gap faced by seniors.
Medicaid is a giant federal-state health insurance program for the poor, now mostly covering children, mothers and disabled people.
The expansion in Obama’s health care overhaul was originally expected to add roughly 15 million uninsured low-income people, mainly adults without children, who currently are not eligible in most states. Washington would pick up the entire cost for the first three years, with the federal share then dropping to 90 percent. The Medicaid expansion accounts for about half the total number of uninsured people projected to get coverage under the law.
If every state were to reject that Medicaid expansion — as the Supreme Court ruling now allows — some low-income people would still be picked up by other coverage provisions meant to help the middle class.
But nearly 11.5 million uninsured people below the federal poverty line would be left behind in a new coverage gap, according to recent estimates from the Urban Institute. That brings to mind the infamous “doughnut hole” in the Medicare prescription drug benefit, in which seniors with high drug costs find themselves paying out of pocket much of the year.
Those who fall into the new gap would neither qualify for Medicaid in their states under current rules nor be eligible for subsidized private insurance in new state marketplaces that Obama’s law calls exchanges.
Low-income children and mothers would continue to have insurance through Medicaid. Then, starting in 2014, millions of people over the poverty line would have subsidized private coverage through the new exchanges. “And then this group in the middle has nothing,” said Matt Salo, executive director of the National Association of Medicaid Directors.
His organization takes no position on what states should do.