Reporting on the latest issues.
The Medicaid Gap
The House and Senate health care reform bills have important differences that could affect millions when it comes to insurance for the poorest of the poor.
By Jake Blumgart
November 20, 2009
House Speaker Nancy Pelosi of Calif., left, accompanied by Senate Majority Leader Harry Reid of Nev., speaks with reporters outside the White House. (AP Photo/Manuel Balce Ceneta)
Medicaid has always been one of the more haphazard elements of America’s patchwork social safety net. Originally designed to provide some of the poorest of the poor with health care coverage, the program was implemented along with Medicare in 1965 as a substitute for a politically unfeasible single-payer system. Unfortunately, the key word is “some.” Unlike Medicare, which covers all seniors, Medicaid currently neglects vast swathes of the population.
Consider the roughly 2,000 port truck drivers at the Port of Seattle, who haul massive containers from ship to warehouse for poverty-level wages and no benefits. Since Reagan’s deregulation of trucking in 1980, these drivers have been classified as independent owner-operators, meaning they have to pay for their own cabs, repairs, road taxes, and gas—along with other expenses—from their princely annual salaries of $30,000 (or less). Most have families, and few can afford health insurance.
“We don’t have any benefits, no insurance, nothing,” said Olufemi Dosunmu, a port trucker who is supporting his wife and children. “We are really struggling with the health care problem. If this [reform] could get passed it would be a break through, not for just me, but for a lot of people that have low-income like me.”
Dosunmu and his family fall into one of Medicaid’s many gaps. Washington state’s program covers up to 77 percent of the poverty line—less than $17,000 a year for a family of four—nowhere near the income of an average trucker. And in a country where fewer working-class jobs offer health insurance, there are tens of millions more like him.
So when it became clear that Medicaid expansion would play a key role in both the House and Senate proposals, progressive wonks let out a collective sigh of relief. (Don’t be surprised if you didn’t notice; they were drowned out by the din of the public option brawl.) Both the recently passed House bill and the recently introduced Senate proposal would greatly simplify the current muddle of eligibility policies that vary widely from state to state. They would both also restructure Medicaid’s funding to ease the pressure on cash-strapped state governments.
But there are also significant differences in the bills’ Medicaid expansion.
Expanding Eligibility
Both bills would do away with the current hodgepodge of state eligibility requirements (in Vermont anyone under 150 percent of the poverty line—$33,075 for a family of four—can enroll, while Arkansas only allows for parents under 17 percent—just under $4,000 for a family of four). This is accomplished in two ways. First, by federal mandate, both bills base Medicaid eligibility on income, rather than the current state-based categorical system which chiefly benefits parents, the disabled, or elderly. Only five states currently offer Medicaid benefits to impoverished adults without those qualifications. Under either bill, Medicaid would broadly offer support to low-income people for the first time in the program’s history.
In addition to excluding childless adults who meet the poverty requirements, most of Medicaid’s current state based coverage is pretty skimpy; more than half of states don’t ensure their citizens up to the poverty line can enroll. A second eligibility expansion in both the House and the Senate bill would address this issue. Both bills would create a national eligibility limit well above the poverty line, but the bills differ on how much above the poverty line that expansion will be. The Senate bill puts that expansion at 133 percent of the poverty line, while the Senate puts it at 150 percent. It may seem like a fairly insignificant difference, but 2.5 million people live in that 17 point gap, including Dosunmu and his family.
These people won’t be completely shut out if they aren’t covered by Medicaid. They’ll still be able to tap into the subsidies available through the health insurance exchanges, an option Dosunmu, who says he’d like to help pay for his insurance, would prefer. But keep in mind these are people with very restricted incomes—every dollar counts and, even with subsidies, insurance available through the exchange will be far more expensive than Medicaid, which doesn’t charge premiums and includes minimal co-payments.
Childrens‘ Insurance
But although the House bill is better on expanding those eligible for Medicaid coverage, it does have a problem: It would completely eliminate the Children’s Insurance Program (CHIP), and most of the children would be covered by Medicaid instead. And even under the House’s more generous expansion, some of the CHIP children’s families will not be eligible for Medicaid, so they will be forced into the exchanges where they will get less coverage than Medicaid or CHIP provide.
Sen. Jay Rockefeller (D-WV), who sits on the Finance Committee, came out swinging against just such a policy, asking for the Senate bill to preserve the CHIP program.
“Sen. Rockefeller has been pretty vocal about [CHIP] in the finance committee,” says Alexander Hertel-Fernandez, research assistant at the Economic Policy Institute. “Children’s health insurance programs often are guaranteed a certain set of benefits like certain preventative care check-ups, dental coverage, these sorts of things that children need more than adults. The CHIP programs have important features that might fall through the cracks if everyone is folded into Medicaid or the exchange.”
How to Pay for It
Most of the existing problems with Medicaid are a result of mixed state and federal funding. States are constitutionally required to keep their budgets balanced, which is tough on programs like Medicaid, whose enrollees tend to wield little political power with which to protect their interests. This has resulted in both cuts to Medicaid at the state level and unfair cost-saving tactics, like underpaying providers.
The bills address this issue in very different ways. The Senate proposes to increase by 32.3 percentage points the share of Medicaid paid by the federal government overall, for both new enrollees and those currently on the books. If they pay 40 percent to the state’s 60, they’ll be putting up 72.3 percent of the cost by 2019. But it varies from state to state, so until 2019, the assistance provided will depend upon how much government assistance they currently get. If a state’s Medicaid eligibility rates already exceed the federal poverty line, they will get a 27.3 percent increase in federal spending, while poorer states that don’t will get a 37.3 percent bump.
The House version is far simpler. It explicitly guarantees complete cost coverage for all new Medicaid enrollees for the first year and 91 percent of the cost from there on in. But
the House bill keeps those currently eligible under the current federal-state cost sharing scheme.
Either proposal guarantees a larger federal role in Medicaid. The House bill is more preferable since it provides a concrete federal guarantee immediately, which could be easily extended in future reforms. But the Senate option isn’t too shabby either, and it would better ease the strain on struggling Medicaid programs.
Looking ahead
Ultimately Medicaid is the best way to care for the working poor. Dosunmu and his family would benefit more from getting into Medicaid than they would from buying into the exchanges. From the funding perspective, both bills leave the majority of Medicaid expansion in the hands of the federal government, which is less susceptible to the funding yo-yos of state governments. At least we can rest assured that whatever the outcome, post-health care reform Medicaid will, at the very least, be better than what we have now.
Jake Blumgart is a staff writer for Campus Progress. Follow him on Twitter.
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The Senate bill contains more lies, more manipulation, more coercion, and more bribes to be paid by us.
To get the House to pass the Obamacare scam, Obama and his accomplices lied, manipulated, intimidated, coerced and bribed (at our expense) Big Pharma, the AARP, the AMA, “Catholics” like Cao, insurance companies, etc.
To get the Senate to pass the scam, Obama and his accomplices have perfected the lies, the manipulation, and the intimidation. And they are bribing (at our expense) additional organizations and people like Ben Nelson, Blanche Lincoln, and Mary Landrieu.
The intent of the bill is NOT to improve anything. It’s just government control (socialism/Marxism). Period.
— AntonioSosa - Nov 21, 12:34 AM - #2111.txt;10;10
— QxlKPvqxhXsFS - Nov 21, 07:02 AM - #hate to be a definition nazi but
“ a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.”
dictionary.reference…
socialism is common ownership, like a health insurance company that was run like medicare or something, or that paid based on some type of social insurance scheme.
And just FYI “Socialists” like sanders have supported Single-payer.
— cult of skaro 24 - Nov 21, 08:51 PM - #