Jon Perr: Health Insurance "Coverage Gap" Coming to a Red State Near You: Noted for September 4, 2013
For the denizens of red state America, the final launch of the Affordable Care Act is fast becoming a Shakespearean tragedy of epic proportions. Even as the Defund Obamacare crowd continues its tale told by an idiot, Republicans are beginning to realize that Obamacare by any other name smells much sweeter. And now, millions of Americans in the red states are learning they will fall into a "coverage gap," needlessly left without health insurance because of the Republicans' murder most foul.
Last week, McClatchy documented the unnecessary pain being inflicted on red state residents by their elected Republican representatives. The account tells the story of St. Louis museum deputy director Erika Neal, an ovarian cancer survivor forced to endure a substantial pay cut and the loss of her job-based health insurance in 2011:
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 Obamacare's Medicaid expansion, fearing the cost would require state budget cuts in other areas. The remaining states are still debating the expansion.
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. Enrollment for them begins in October and they open in January.
Roughly 260 million Americans (roughly 85 percent) already have health insurance provided by their employers, the government or through individual policies they purchased. In places like Oregon, Colorado, New York, California and other, mostly Democratic states, governors and state legislators accepted the expansion of Medicaid to provide free health insurance for those earning up to 138 percent of the federal poverty (FPL). For those earning between 138 and 400 percent of the FPL, the Affordable Care Act's subsidies will help them purchase insurance in the private market. But in the states where Republicans said "no" to the expansion of Medicaid, the picture is much different. As the AP explained the coverage gap:
Nearly 2 in 3 uninsured people who would qualify for health coverage under an expansion of Medicaid live in states which won't broaden the program or have not yet decided on expansion.
The resulting Republican body count is staggering. Thanks to the GOP's rejection of Medicaid expansion, 1.3 million people in Texas, 1 million in Florida, 534,000 in Georgia and 267,000 in Missouri will be ensnared in the coverage gap.
Currently, the $350 billion Medicaid program serves roughly 63 million Americans. On average, the federal government picks up 57% of the tab, with poorer states like Mississippi and Alabama getting 75% of the funding from Washington. Medicaid not only pays for a third of nursing home care in the United States; it covers a third of all childbirths. (In Texas, the figure is one-half.) As with Medicare, Medicaid provides insurance for substantially less than private insurers (27% less for children, 20% for adults), while new studies from Oregon and Massachusetts show it dramatically improves the health of its recipients. (So much for the claims of Republicans like Tennessee Senator Lamar Alexander, who charged that Medicaid is "a medical ghetto" that "none of us, or any of our families, would ever want to be a part of for our health care.")
But the states that refuse the Medicaid expansion can continue to set their own rules for eligibility. And in a place like Mississippi, where former RNC Chairman and Governor Haley Barbour claimed "we have people pull up at the pharmacy window in a BMW and say they can't afford their co-payment," the coverage gap will be huge. As the Washington Post's Glenn Kessler warned:
Mississippi provides some of the lowest Medicaid benefits to working adults in the nation. A parent who isn't working can qualify only if annual family income is less than 24 percent of the poverty line. Working parents qualify only if they make no more than 44 percent of the federal poverty level. Seniors and people with disabilities are eligible with income at 80 percent of the poverty line...
Translated from the federal poverty guidelines, that means a working Mississippi couple with one child could earn no more than $8,150 a year and still qualify for Medicaid, seniors and people with disabilities could earn no more than $8,700, and a pregnant woman could earn no more than $20,000 a year.
The terrible--and needless--toll has prompted some GOP governors to buck their party and accept the Medicaid deal from Washington. In Michigan, Republican Governor Rick Snyder supported adding $1.4 in federal funds to the state's coffers in order to provide coverage for roughly 500,000 residents. That same dynamic explains why Governor Jan Brewer, certainly no fan of Barack Obama or Obamacare, accepted the federal Medicaid expansion on behalf of 300,000 Arizonans:
It's pro-life, it's saving lives, it is creating jobs, it is saving hospitals.
And it's virtually free.
After all, the federal government will pay for 100 percent of the cost of the Medicaid expansion until 2017 and 90 percent after that. But the billions the "opt-out" states will have to come up with in future years will be more than offset by their extra costs to compensate hospitals and other providers for the care of the uninsured. As Ezra Klein and Evan Soltas summed up a recent analysis by the RAND Corporation of 14 Medicaid rejecting states:
It finds that the result will be they get $8.4 billion less in federal funding, have to spend an extra $1 billion in uncompensated care, and end up with about 3.6 million fewer insured residents.
So then, the math works out like this: States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That's a lot of self-inflicted pain to make a political point.
Ohio Republican Governor John Kasich couldn't agree more. He is continuing to press his GOP legislative majority to accept the Medicaid expansion that would cover an additional 366,000 Buckeye State residents, declaring "I believe it's a matter of life and death." As Kasich warned his GOP colleagues in June:
When you die and get to the meeting with St. Peter, he's probably not going to ask you much about what you did about keeping government small, but he's going to ask you what you did for the poor. You'd better have a good answer.
Their answer--that Republicans must oppose the Affordable Care Act because President Obama supported it--like won't be sufficient to gain them entry through the Pearly Gates.
Or the continued affection of many of their own red state constituents because, as Shakespeare might say, the Republicans' offence is rank, it smells to heaven.