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Commonwealth Fund Report: Lowest-Income Americans to Suffer in Non-Medicaid Expansion States

By Anne L. Kim, CQ Roll Call

September 5, 2013 -- Up to 42 percent of periodically or chronically uninsured adults living in the 26 states that either have decided against or are unsure about expanding their Medicaid programs would not have access to the new health law coverage options, according to a recent report from The Commonwealth Fund.

The report surveyed people between the ages of 19 and 64 in 2011 and 2012 and found that two in five individuals living in those 26 states who were uninsured at some point in the survey period had annual incomes below the poverty line ($11,170 in 2012) in one or both of the years surveyed.

That potentially would leave these people "without access to the provisions for part or all of the time they were without coverage," according to the report.

The 2010 health care law (PL 11-148, PL 111-152) called for states to expand Medicaid coverage to people who make less than 138 percent of the federal poverty level. But the 2012 Supreme Court decision on the constitutionality of the overhaul said that states would not lose matching federal money for their existing programs if they decide not do so. That gave states the ability to decide whether or not to expand.

Many of the states that have decided against the Medicaid expansion are led by Republican governors and legislatures that are strongly opposed to the overhaul law. And although the federal government will initially pick up the tab for all the costs of broadening the program and eventually reimburse states for 90 percent of the added Medicaid expenses, the GOP lawmakers have said they don't want to expand the government program.

The report says that tax credits are available to help pay premiums for private insurance for people who earn between 100 percent and nearly 400 percent of the poverty level as well as to legal immigrants who earn less than the poverty level during a five-year Medicaid waiting period. But because lawmakers thought that all states would expand their Medicaid programs, similar allowances weren't made for those who earn below the poverty line.

"Yet the decision by many states not to participate in the law's Medicaid expansion means that many of the lowest-income adults will continue to lack access to affordable coverage," the report states.

The report also found that nearly 30 percent of people in households with incomes between 100 percent and 133 percent of the poverty level in 2011 saw their income reduced to below the poverty line in 2012. That's compared to the 12 percent of people who had made between 133 percent and 249 percent of the poverty level in 2011 who saw their income reduced to lower than the poverty line in 2012. In 2011, 30 percent of people who earned less than the poverty line saw their income increase in 2012 to the point where they would qualify for subsidized coverage.

Sara R. Collins, a coauthor of the report, said in an email that people with low incomes experience high instability in health insurance, moving in and out of coverage. And, she said, their income level can also change.

"So rather than have a steady source of coverage in the Medicaid expansion regardless of their employment status (those under 133 percent of poverty), people with low incomes in states that don't expand their programs will continue to experience periods without coverage and are at risk of having no new affordable options (either Medicaid or the premium subsidies) if their income falls below poverty," she said.

The researchers say that the data from the survey "reveal why it is critical for all states to fully explore the benefits of participating in the law's Medicaid expansion." The report also says Congress could amend the health care overhaul to allow for people who make less than 100 percent of the poverty level and do not qualify for Medicaid to participate subsidized private plans offered through the exchanges.

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