Are You a Health Care Have or Have-Not? Depends Where You Live
WHY YOU SHOULD CARE
Because we may have found a way to reduce health care spending.
In April, it was UnitedHealthcare. In July, Humana. A month later, Aetna followed suit. That’s when these health-insurance giants announced they were pulling out of most of the insurance exchanges set up by the Affordable Care Act, President Barack Obama’s signature legislation, leaving some to doubt the program’s future.
So go the headlines, but lurking beneath them is a different story, with its own successes and failures. At least one part of Obamacare has worked — and worked well: the expansion of Medicaid in the states that chose to do so. These states are spending much less on health care because, experts surmise, making coverage more available actually cuts costs by promoting routine and preventative health care.
In some instances the numbers are staggering — not least because they’re counterintuitive. A Robert Wood Johnson Foundation report found that Medicaid expansion saved about $7.4 billion in 2014, primarily because hospitals didn’t have to treat as many uninsured patients. A study released in June by the University of Michigan found that the number of people insured by expanded Medicaid in Michigan increased by more than 6 percent — hundreds of thousands of residents — in the first three months after the program’s April 2014 launch. And yet the state saw 4,000 fewer hospitalizations of non-elderly adults between April and December 2014 compared to the averages for those same months in 2012 and 2013.
A success story, right? Sure, if you’re in Michigan. Not so much if you live in Alabama.
We were pretty startled by the huge differences between the [Medicaid] expansion and non-expansion states — [it’s] really creating two Americas.
Adam Searing, associate professor at Georgetown’s McCourt School of Public Policy
You see, back in 2012, when the U.S. Supreme Court ruled that the ACA was legal, the justices left it up to the states whether to sign up for the expanded Medicaid part of Obamacare. The feds promised to pay 100 percent of the joint federal-state program for the poor, a share that will decrease to 90 percent by 2020. Thirty-one states and the District of Columbia signed up; 19 states said no thanks.
Why would states turn down all that health care money from Washington? Some state legislatures don’t believe the federal government will end up paying its share. Other state leaders, especially those in the predominantly rural South, claim that paying even 10 percent is a budget buster. And then there are those representatives who hesitate to support expansion because they question what’ll happen to the ACA after the presidential election.
The result is an America of health care haves and have-nots. “We were pretty startled by the huge differences between the expansion and non-expansion states — [it’s] really creating two Americas in safety-net health care,” says Adam Searing, coauthor of a Georgetown University analysis, which found that providers in expansion states have hired more staff, opened new facilities or expanded existing ones, and offered additional services to patients.
Meanwhile, residents of opt-out states must adhere to existing Medicaid guidelines, which can be shockingly low. Expanded Medicaid is available to individuals and families making at or below 138 percent of the federal poverty level (FPL), which is $27,724 for a family of three and $16,243 for a single person with no dependents. Compare that to existing Medicaid in opt-out country — 13 percent of the FPL in Alabama and 23 percent in Mississippi. Childless adults are ineligible for Medicaid in almost all non-expansion states unless they are disabled.
The ACA was supposed to provide low-income people with insurance relief through expanded access to Medicaid. It certainly worked for 39-year-old Lucia Flores, a circulation clerk at a Maryland library who rushed to the emergency room in July 2014 with heavy bleeding. The staff at the Anne Arundel Medical Center in Annapolis checked her in and thoroughly checked her out, diagnosing a miscarriage. “If I didn’t have Medicaid, I’m not sure what would have happened,” says Flores, who asked that her real name not be used. “It really helped not to have to worry about bills when dealing with that nightmare.”
Yet some 3 million Americans make enough money to exceed the FLP Medicaid threshold in opt-out states but not enough to qualify for premium tax credits in the ACA’s insurance exchanges. That’s created a “coverage gap.” The majority of those who have tumbled into the gap reside in Southern opt-out states. That’s you, Texas, with about 25 percent of the total, and you, Florida, with an additional 20 percent. And thanks to the private insurance giants drastically reducing their presence in ACA exchanges, most of those lucky enough to qualify for tax credits will pay higher premiums, according to a Kaiser Family Foundation analysis.
For residents of non-expansion states, the health care burden can be crippling. “I’m trying to get a business off the ground, but how can I afford it when I have to spend about 16 percent of my income on insurance premiums, which don’t include copays and deductibles?” asks Tim H., 53, a warehouse manager and landscape business owner from Chattanooga, Tennessee, who asked that his full name not be used. Tim’s 2015 income was $15,790, which would have qualified him for Medicaid if he lived in an expansion state. Since Tennessee opted out, he ended up owing $1,791 in premium coverage for his ACA health plan because he didn’t qualify for subsidies. Last year he also had to pay out of pocket for his sleep apnea treatment and is on a monthly payment plan for an ER bill from a workplace injury.
According to the Robert Wood Johnson Foundation report, the health care gaps are largest for specialty care like mental health counseling. Georgetown’s Searing thinks these inequalities could be reduced by a 50-state adoption of Medicaid expansion so that the benefits experienced by adults in expansion states can be enjoyed by all low-income individuals in the U.S. When it comes to health care, many experts think it really should be e pluribus unum.