A Costly Catch-22 In States Forgoing Medicaid Expansion

Outside the office of Utah Gov. Herbert Friday, Betsy Ogden lays paper chains on a pile symbolizing uninsured state residents who would be covered by a Medicaid expansion. Rick Bowmer/AP

Outside the office of Utah Gov. Herbert Friday, Betsy Ogden lays paper chains on a pile symbolizing uninsured state residents who would be covered by a Medicaid expansion. Rick Bowmer/AP

Poor adults who live in states that don’t go along with the federal health overhaul’s expansion of Medicaid expansion face a double whammy.

They can’t take advantage of the law’s widened eligibility standards allowing individuals with incomes up to 138 percent of the federal poverty level ($15,856 in 2013) to sign up for Medicaid. But they’re also not likely to qualify for subsidized coverage on the new state-based health insurance exchanges set to open in January because, ironically, they’re too poor.

Premium tax credits will be limited to individuals with incomes between 100 and 400 percent of the poverty level ($11,490 to $45,960 in 2013).

Without financial help, coverage is likely to be unaffordable for many people living below the poverty level, says Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities.

More than 11 million uninsured adults could fall into this neither/nor category, according to an estimate published by the Urban Institute last year.

To date, about half the governors have announced that they want to move ahead with Medicaid expansion.

Many people assume that state Medicaid programs typically cover people up to the poverty level, says Park. Although that’s true for children, he says, for their parents and other adults that isn’t the case.

Medicaid eligibility levels vary widely by state, but typically only very poor adults qualify for coverage. Last year, for example, the median eligibility threshold for working parents was 63 percent of the federal poverty level and 37 percent of poverty for jobless parents, according research by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

Under current Medicaid rules, childless adults are in the toughest spot.

“In a large majority of states, an adult without children who’s not disabled isn’t eligible at all for Medicaid,” says Park.


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A Costly Catch-22 In States Forgoing Medicaid Expansion

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