As we begin to wrap up the series, people still want to know about the Medicaid expansion and why some states are doing it and others are not. First, let’s understand who and what Medicaid expansion is. Medicaid is the nation’s health insurance program for low-income individuals and families.
As part of Affordable Care Act, states could expand the Medicaid eligibility guidelines, set to begin in 2014. The law was written where most U.S. citizens under 65 with family incomes up to 133 percent of the federal poverty level would be eligible for coverage. A family of four with an income below $31,000 could now qualify for Medicaid coverage and the state which they lived in would pick up the entire cost. However, as part of the Affordable Care Act, the federal government would cover the entire cost of the expanded Medicaid for three years and then would drop down to 90 percent after the time frame, with states would be responsible for the 10 percent.
Under current Medicaid guidelines, the requirements to receive coverage are quite strict, but under the expansion two groups would now qualify for coverage. The first group is parents who have no children. Currently, more than 40 states bar these people regardless of their income level from Medicaid ranks. The other group is people who do meet the income requirements; the children do qualify but the parents do not. There are about 30 states that block this group of people from being covered under Medicaid. To clarify this last point, a single parent makes $20,000 a year, which is less than the 133 percent of the poverty level chart and has one child. The child would be eligible but the parent would not receive coverage even though they were qualifying from his or her income.
As of March, the country has been split 50-50. About fifty percent of the states are electing to expand their Medicaid coverage and the other 50 percent are not; North Carolina decline to expand. Many people argue the states who are not offering expanded Medicaid coverage are playing a political game with the Obama administration. I believe each state has reviewed its current Medicaid obligations and made a fiscal decision based on economic conditions.
In the case of North Carolina, the state spent about $14 billion on Medicaid and the federal government covered about $11 billion of that bill. The state was still responsible for about $3 billion on Medicaid last year. If North Carolina elected to expand Medicaid coverage, there could be an additional 500,000 to 600,000 residents who would be added to the current Medicaid rolls. The question has not been completely answered, but what would it cost to add these residents to Medicaid? There are no set numbers, but I have seen $1 billion, $2 billion through 2020. While the federal government would pay that for the next three years, there are a number of questions remaining about the federal government continuing to pay 90 percent of cost in future years, especially into 2020.
Next week, I will be writing the final article on the series about the Affordable Care Act. I will offer my professional opinion on the value of the overall plan.
Darek Hunt, a Lumberton resident, has his master’s degree in Public Policy and Administration and is a doctoral student in Health Sciences. He specializes in health care administration and health policy.