Medicaid dilemma

July 6, 2012 

Is it an unintended consequence of health care reform or much ado about something that will work out when the dust clears? That is a not insignificant question for those poor people and families dependent upon Medicaid, the federal/state health care plan for the disadvantaged.

The U.S. Supreme Court may have upheld the foundation of President Obama’s reform, but it also ruled last week that states did not have to expand the number of adults in the Medicaid system, as would have been the case under reform. They can do so voluntarily, which is not likely to happen given the economic pinch many states still feel (particularly those in the South, where tremendous numbers of people depend on Medicaid).

In fact the fear is that some states will end up with fewer Medicaid beneficiaries in view of the court’s ruling that states can’t be penalized if they don’t expand their rolls to all those whose income was less than 133 percent of the federal poverty level. The requirement was part of Obama’s reform package.

So what will happen to those who cannot afford insurance? Well, if reform works in the sense that states will have new online “markets” where insurance will be offered and subsidies paid for the poor by the federal government, those who might be cut out of Medicaid could be covered by that option. The states would save money because they share in the costs of Medicaid, but the federal government would pay all of the subsidy for those who go into those online markets.

But what if someone is caught for a time between lost Medicaid coverage and new online, subsidized coverage? Therein lies a frightening rub that Congress (yes, that means House Republicans, too) should move to fix.

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