By Phil Galewitz
Fri, Aug 16 2013
While millions of adults nationwide will gain Medicaid coverage next year under the federal health law, more than 150,000 people could lose their coverage in the state-federal health insurance program for the poor as four states reduce eligibility.
The states planning to make the cuts in January are Maine, Rhode Island, Wisconsin and Vermont. Most people losing access to Medicaid will be eligible for federal subsidies to help buy private coverage in the law’s online insurance marketplaces also starting in January, but advocates worry some will struggle to afford higher premiums and other cost-sharing expenses.
"It is sad that as we look to expand coverage to more people, we are taking a step backward and taking away coverage to a significant amount of low income adults," said Linda Katz, policy director with the Economic Progress Institute, a Providence, R.I.-based advocacy group.
Kaiser Health News collected enrollment data from the four states. The changes they plan still need federal approval, which is expected.
Rhode Island is expanding Medicaid under the health law's provision to cover all childless adults making up to 138 percent of the poverty level. That will add about 45,000 people to the program. These expansion costs are fully covered by the federal government through 2016 and then the state will pay a small portion but no more than 10 percent.
At the same time, though, Rhode Island is scaling back its Medicaid eligibility for parents of minor children from the current income threshold of 175 percent of the poverty level to 138 percent, affecting 6,700 people. They will be directed to shop for coverage on the state's insurance marketplace, also called an exchange.
Rhode Island, like other states, expects this shift to reduce state spending. That's because states split the cost of Medicaid with the federal government, which picks up about 57 percent of Medicaid spending. But the subsidies in the marketplace are funded totally by the federal government.
Meanwhile, in Maine, not everyone being cut from Medicaid will have access to the subsidies to buy private insurance.
About 10,000 childless adults in the state, a little less than a third of those losing Medicaid coverage, won't qualify for those federal subsidies because they have incomes below the poverty level, $11,490 for an individual. The health law makes those subsidies available only to people with incomes between the poverty level and four times that amount. The law was written that way because it was assumed all states would expand Medicaid eligibility to cover everyone with incomes up to 138 percent of the poverty level, but the Supreme Court last year made that provision optional. Only about half the states are expanding Medicaid for 2014. Many states led by Republicans have balked at expanding Medicaid, citing how spending for the program has outpaced inflation and even a modest increase in spending over the next decade could be difficult.