Lost among reports of the difficulties of the Affordable Care Act’s health insurance exchanges is the news that President Obama’s health insurance reform law is actually making it harder for the very poor to get insurance coverage. The architecture of the law and the Supreme Court’s 2012 decision that struck down a portion of the Affordable Care Act have combined to create a gap for low income Americans that deprives them of Obamacare’s health insurance subsidies as well as no-cost coverage under Medicaid.
Danielle Morgan, the 23-year-old married mother of four in North Carolina, is one of those affected. Danielle’s husband is a full-time Bible college student with no income. Danielle told Examiner that she works to support their family, but her employer does not offer health insurance. The family has not had health insurance in the past, but Danielle was hopeful that the new health insurance marketplaces would allow her to purchase an affordable policy for her family and avoid Obamacare’s fine.
Even though Danielle is employed, President Obama unilaterally delayed the portion of Obamacare that requires employers to provide their employees with health insurance. The employer mandate will only apply to companies with more than 50 employees when it goes into effect in 2015.
The problem of insuring low income workers is made worse because Obamacare bans the “mini-med” policies that cover an estimated 1.4 million Americans according to an estimate by Politico. These plans were used by many employers, such as McDonald’s, to provide low-cost health coverage for low-income workers who cannot afford to pay their share of a traditional health insurance plan. Because the plans have annual limits for payouts and do not provide the federal minimum essential coverage, they do not qualify as health insurance under the Affordable Care Act. Many workers formerly insured by “mini-med” plans will likely become uninsured unless new “skinny” plans can be designed that meet the requirements of the law.
After several attempts at logging on the exchange, Danielle finally went to Kaiser’s online premium and subsidy calculator. What she found shocked and dismayed her. The premium for her family would be $5,711 per month for a Bronze plan. She also found out that her family would not qualify for a subsidy even though they are below the poverty line.
Danielle and her family fell into a gap created when the Supreme Court struck down Obamacare’s mandatory Medicaid expansion. In the 2012 ruling, the Court held that the federal government could not force the states to expand Medicaid to low income families. If states voluntarily expanded their Medicaid programs, the federal government promised to pay the full cost for three years and 90 percent thereafter. Twenty-five states, including North Carolina and Georgia, chose not to join the Medicare expansion. .
The Winston-Salem Journal estimated on Oct. 19 that as many as 300,000 North Carolinians under the poverty line may be affected by this Medicaid gap. Bloomberg, also on Oct. 19, noted that the number of Americans affected by the gap is estimated at 5.2 million nationwide.
According to the News Observer, North Carolina officials cited the cost of Medicare as well as systemic problems such as cost overruns and billing delays in rejecting the growth of the program. North Carolina’s Medicaid program cost $14 billion last year. The state’s portion was $3 billion, which represented about 15 percent of the state’s budget according to the North Carolina Department of Health and Human Services. In Georgia, Medicaid spending also makes up 15 percent of the state budget according to Georgia Health News.
“So much of our state revenue has been eaten away by the Medicaid budget,” said Justin Burr, a Republican member of North Carolina’s House health care committee. “I certainly don’t think we need to expand an entitlement program.”
The ability of the federal government to honor its promise to pay its share of new Medicaid costs is also in question. The federal government has been operating at a budget deficit for years. As the federal debt mounted during Barack Obama’s administration, congressional battles over spending have become increasingly frequent and acrimonious. In the final analysis, increased spending for the Medicaid expansion may force tax increases at both the state and federal level.
Since the unveiling of the Affordable Care Act’s health insurance exchanges on Oct. 1, many Americans have experienced cases of sticker shock. Even many Americans who qualify for federal subsidies have found that premiums are much higher than expected. Both CNN and the Fiscal Times list high prices among the top complains about Obamacare. In many cases, deductibles and out-of-pocket expenses are higher as well.
Danielle, who has a minor heart problem, says that she has not had health insurance in her adult life. She was worried about having to choose between paying the Obamacare fine and finding money for the health insurance premium for her family. There at least, there is some relief. Due to her family’s low income, she is exempt from the fine even though she will remain uninsured.
“It would be great to get coverage for just basic family doctor care at a reasonable price, Danielle said. “It just doesn’t make since to pay almost six grand for one or two visits a year with the cash price being a fraction of that.”