Thanks, SCOTUS: The Perverse Outcomes of State Medicaid Exemptions

May 25th, 2013 at 10:53 am

As discussed here, because of the Supreme Court’s decision to allow states to opt out of the Medicaid expansion under health care reform, there’s a particularly weird accident going out to happen.

The refusal by about half the states to expand Medicaid will leave millions of poor people ineligible for government-subsidized health insurance under President Obama’s health care law even as many others with higher incomes receive federal subsidies to buy insurance.

More than half of all people without health insurance live in states that are not planning to expand Medicaid.

Some of those folks, even in states that don’t accept the Medicaid expansion, will get subsidized coverage in the new exchanges, which will ultimately be set up in all states (that part of the law was upheld by the court).  But since the law was written to provide Medicaid to the poorest of the uninsured and subsidies for private coverage for the rest (up to four times the poverty threshold), someone just below the poverty line in states that refused the expansion goes without while someone just above gets significant help paying for coverage.

Researchers at the Urban Institute estimate that 5.7 million uninsured adults with incomes below the poverty level could also gain coverage except that they live in states that are not expanding Medicaid.

See the figure below re who is covered and uncovered by current Medicaid eligibility rules.

The article notes that the Obama administration now has to worry about people blaming them for this outcome instead of “Republicans like Gov. Rick Perry of Texas and Gov. Bobby Jindal of Louisiana, who have resisted the expansion of Medicaid.”

Of course, the legislation could be tweaked to allow poor adults to get heavily subsidized coverage in the exchanges in states that rejected the Medicaid expansion, but that’s not going to happen anytime soon.

I can’t even recall the court’s rationale for this exclusion—something about coercion—and yes, a simple single-payer, Medicare-for-all, system could have avoided all of these moving parts.  But here we are, and we’ll have to see what comes of this.  Perhaps sick, poor people, the hospitals that have to provide them with uncompensated, emergency care, and everyone else whose premiums will go up to help make up the difference will pressure governors and legislatures to take up the expansion.  Or maybe poor families who need this coverage will relocate to states that provide it.

But beyond providing some natural variation for scholars to write public policy dissertations about, I see nothing good about this.




Source: Kaiser Family Foundation

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One comment in reply to "Thanks, SCOTUS: The Perverse Outcomes of State Medicaid Exemptions"

  1. Neildsmith says:

    Maybe some of those people will show up at the polls next time there is an election. I’m all for helping people, but as they say… The Lord helps those who help themselves. In this case they don’t even need to do all that much, just throw the conservative bums out of Congress. But if they can’t bring themselves to do the work, I’m not sure I’m obligated to give a hoot about their suffering.