February 1, 2016

GUEST ROOM | Obamacare and the Bureaucracy Of Medicaid Expansion: What Happens Next?

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As the Democrat and Republican candidates are getting closer to their race for the White House, one of the main curiosities of the general public is about the Patient Protection and Affordable Care Act (ACA). Thanks to the ACA (popularly know as the Obamacare), for the first time in the history of the US, the uninsured rate among U.S. adults aged 18 and older has dropped to 11.6 percent in the third quarter of 2015. The uninsured rate has declined 5.5 percentage points since the fourth quarter of 2013. Under the ACA, the income limit for Medicaid eligibility has increased to 138 percent of the federal poverty level in 2014 for all people. Many poor adults who were ineligible before can now qualify for Medicaid.

However, Medicaid expansion under ACA is optional. According to the Kaiser Family Foundation, 31 blue states have adopted the new Medicaid expansion. There are 19 states currently that are refusing to expand Medicaid. Ironically, these are the states where many of the insured people live. They are turning down billions of dollars of new funds from the federal government that would improve the health of the currently uninsured people in their states.

In states where Medicaid has not expanded, people whose income is less than the federal poverty guidelines are ineligible for Medicaid and subsidized private health insurance on the exchange. For instance, in Virginia, individuals earning less than $11,670 fail to qualify for subsidies to buy insurance under the ACA exchange and the state’s existing Medicaid program. The problem is that the federal government cannot force states to expand their Medicaid program.

The Federal government is going to fund 100 percent of the costs of newly eligible Medicaid enrollees for the first three years (i.e. 2014-2016). Beginning in 2017, it will pay 90 percent and states are expected to bear the remaining 10 percent cost thereafter. Even though the Supreme Court has made the Medicaid expansion optional, there is no rationale behind turning down such a huge amount of money from the federal government other than political affiliations of the states, at least for the first three years. No surprises, the states that have turned down the money are primarily Republican states.

In an article in the Cornell Chronicle, Sean Nicholson, professor of policy analysis and management at Cornell University said, “Over the next few years, most of the states that currently are choosing not to expand Medicaid coverage under the ACA will reverse course and will decide to expand coverage.”

According to the New York Times, the 31 states that are expanding Medicaid under the ACA have experienced the largest reduction in the uninsured rate. With time, we will know if more states will actually expand their Medicaid program. We will also have to wait to see what happens to the ACA if the Rrepublicans win the race for the White House. For now, the ACA has shown hope to millions of Americans including the poor and minorities for a better health care system where many people have access to health insurance.

Sagar Chapagain is a junior at the College of Agriculture and Life Sciences. He can be reached at sc2595@cornell.edu. 

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