by David Ramsey
We’ve written a number of times about the ugly situation that would occur if Medicaid expansion doesn’t happen: folks that make between 100 and 400 percent of the federal poverty level will be getting government subsidies to buy health insurance, but folks below 100 percent of FPL that don’t qualify for Arkansas’s stingy Medicaid program will be left out in the cold. Here’s a picture of what that looks like — public money going to more affluent folks while our neediest citizens go without coverage.
When asked about the people in this hole of coverage at the legislative preview last Monday, Senate President Michael Lamoureux (R-Russellville) caused a little bit of confusion among followers of the healthcare law when he responded, “We’ve heard presentations that say that that group could be eligible for a full federal subsidy…to buy health insurance for premiums as low as $29 a month.”
In fact, to reiterate, there are no federal subsidies for people making less than 100 percent of the federal poverty level. Just to be sure, I spoke with Cynthia Crone, director of the state exchange (the regulated marketplace where subsidized insurance will be sold) and she confirmed that nothing has changed on this front.
I spoke with Lamoureux and it turns out that he actually intended to refer to people that make between 100 and 138 percent of FPL. And on this, he’s right — people in that narrow category will be heavily subsidized on the exchange if Medicaid is not available to them. If Arkansas decides to expand Medicaid, anyone making up to 138 percent of FPL will be covered (including, of course, the group between 100 and 138). If Arkansas decides NOT to expand Medicaid, the 100-138 group won’t get Medicaid, but they will be eligible for subsidies, which will lead to relatively affordable premiums. For example, with no expansion, an individual making 138 percent of FPL (a little more than $15,000 a year) would pay $26 per month out of pocket for a subsidized health-insurance plan bought on the exchange.
However, Lamoureux was under the impression that this was the core group under discussion, the oft-mentioned “250,000 people.”
When I explained that in fact the majority of uninsured folks who would gain eligibility with expansion fell below 100 percent of FPL — that the group of people that would be stuck in a “hole” without coverage or subsidies amounted to more than 160,000 folks if the state doesn’t expand Medicaid, Lamoureux agreed that that would leave us with an ethically problematic result.
“If we’re subsidizing people that are making more money and not people that are making less,” he said, “I agree that’s not a good situation.”
He added, “I was not aware that that was that sizable of a number in that category.”
Let’s take a minute to clarify the numbers. Hopefully that can help to avoid confusion in the debate going forward. The latest study from the Urban Institute projects that there are about 218,000 Arkansans who would be newly eligible for Medicaid if we go forward with expansion.
51,000 of those fall between 100 and 138 percent of FPL. If we don’t expand Medicaid, they will be eligible to buy heavily subsidized insurance on the exchange.
167,000 of those people make less than 100 percent of the FPL. If we don't expand Medicaid, these people are out of luck, even as people making all the way up to 400 percent of FPL ($44,600 for an individual) get government help.
And what about that 250,000 figure? That's the DHS projection of the total number of people that would be added to the Medicaid rolls with expansion. They project 215,000 newly eligible, just a tad under the Urban Institute's estimate. They also project that 35,000 people that are already eligible (25,000 adults plus 10,000 kids) for Medicaid but haven't signed up would end up enrolling because of the publicity about the Medicaid program associated with expansion.