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Medicaid expansions

Posted by: Ron Pollack, Executive Director of Families USA on Sep 21, 2009

The Medicaid expansion contained in the various health reform bills is a key and laudable component of expanding health care coverage. It makes abundant sense to establish a nationwide Medicaid eligibility floor of 133 percent of the federal poverty level - eligibility that would cover three-person families, as an example, with annual incomes below $24,352.  

Today, in half the states, parents in three-person households earning more than $12,268 a year are considered "too rich" to qualify for Medicaid. The proposed expansion will not only help the very low-income parents, but it will help their children as well: Expanding Medicaid will allow all poor parents to get health coverage in the same health plan as their children, thereby increasing the likelihood that children will be enrolled in coverage they may be eligible for but are not receiving today.

For adults without dependent children, this Medicaid expansion is at least as significant. In 42 states, those non-parental adults are currently ineligible for Medicaid even if they are penniless. For the first time, therefore, health care reform will ensure that the Medicaid health safety net applies to all poor Americans.

While the bills are on the right track, there are some key issues that need to be resolved to ensure that the poorest of the poor truly receive the coverage and care that they need.

One key issue is timing: When will the Medicaid improvements be implemented? The bill to be considered by the Finance Committee delays that implementation until 2014 - later than the other coverage expansions. It makes little sense to isolate the poor for later help, both because they need such help the most and because it leaves the critical Medicaid expansion more vulnerable to further delay or possible evisceration.   

Those in Medicaid are most in need of adequate coverage. The Finance Committee proposal, however, provides coverage at the "bronze" level, thereby providing newly eligible low-income Medicaid enrollees with the least generous coverage contemplated in the bill, and less than is guaranteed to those with higher incomes who get coverage through exchanges. This inequity should be corrected.

Medicaid payment levels to primary care physicians also need to be improved so that Medicaid enrollees have a realistic opportunity to secure treatment from health providers. The House and Senate HELP Committee bills include a provision that would increase reimbursement rates for primary care services delivered by physicians serving Medicaid patients. This provision is key to making sure that a Medicaid card is not an empty promise.

Finally, the federal government - not the states - should take responsibility for the additional costs of this new coverage expansion. States have struggled with the costs of Medicaid for many years. If the expansion requires states to pay significant amounts, it is predictable that they will seek savings in other ways, by cutting benefits, reducing provider rates, and inhibiting outreach and enrollment - thereby leaving many new eligible people without the coverage and access to care that Congress had laudably enacted.

For health reform to be successful, it needs to build a strong, solid foundation of coverage for the lowest-income Americans, and strengthening Medicaid is essential towards that end.

This post is cross-posted on the National Journal's Expert Blog on Health Care.