[ Health Care Reform ] element of the process is to ensure the individual receives all subsidies available. Some states have elected to set up their own health insurance exchanges while others rely on the federal exchange at healthcare.gov. Still others are operating a hybrid version of the two options. States that run their own exchanges have more control over which insurance policies are offered, including whether abortion services are permitted. Medicaid Expansion Prior to the passage of the ACA, Medicaid was a federal-state cooperative program that varied greatly from state to state. The federal government pays states for a specified percentage of program expenditures, called the Federal Medical Assistance Percentage (FMAP), which varies by state based primarily on per capita income. The average state FMAP is 57 percent, but it ranges from 50 percent in more wealthy states to 75 percent in states with a lower per capita income. In general, coverage has been limited to pregnant women with an income below 133 percent of the poverty level; children under 6 in families with income 133 percent of the poverty level or children ages 6to 18 in families with income below 100 percent of the poverty level; and elderly or disabled adults who qualify for Supplemental Security Income benefits. Many children with disabilities, including more than half of all children diagnosed with autism, are eligible and on Medicaid through a special waiver program. In some instances, parents of children covered can become eligible, but, in most states, it was nearly impossible for a childless adult to be eligible, regardless of income. Essentially, the program was used for to provide health care for low-income pregnant women, children of low-income families, and socalled “dual eligibles” – those on Medicare who were deemed too poor to pay for Medicare’s premiums, deductibles, and co-payments. Often, the latter are in nursing homes. Medicaid pays over 60 percent of the nursing home care in America. The original ACA law required states to expand Medicaid to all individuals under age 65 with incomes below 133 percent of the poverty level. Under the plan, the federal government would pick up the tab for the estimated 20 million new enrollees until 2017 and then pay 90 percent of the funds thereafter. This provision was the second main point argued in the ACA case before the Supreme Court. The court voted 7-2 that the provision was unconstitutional, but said the problem could be remedied as long as the expansion requirement only affected new funding and not the previous funding.
2011 Poverty Guidelines Family Poverty Size
133% of Poverty
400% of Poverty
1
$10,890
$14,483.70
$43,560
3
$18,530
$24,644.90
$74,120
For larger families, add $3,820 for each additional person
“Under the spending clause, the federal government can set conditions on money, they do that all the time,” said Christopher J. Walker, professor at Moritz. “But, the court held in the ACA decision that the federal government cannot do so retroactively to a program that is already set up. The federal government cannot go back and dramatically change the terms and require states to do a lot more without violating fundamental federalism principles.” Twenty-five states are expanding coverage, 21 are not, and four are still deciding. For those states not expanding Medicaid, citizens who make less than 133 percent of the poverty line but are not eligible under the traditional eligibility rules will fall under the individual mandate. They will have significant subsidies available to them, but some may be excluded from the mandate because any policy available to them still may be deemed too expensive. Individuals are excluded from the mandate if the least expensive policy available in the exchange costs more than 8 percent of their
“The problem here is that it is actually fairly easy to make sure that you do not have a refund and it makes enforcement of the penalty difficult and potentially inequitable.” – Donald B. Tobin, the Frank E. and Virginia H. Bazler Designated Professor in Business Law
Moritz College of Law | W I N T E R 2 0 1 4
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