Obamacare’s Medicaid Expansion Shortfall Shuts Millions Out of Health Care


no-health-careRose Ruiz earns $8 an hour taking care of a 67-year-old diabetic on Medicaid in Austin, Tex. At an annualized rate of $16,640, she can’t afford to buy her own medical insurance. Her best shot at getting coverage was through the expansion of Medicaid mandated under the Affordable Care Act. But because of a U.S. Supreme Court decision that the law’s Democratic authors in Congress never anticipated, millions of low-wage workers who were supposed to be helped by Obamacare will probably end up without coverage.

Obamacare set aside billions of dollars for states to expand their Medicaid programs. Twenty-four of them, most led by Republican governors, have opted out since the Supreme Court ruled a year ago that states could choose not to participate in the expansion. That’s left their low-wage workers in a bind: They make too much to qualify for Medicaid in its present form, but too little to afford a plan their employer might offer. And they don’t earn enough to qualify for subsidies available to help the uninsured buy plans on the state-run Obamacare marketplaces opening in October. These subsidies are available to people with modest incomes-$24,000 to $94,000 for a family of four. Democrats in Congress who wrote the law figured anyone making less would get coverage through the Medicaid expansion.

States dictate the rates they pay companies for providing Medicaid services. The companies then decide the hourly wages they pay home-health aides like Ruiz, which average less than $10 an hour nationally, says William Dombi, vice president for law at the National Association for Home Care & Hospice. Many health aides in states that aren’t expanding Medicaid could need pay raises equal to triple their current wages or more to qualify for the Obamacare subsidies. “It’s one of those things that I’m sure nobody thought about when they were putting this together,” Dombi says.

The problem leaves employers with their own predicament. Those who don’t offer coverage face fines of as much as $3,000 per employee. Yet if an employer offers a new health plan for workers who can’t afford the existing one, and the new plan is deemed “affordable” under the law-meaning it would cost an employee no more than 9.5 percent of his income-then the employee becomes ineligible for Obamacare subsidies to buy a potentially cheaper plan offered through a state-run marketplace. “Lots of employers are really agonizing with the decision,” says Steve Wojcik, vice president for public policy at the National Business Group on Health, a lobbying group. They’ll now have more time to figure it out. On July 2, the Obama administration pushed back the penalties, set to take effect next year, to 2015.

The snafu might hurt low earners in Texas the most. The state has the highest rate of uninsured people in the U.S.; expanding Medicaid would have extended coverage to 1.5 million Texans by 2017, according to the state health department. Many home-health aides would have qualified, says Jennie Baird, president of the Texas Association for Home Care & Hospice in Austin.


{Matzav.com Newscenter}


  1. Texas is leaving billions of federal money on the table.
    A real conservative is also compassionate and pragmatic, like the Arizona governor in this matter.

  2. Buying into this system is setting things up for even bigger failure down the road.

    Grabbing as many federal dollars as possible without thinking of the long-term consequences…that’s not pragmatism. That’s greed and short-sightedness.