Don’t be fooled by a supposed alternative to Medicaid expansion some Republicans, including Gov. Paul LePage, are floating.
In a WGAN radio interview last month, the Republican governor said he would support legislation — if it existed — that provides Medicaid coverage to approximately 30,000 Maine adults without children whose incomes fall below the federal poverty level ($11,490 for a single person).
Anyone with a higher income, he reasoned, can and should enroll in subsidized, private insurance through the Affordable Care Act’s online insurance exchange, HealthCare.gov.
The problem — which LePage acknowledged — is that the Obama administration has made it clear to states that they can’t partially expand Medicaid and still qualify for the full expansion funding authorized in the federal health care law.
In other words, governors like LePage can’t stop the expansion at 100 percent of poverty; they have to expand it to everyone earning up to 138 percent of the poverty level (about $15,860 for a single person).
That reality, of course, isn’t stopping resistance to the common-sense Medicaid expansion. Rather, it gives cover to LePage and other Republican expansion opponents, who can claim they’re in favor of extending coverage if only the federal government would work with them.
Even without any expansion, Republicans often point out that about half of those in Maine who would be eligible for Medicaid if it were expanded can instead purchase steeply subsidized private insurance.
That’s true, but there’s a reason the Affordable Care Act extended Medicaid — and not private — coverage to all those earning up to 138 percent of the poverty level: Medicaid is more affordable than private insurance, both for the beneficiaries and the federal government.
Yes, under the Affordable Care Act, some low-income individuals can get heavily subsidized private insurance. But without expansion, no help is available at all for those with incomes below the poverty level. It’s a cruel loophole that wouldn’t even matter if all states expanded Medicaid.
By all accounts, a $9-a-month plan with a $200 deductible that limits all potential out-of-pocket expenses to $500 annually is a good deal. But consider who would be paying the bill: Hypothetically, a single person who earns about $13,000 a year. That’s about 113 percent of the poverty level, or about 29 hours a week at $8.50 an hour.
Once you figure in the cost of rent, heat and utilities (even when subsidized); food (what isn’t covered by food stamps); the expense of transportation in rural Maine; and state income tax liability, there’s little income to spare for a health plan that costs $108 a year with the potential for $500 more out of pocket. Imagine if this person wanted to enroll in a training program to improve his or her job prospects. Should she choose health insurance or education?
Health policy research consistently shows that out-of-pocket costs for a low-income person on private insurance are significantly higher than they would be for that person if he or she qualified for Medicaid. That doesn’t mean Medicaid provides a free ride: An Urban Institute study of Medicaid expenditures from 2003 to 2009 found Medicaid beneficiaries paid $257 out of pocket on average per year.
When health care costs are steep — or even perceived as costly — someone who can’t afford needed care to address a small problem is likely to put off treatment until the problem festers into something that’s more severe and more expensive to address.
The costs for private insurance under the Affordable Care Act are also steep for the federal government, whose $17 trillion debt is a prime concern for fiscal conservatives. In states like Maine that decline to expand Medicaid, the Congressional Budget Office projects that the federal government will end up spending $9,000 in 2022 to pay for private insurance for someone who would otherwise qualify for Medicaid. If the state simply expanded Medicaid, the federal government would spend $3,000 to insure that low-income person.
Essentially, LePage and Republican allies are touting a coverage expansion alternative that involves private insurance for those least likely to be able to pay for it, no help at all for those who can afford even less and higher costs for a federal government they claim is approaching insolvency.
That’s not a serious alternative.