With the average American now spending nearly $10,000 a year on healthcare, it's essential to understand your eligibility for Medicaid and health care credits. As the healthcare system becomes increasingly complicated, it can be frustrating to navigate the labyrinth of premiums and schedules. Getting to know your Medicaid eligibility can help ensure that you keep costs low while getting the care you need.
Having health insurance brings peace of mind. For people who are struggling to make ends meet, Medicaid ensures that no emergency will leave your life turned upside down. Medicaid is a way for people of all ages to have access to preventative and emergency care.
If you're new to Medicaid or having trouble understanding the changes made to the system here is an overview of what you should know.
State By State Changes
With the Affordable Care Act, dozens of states were able to offer Medicaid to more people. For the 11 million people who earn less than 140% of the federal poverty level, this was a godsend. With recent changes, the expansion would be cut but anyone already covered would continue to have coverage.
If something like the AHCA plan passes, it will also change how states get paid for Medicaid. The formula that currently calculates how states are paid for Medicaid costs will be capped. There will be two different amounts that break up treatment into two categories.
There is a larger number allotted to children, people with disabilities and the elderly and less offered to anyone deemed "able to work".
An Enrollment Freeze
With changes like what was proposed in the AHCA, qualified Medicaid applicants get to keep coverage for the time being. Starting in 2020, enrollment freezes and new people would not be able to sign up for Medicaid.
Medicaid eligibility would be null for a number of people at a certain point, as there will be a cap on state funding. Where there was open-ended entitlement under the ACA, that will be dismantled by something like the AHCA.
This could leave a lot of people in need locked out of the system. It's important to sign up as soon as possible if you think you're eligible.
Cuts to Medicaid Funding
There are estimates saying that over the next 10 years, changes proposed in something akin to the AHCA could cut state funding as much as $370 billion. While states can generate as much as they want to make up that difference, the fact is that most won't be able to.
This is why it's estimated so many people will lose coverage. As the amount of money provided by the federal government goes down, states will have to make qualifications much stricter or go into debt. Those who are cut from Medicaid eligibility will be faced with premiums that might be out of their budget.
If the people cut from Medicaid can't afford the high premiums, they'll likely go without insurance altogether. This could lead to further debt for states as they pay for emergency medical care for people going in for non-emergency issues.
States Are Preparing
States with more robust economies like California and New York will be able to continue to offer Medicaid without too many cutbacks. States that produce a lower budget surplus will struggle to cover their current enrollment, let alone an kind of expansion.
If more states repeal their expansion as has been proposed under the AHCA, 3 million or more people would lose Medicaid, regardless of eligibility. We could also see states introducing the caveat disallowing anyone from re-registering for Medicaid eligibility if they are ineligible for over 60 days.
Personal Income Hurdles
The AHCA proposed denying coverage to anyone who has hit two months of ineligibility. We could see this become a standard approach for future legislation.
While families struggle to make money, they may see two consecutive months that put them above the limits for eligibility. With the future of employment in flux and the gig economy becoming a way of life, many people will have several good months followed by a few bad ones.
The fact that this could disqualify families for Medicaid is unfortunate news for many families. And given the federal cuts set to come starting in 2020, the limits are going to become more rigid.
Current figures state that for all of those currently qualified, less than half qualify for the entire year. This could be a shock to the economy of several states that would then have to find other ways to cover healthcare costs of their uninsured.
With the changes that have been proposed in the AHCA, states have a per-person cap based on the consumer price index. The CPI figure is based on spending on healthcare that comes out of pocket.
The only issue is that the CPI isn't growing at the same pace as Medicaid needs are. This could mean that federal subsidies will cover far less than they need.
These changes could lead to problematic issues where older seniors who need care get dropped in favor of younger people with fewer medical needs. The future of state caps could go in many directions but none of the options look appealing to current enrollees.
The Reason For Changes
Medicaid is quite often cited as the largest chunk of most state budgets. While there are claims of abuse and fraud to the system, the charges are often misdirected. Those committing fraud in the system are less likely to be enrollees as they are to be medical providers, pharmacists, and doctors.
The belief of lawmakers is that by providing a finite amount of funding for Medicate to states, they will be able to eliminate fraud. Their hope is that any able-bodied people will be encouraged to seek jobs with benefits if they have difficulty qualifying for government-subsidized insurance programs.
Medicaid Eligibility Will Change The Foundation Of Healthcare
The healthcare industry bases their budgets and pricing around the kinds of federal subsidies currently offered by Medicaid and Medicare. Major changes could disrupt peoples' lives and shake up unstable state economies. If you think you're eligible now, sign up as soon as possible.
As stated above, changes coming in 2020 could keep you from being able to sign up in the future.
If you're still deciding on your medical coverage, contact us to find out the best set up for you and your family.
Pete is the Vice President of Sales & Client Services at DECO Recovery Management. He covers the Mid Atlantic region and specializes in Medicaid related topics. It is DECO’s Mission to maximize reimbursement to our clients by leveraging innovative technology, processes and compassionate advocates to provide exemplary service.