Earlier this month, government officials with the White House Council of Economic Advisers released a report summarizing the benefits of Medicaid expansion, noting in particular the devastating effects of non-expansion in states that have opted out of the Affordable Care Act’s new provisions. Under the new healthcare law, the income cutoff to qualify for Medicaid has increased to 138 percent or below the federal poverty line. In 2015, the federal poverty limit for a family of three is $20,090 at 100 percent and $27,724.20 at 138 percent. Those families earning less than these amounts would qualify for Medicaid under the newly expanded guidelines.
In states like Utah, which have not expanded the federal health insurance program, citizens who just miss the cutoff have no recourse for purchasing medical coverage and will remain in a gray area of non-coverage unless state legislators adopt expansion. Despite the promising figures released by the Centers for Medicare & Medicaid Services or CMS, 22 states have yet to expand their Medicaid programs. It should be noted that Montana is currently working on a modified expansion program. The remaining 28 states as well as the District of Columbia have opened up their Medicaid prografms to more low-income residents, which has resulted in increased benefits in those states.
According to the report, “being enrolled in Medicaid reduced the probability of experiencing [catastrophic out-of-pocket costs] by 4.5 percentage points.” The government defines “catastrophic out-of-pocket costs” as totaling more than 30 percent of a person’s annual household income.
Enrolling in Medicaid also reduces the likelihood that a family will be unable to pay its medical bills. Unpaid medical bills are one of the leading causes of bankruptcy in the United States today. If every state opted to expand the Medicaid program, then certain areas of the country might see drastic improvements in their local economies. For example, Texas, which has decided against expansion, would see approximately 60,000 fewer people unable to pay their medical bills if they chose to expand Medicaid.
According to the CMS and the Department of Health and Human Services, approximately 12.2 million people have signed up for Medicaid and the Children’s Health Insurance Program since October 2013. This brings the total number of people that the CMS services to 100 million as of the 50th anniversary of Medicare and Medicaid. Established in 1965, Medicaid continues to offer taxpayer-supported health insurance to low-income families throughout the country. The ACA seeks to expand this program’s influence to accommodate more people.
Aside from the positive economic impact of expanding the Medicaid program, states that opt for expansion would enjoy benefits such as better insurance coverage, increased access to medical care, a higher standard of living and improved overall health. In Utah, for instance, expanding Medicaid would allow an additional 68,000 people to enroll in health insurance. Because Medicaid offers necessary preventive screenings at no cost to enrollees, people who sign up for the program would also see significant improvements in their health. Fewer medical problems would lower the financial burden of providing medical care statewide.
The government has offered substantial assistance to states that choose to expand their Medicaid programs. Federal funds will fully cover the cost of expansion through 2016. By 2020, federal support will be reduced to 90 percent, but this percentage still accommodates a large portion of the cost for administering Medicaid. Expanding the Medicaid program nationwide could have a long-lasting and positive benefit on the program’s beneficiaries and the country as a whole.