One of the key provisions of the Affordable Care Act was the expansion of Medicaid to more low-income families throughout the country. Right now, families who earn up to 138 percent of the federal poverty line in states that opted to expand Medicaid can enroll in the program. This year, the federal poverty limit for a family of three is $20,090, which means that that same family can earn up to $27,724.20 and still qualify for Medicaid under the new guidelines. By signing up for the program, they gain access to a host of benefits and features that they weren’t able to enjoy before. According to a report issued by the White House Council of Economic Advisers, Medicaid expansion also saves the country a lot of money.
Lowering the Cost of Care
Having access to medical care greatly reduces long-term costs not only for individuals and families but for the country as a whole. The government report on Medicaid expansion points out that people who sign up for the program will see less catastrophic out-of-pocket costs, which are defined as costs that exceed 30 percent of a family’s annual income. In fact, Medicaid enrollees are 4.5 percent less likely to have to deal with these costs than they would be if they had no insurance.
More important, millions of people now have the ability to pay their medical bills without taking out a loan or applying for credit thanks to Medicaid expansion. One of the top financial issues in the country is unpaid medical bills, which often lead to bankruptcy. By giving people access to better preventive healthcare, Medicaid expansion helps reduce the impact of unpaid medical bills.
Preventive care is the best way to nip problems in the bud, and Medicaid allows people to receive more preventive diagnostic services such as mammograms, pap smears and cholesterol checks. These services help doctors treat issues early, which can effectively reduce the chance for long-term problems to develop. In other words, when people can take care of themselves by getting proper preventive care, they stand a better chance of paying less overall for healthcare. The long-term advantage is lower healthcare costs for all Americans.
The ACA allows states to opt out of expansion, and so far, about 22 states have chosen to keep their existing programs in place.
Largely headed by Republican governments, the states that declined expansion are missing out on some of the advantages of increased Medicaid enrollment. Some low-income residents of these states are stuck in limbo when it comes to buying health insurance. They can’t afford to buy coverage, but they don’t qualify for federal assistance.
In the 28 states that have expanded Medicaid, along with those in the District of Columbia, millions of new low-income families have joined the ranks of the insured. According to the Centers for Medicare & Medicaid Services, about 12.2 million people have signed up for the Medicaid and Children’s Health Insurance Programs since October 2013. The CMS keeps tabs on enrollment numbers and breaks down the figures month by month in routine reports.
It’s not clear how many states will jump on board the Medicaid expansion bandwagon over the next five years as the ACA continues to implement its provisions across the country. Montana has already submitted a proposal to expand its program while several states continue to debate the issue. Despite many states’ unwillingness to expand Medicaid, estimates indicate that expansion would benefit millions of additional low-income families. In Utah, for example, the cost of uncompensated care would drop by $70 million if the state were to expand Medicaid. By not expanding the program, Utah is giving up about $240 million in federal funding.
The federal government is offering 100 percent support for Medicaid costs through 2016. Each year after, federal cost assistance drops slightly until 2020. At that point, the government will offer 90 percent funding, which still represents a significant portion of the program’s benefits and features. If states take advantage of the expansion, they could notice improved economies and healthier populations.