Current ACA Medicaid: A Quick Guide–Poverty, Children, Disabled and Seniors

Medicaid, Poverty, Children, the Disabled, and Seniors               March 7, 2017

Before examining the proposed changes to Medicaid, here are quick facts about Medicaid as it now exists under the ACA (Affordable Care Act aka Obamacare). And, a cautionary tale.

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In 2003 I read a small “Around the States” in a national newspaper, whose name I have now forgotten.  What I have not forgotten was the story.  Mississippi was going to cut 13,000 Medicaid nursing home beds to balance the state budget.

I called the Governor’s office to verify this. It was true. There were fights back and forth between the Governor and the Legislature. Eventually those cuts were not made.  The fact it was even considered is chilling.

Medicaid is the nation’s largest insurer. About 20% of all Americans are on Medicaid—over 70 million Americans. Medicaid was designed to provide health care coverage for those who cannot afford regular health insurance as well as poor seniors, the blind and the disabled.

Here are some quick facts about the existing  ACA Medicaid program.

Enrollment by Group:

  • Three-quarters of nonelderly Medicaid enrollees are in working families for 1/3 of the costs
    • Children make up about half of all Medicaid enrollees (48%)
    • Non-elderly low income, childless adults make up one-quarter (27%)
  •  Seniors and people with disabilities make up about one-quarter, but 2/3 of the costs
    • Seniors (9%)
    • Disabled (15%)

Medicaid is complicated.  Governments always talk in tongues when trying to describe Medicaid eligibility which makes it nearly indecipherable to the lay reader: “percent of poverty” for example, means income levels. “Categorical’ funding” means groups that are covered, such as low income children, seniors, and the disabled.

Under the ACA Medicaid expansion childless low income adults became eligible for Medicaid for the first time if they met income requirements.  This meant that men could be eligible for Medicaid for the first time.

Briefly, here are some of the key issues:

Income and Assets:

  • Financial Eligibility:
    1. Medicaid is based on Federal Poverty Levels and on specific categories.
    2. Poverty is defined in terms such as “100% of poverty.” People at or below 100% are eligible. In 2017, 100% of poverty is an annual income at or less than $11,880/year. For more about income eligibility and poverty see: https://liheapch.acf.hhs.gov/news/july16/FPG.htm
    3. States may increase income eligibility but they may not lower income eligibility.
    4. Seniors are eligible for Medicaid if they meet Medicaid’s income and assets test. Often this means individuals divest themselves (spend down) family assets in order to qualify for Medicaid long-term nursing home care.
      1. Long-term nursing home care is not covered by Medicare. It is only covered with long-term care insurance, personal funds or Medicaid. Costs can range from $5,000 to $7,000 a month. Sometimes more.

Who Is on Medicaid:

  • Two thirds are children in poor families or in foster homes and the working poor with incomes at or less than $11, 880/year now including childless low income adults
  • One third are seniors in nursing homes and the disabled
  • Undocumented workers cannot receive Medicaid

Where the Money Goes:

  • One third of the costs are for children and low income individuals
  • Two-thirds of the costs are for long-term care for seniors and the disabled in nursing homes and other long-term care facilities, such as Adult Family Homes.

State and Federal Funding of Medicaid: 

  • Federal funds accounts for about 57% of all Medicaid spending
  • The ACA Medicaid expansion added childless adults with a 100% federal match for that group. This increased the federal match to over 60%, beginning in 2014
  • The federal funds for Medicaid come from general US tax revenue
  • The State share of Medicaid is at least 40%. Of that 40% up to 60% may come from local city and county governments.  In 2012, nearly 70% came from general state revenues with the balance coming from   local governments; 10% came from health care related taxes and the balance from other sources.

ACA  Medicaid Expansion :

  • Thirty one (31) states expanded Medicaid and increased income eligibility to 138% of the  poverty level, or roughly $16,395 annual income for an individual
  • Childless adults were eligible for Medicaid for the first time, many of whom were men who were not eligible before
  • This new group with its100% federal match increased the federal share of Medicaid to over 60 percent
  • Nearly one-half of the uninsured— nearly 10 million people—became insured with the ACA’s Medicaid expansion, nearly half were young adults

Republican Proposal:

  • States have greater independence in decision making about use of funds
  • The 31 states that expanded Medicaid can keep that expansion until 2020
  • States that have not expanded Medicaid may do so until 2020
  • States will receive a flat fee person based on per person costs in 2016, regardless of age. States will determine how the money is allocated
  • $100 billion goes to the states for  help with high risk insurance pools

Early Questions and My Concerns:

  • What will be impact be of a flat fee per person when current spending varies by age, income or disability?
    • Two thirds of Medicaid spending is for low income seniors and disabled who are in nursing homes or adult family homes. One third of those eligible for Medicaid are seniors or disabled
    • Two thirds of the people on Medicaid are children and low income adults. One-third of Medicaid spending is for this group
  • Could greater state control of eligibility and spending lead to budget reductions/caps for specific groups, such as cuts for seniors that Mississippi considered?
  • If the poverty level is $11,880/year who or where can someone live on $12,500/year which is above the federal poverty level?
  • How will changes in Medicaid affect the uninsured?
    • Half of the uninsured who gained insurance under the ACA gained insurance through Medicaid expansion
  • What happens in the geographic areas where there are large pockets where there are few or no jobs or where occupations/industries that no longer exist, such as timber and coal or are largely automated, such as manufacturing?
    • Are residents all below the $11,880 income level?
    • Will childless adults still be eligible for Medicaid since they were added under the ACA Medicaid expansion?
  • The per person allotments to the states is based on their 2016 spending. How will that impact coverage if decisions have to be made between eligible groups?

Copyright (c) Kathleen O’Connor, March 7. 2017

For General Information on Medicaid as it currently exists see:

References and Quick Guides to Current Medicaid

Medicaid Quick Facts:  http://kff.org/medicaid/fact-sheet/medicaid-pocket-primer 

Medicaid 101:  https://www.macpac.gov/medicaid-101/

Coming Next:  Republican Proposals for Medicaid

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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