Medicaid ‘coverage gap’ looming for the poor in 21 states

One month after undergoing a partial hysterectomy in 2011 to remove a rare form of ovarian cancer, Erika Neal of St. Louis got a double dose of more bad news: Her salary as deputy director of a nonprofit museum was being cut and her job-based health coverage was being eliminated.

Without insurance, she went more than a year without tests that would tell her whether the cancer had reappeared. Neal continued to work, however, and now relies on an emergency state program to pay for the quarterly tests.

But when the program ends in December, she won’t be able to afford the diagnostic tests because her salary has been cut by 75 percent since 2009. As an adult with no children, she’s also ineligible for Medicaid, the state-federal health plan for the poor and disabled.

With no options for coverage, Neal rightly fears for her life next year.

“I’m always praying, but in 2014, my prayers will be ever more fervent,” she said. “If the cancer comes back and it’s not detected, it’ll kill me. Most ovarian cancers, by the time you find out you have it, you just need to plan your funeral. So it’s a blessing they have a test for it, but I can’t get the tests if I don’t have health insurance.”

Neal could rest easier if she lived in one of the 23 states where Medicaid eligibility is being expanded for low-income parents and childless adults next year under the Affordable Care Act. Michigan appears close to expanding Medicaid eligibility.

But Missouri and 20 other Republican-led states aren’t participating in Obamacare’s Medicaid expansion, fearing the cost would require state budget cuts in other areas. The remaining states are still debating the expansion.

That leaves Neal and 5.5 million others in those 21 states to fend for themselves in the “coverage gap,” a bureaucratic twilight zone where people with poverty-level incomes don’t qualify for Medicaid and can’t get tax credits to help buy coverage on the new insurance marketplaces. Enrollment for them begins in October and they open in January.

With limited access to preventative care, many in the coverage gap with manageable chronic illnesses could end up seeking primary care services in hospital emergency rooms, where medical aid is costly and fleeting.

“If they fail to get an insurance card and don’t have ongoing adequate coverage, that’s how they’re going to continue to get care, in the most expensive, least efficient, least helpful way that they can,” said Ellen Kugler, executive director of the National Association of Urban Hospitals.

Gerald Friedman, a health care economist at the University of Massachusetts Amherst, summarized the options for those caught in the coverage gap.

“There’s no way they can afford individual coverage at that income level, so they’ll do what they do now, which is they go to the free care pools in the hospitals, they go to public health clinics, they borrow from friends, they go to free clinics,” Friedman said, “and they just get sicker and sicker.”

While the legislative, judicial and executive branches all had a hand in creating the coverage gap, it was not by design. It was an unintended consequence of the 2012 Supreme Court decision that upheld the Affordable Care Act.

The law was supposed to provide health insurance for most Americans next year by expanding Medicaid in all states to people earning up to 138 percent of the federal poverty level. That’s about $15,900 for an individual in 2013, or nearly $32,500 for a family of four.

Tax credits would then go to other low- and middle-income people to help them buy coverage on the insurance marketplaces. If the Medicaid expansion was implemented in every state as originally planned, an estimated 22.3 million Americans likely would have gained coverage next year, according to the Urban Institute, a nonpartisan social and economic policy think tank.

But when the Supreme Court ruled that states could opt out of the expansion, Republican-led states took advantage. Rather than expand their Medicaid programs, most kept their programs as is – open mainly to the poorest of the poor.

In 33 states, parents must now earn less than the federal poverty level – $19,530 for a family of three – to be eligible for Medicaid, according to the Kaiser Family Foundation, a nonpartisan health care research group. Eighteen of these states limit eligibility to parents in severe poverty, which is 50 percent of the federal poverty level or lower.

Georgia is one such state. An estimated 534,000 Georgia residents will fall into the coverage gap, according to the Urban Institute.

They include people like Ellen Wall, an unemployed nanny in the Atlanta area.

After developing a lung infection following a bout with the flu last year, Wall spent three days in the hospital recovering. Her $6,000 bill was more than she could hope to pay on her $13,000 annual income. With no children, Wall couldn’t get Medicaid in Georgia, so the hospital ended up footing most of her bill.

While she counts her blessings, the experience taught her that without a source of steady coverage, she’s one illness away from financial ruin. At a recent meeting of the Atlanta chapter of the National Domestic Workers Alliance, Wall was moved to tears as she discussed her situation.

“I got very sad talking about it because I realized that as a nanny, I work very, very hard,” she said of her time spent caring for children, who attend costly private school. “I’m loving and caring and trustworthy. I get the kids ready to go to school, but if the money gets tight, then all of a sudden, it’s the school or me and the school will win out and I’m stuck in between, without a job or health care.”

Like most states that have rejected the Medicaid expansion, Georgia officials have cited the cost as the biggest deterrent. But under the Affordable Care Act, the federal government has pledged to pay all medical costs for newly eligible Medicaid enrollees in 2014, 2015 and 2016 and no less than 90 percent of their costs thereafter.

Earlier this month, Health and Human Services Secretary Kathleen Sebelius was in Atlanta to promote Obamacare and to urge Georgia Gov. Nathan Deal to adopt the Medicaid expansion. Deal said he didn’t appreciate her efforts to sway public opinion.

“Instead of adjusting and accepting the Supreme Court opinion, it appears that the tactic is to try to intimidate states, which is exactly what the Supreme Court said that the federal act would not allow them to do,” Deal told reporters.

Some Republican lawmakers worry that President Barack Obama’s plan to pay for the new Medicaid enrollees could change or go by the wayside, like other provisions of the health care law that have been waived or postponed by the Obama administration.

Neal, of Missouri, isn’t buying that argument.

“In 28 years, the federal government has never missed a Medicaid payment to the state of Missouri, so the notion that the government won’t pay its share? The historical record does not bear that out,” Neal said.

In Georgia, state officials have said there aren’t enough caregivers to handle an expanded Medicaid population.

But that’s a false argument, said Cindy Zeldin, executive director of Georgians for a Healthy Future, a nonprofit group that advocates for access to affordable health care. She said that concerns about the cost and provider shortages would be mitigated by the boost in jobs and spending that the Medicaid expansion would create for the state economy.

“We are not bringing in new people from another state into Georgia,” Zeldin said. “We’re talking about Georgians who are already here, who already have health care needs, who are already sporadically using the safety net or hospitals seeking care only when it’s too late.”