Healthcare Reform Update: Medicaid Expansion and Premium Subsidies
The Affordable Care Act (“ACA”) expands Medicaid eligibility to individuals and families with income up to 133% of the Federal Poverty Level (“FPL”). Each state has decided to adopt or not adopt the expansion of the Medicaid eligibility. If a state has adopted the Medicaid eligibility expansion (see below for examples of two States’ decisions), individuals between ages 19 and 64 with household incomes up to 133% of the federal poverty level generally will be eligible for Medicaid in that state.
New Jersey: Gov. Chris Christie (R) in his Feb. 26 budget address announced that New Jersey will participate in the Medicaid expansion. The ACA provision regarding Medicaid Expansion is expected to extend Medicaid coverage to approximately 300,000 uninsured New Jersey residents (Delli Santi, AP/San Francisco Chronicle, 2/26).
New York: Gov. Andrew Cuomo (D) in a statement posted on the NY Governor’s website, on June 28, 2012, stated that he was “pleased the Supreme Court upheld the [ACA]” and looks forward “to continuing to work together with the Obama administration to ensure accessible, quality care for all New Yorkers.” On July 26, Danielle Holahan—project director for New York’s health insurance exchange planning—said the state “largely meet[s] the federal required Medicaid levels already.” Although Cuomo’s office has not officially announced a decision, the Associated Press reported on Nov. 13 that New York will expand Medicaid (Office Gov. Cuomo release, 6/28; Grant, North Country Public Radio, 7/27; Delli Santi/Mulvihill, AP/San Francisco Chronicle, 11/13).
Before the states had the daunting task of deciding whether or not to adopt the Medicaid expansion, in June 2012, the U.S. Supreme Court issued its decision concerning the ACA provision on Medicaid expansion. As stated in The Kaiser Family, Focus on Healthcare Reform article, a majority of the Court found the ACA’s Medicaid expansion unconstitutionally coercive of states because states did not have adequate notice to voluntarily consent to this change in the Medicaid program, and all of a state’s existing federal Medicaid funds potentially were at risk for non-compliance. However, a different majority of the Court held that this issue was fully remedied by limiting the Health and Human Services (HHS) Secretary’s enforcement authority, thus leaving the Medicaid expansion (and all other ACA provisions) intact in the law. To read more on the U.S. Supreme Court decision, Click here.
Premium Subsidies
If an applicable taxpayer is eligible for Medicaid coverage, he or she is not eligible for a federal Exchange subsidy. In those states that have adopted the Medicaid expansion, it may be easier for employers to determine who is eligible for Medicaid and thus not eligible for a federal subsidy on the Exchange.
Only “applicable taxpayers” can qualify to obtain federal subsidies on the Exchange. An “applicable taxpayer” is a taxpayer whose household income for the taxable year is 100% to 400% of the poverty line for the taxpayer’s family size.
To find the Federal Poverty Level for your state, please visit the charts located on the Families USA website: Click here
Please stay tuned for more on the eligibility for a Federal Exchange subsidy next week…