A Pickle for States Refusing the Medicaid Expansion

Great pickup by the Associated Press:

Governors who reject health insurance for the poor under the federal health care overhaul could wind up in a politically awkward position on immigration: A quirk in the law means some U.S. citizens would be forced to go without coverage, while legal immigrants residing in the same state could still get it.

It’s an unintended consequence of how last year’s Supreme Court decision changed the Medicaid provisions of President Barack Obama’s health care law.

Here’s what happened.

The Affordable Care Act covers most Americans making less than 138% of the poverty line through the Medicaid expansion. Because everyone thought the expansion would happen nationwide, they only wrote in subsidies for people making more than 100% of the poverty line. No one thought there would be a need for subsidies for people at the lowest earning levels because they would get Medicaid. Now there’s a problem – people making too little in states that refuse the expansion may not get subsidies, and therefore they may not be able to get insurance in the exchanges. They’ll be uninsured.

Things are different for legal immigrants*, though. Under currend Medicaid regulations, they have to live in the country for five years before they can qualify for Mediaid. The ACA did not change that policy, even though people tried to alter it. So immigrants still won’t be able to get Medicaid for five years, even in the future. In order to make sure that all legal citizens were covered, the ACA instead provides subsidies for legal immigrants to go get inurance in the exchanges, no matter how little they make.

So we’re going to have a potential situation next year where poor non-immigrants will get nothing in states that refuse the Medicaid expansion, but poor immigrants will get subsidies to buy private insurance in the exchanges. This is most likely to occur in conservative states, which are refusing the expansion. It’s hard to see this playing out well politically for them.

*Undocumented immigrants will still be unable to get insurance through the exchanges or Medicaid at all. This applies only to legal immigrants.

[Cross-posted at The Incidental Economist]

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