Pros and Cons
of Health Care Reform Blog

Jul 11

AMERICA’S HEALTH INSURANCE (Part 3) - THE AMERICAN HEALTH CARE ACT 2017 (AHCA)- The Winners and Losers: Medicaid/Medi-Cal

Posted by Dina Collins on Tuesday, July 11, 2017

Prior to the ACA, aka Obamacare, it was difficult in most states for those without children to get Medicaid, called Medi-Cal in California. A citizen needed at least one child and income between zero and 106% of the federal poverty level. For example, in 2013, a family of two would qualify if they earned $16,440 and under; a family of three by making $20,702 and under; a family of four earning $24,963 and under, and so on.

Post ACA, the House-approved American Health Care Act 2017 (AHCA) would increase the income level to 133% of the federal poverty level in most states regardless of how many children a taxpayer claims. So far, 32 states and the District of Columbia expanded Medicaid, including California, which extended Medi-Cal’s level to 138%. This income level would increase contingent on the number of dependents. A single person making $16,643 or less in California qualifies. A family of two, based on their tax return, would qualify if they make $22,411 and under; a family of three making $28,180 and under; a family of four at $33,948 and under, etc.

Although we are still awaiting the Senate’s plan as of midyear 2017, the House’s AHCA phases out expansion under the ACA until the end of 2019. Therefore, in 2020, those who already qualified would be grandfathered in and allowed to remain with their program. The bill also provides more flexibility to the states. Instead of a per-person payment for each Medicaid recipient, they could opt for a block grant that would provide a lump sum. Each state could then determine a set of eligibility rules, such as when a recipient would be excluded and premium costs. Under these more flexible rules and whether they opt for the block grant, states may add a requirement that a nondisabled adult work in order to access the benefits. Flexibility is also given to states to disenroll those who, for example, win big in a lottery or see their liquid assets loom large thanks to an inheritance. It also allows for a hardship exemption if, for example, a recipient’s income increases but they have pre-existing medical conditions and can’t afford their own coverage.

The winners of the House-approved AHCA? Those concerned with our national debt. The losers? Those who currently do not qualify for Medicaid but may later, perhaps. Why perhaps? Many people in their 30s and under with income not above the thresholds mentioned in Part 2 of this blog series might prefer having private insurance with the tax credit to being on Medicaid with its limited choice of doctors. Those with incomes teetering just above 106% of poverty level who are 50 and older, would likely prefer our current system. I say likely because, again, they may prefer private insurance with a tax credit, even if they have to pay a few hundred dollars a month for it. How can they afford it, you ask? I have many clients who have low income but high assets, so although they currently qualify for Medi-Cal, they would prefer private insurance with a tax credit.

Part 1 of this blog series can be found here.

Part 2 of this blog series can be found here.