In just under an hour, the Legislature’s Health and Human Services committees will be holding a joint hearing on Medicaid expansion. Here’s a side note to that debate:
Last month, I wrote about a curious provision of the Patient Protection and Affordable Care Act: If South Dakota doesn’t expand Medicaid as the act calls for, the 48,000 adults who would have been eligible for Medicaid won’t be entirely out of luck. Around half — the less-poor half, with incomes from 100 to 138 percent of the federal poverty line — will be eligible for federal subsidies to purchase private health care on exchanges.
It’s only an issue because the U.S. Supreme Court ruled the all-but-mandatory Medicaid expansion in the ACA was unconstitutional. Had they not done that, Medicaid would have expanded to 138 percent of poverty for everyone, which would have taken precedence over the eligibility for the exchanges starting at 100 percent.
But today I see a fascinating article in Governing Magazine that this quirk is actually a drafting error. An early version of the legislation let people between 100 and 138 percent of poverty CHOOSE whether to enroll in Medicaid or the exchanges, an olive branch for Republicans. That provision was later scrapped, as no Republicans came on board with the act and the Medicaid expansion would have been somewhat cheaper for the federal budget. But while they removed the option, they didn’t catch the mistake 100 pages later where the eligibility levels for the exchanges were set.
This wouldn’t have mattered if the Supreme Court hadn’t made Medicaid expansion optional, but suddenly, we have what’s either a fallback position for millions of uninsured, or a crutch that minimizes the impact on states of not expanding Medicaid — depending on your perspective.
By making the Medicaid expansion optional, the Court exposed this obscure mistake that had been buried in 906 pages of legislation. And it created a huge loophole: In states that aren’t expanding Medicaid, those “in-betweeners” — residents who make between 100 and 138 percent of the poverty line — will now qualify for tax subsidies to buy private insurance instead.
“It was unintentional,” said one person who was involved in drafting the bill in the Senate. Like other sources interviewed for this story, this person spoke on condition of anonymity in order to speak candidly about the error and private deliberations around the ACA. “This strange confluence of events got us here. Nobody thought the Supreme Court would rule as it did,” the source said. “If the Medicaid expansion had occurred as we wrote it, then this wouldn’t have mattered. The number of turns in the plot was hard to anticipate.”
That little quirk in the law will have a major impact. Nationwide, more than six million uninsured people fall in the critical 100-138 percent income range, between $11,490 and $15,856 for an individual. Right now, 13 states have said they won’t expand Medicaid, including large states like Texas and Pennsylvania. More than 2 million residents in those states are ‘in-betweeners’ and will be affected by the ACA error. Several other big states — including Florida, New Jersey and Virginia — are still on the fence. If those places opt against expanding Medicaid, the number of those impacted could grow by another several hundred thousand.
The bottom line is this: Thanks to an oversight four years ago on Capitol Hill, every one of those 2 million-plus people will be able to use federal tax subsidies next year to buy private health insurance.
Read the full article here.