New Hampshire lawmakers are currently debating whether to take the federal dollars available to us to insure many of our lowest-wage workers through Medicaid. One of the consequences of not taking this money is to create a coverage canyon for many of the people who would have enrolled in Medicaid.
This means that in the absence of Medicaid expansion, a single mother with one child earning $11,000 a year would not be eligible for ANY financial assistance to purchase health insurance while a mother with one child earning $22,000 would be eligible for substantial federal aid.
This strange situation arises because the Affordable Care Act, as written, expected most people with incomes up to 138 percent of the federal poverty level to enroll in Medicaid. The U.S Supreme Court subsequently determined this must remain optional for states.
As a result, the federal law provides few if any subsidies to those with incomes below 100 percent of the federal poverty limit. In other words, many working poor – those who would have been covered by Medicaid – do not qualify for subsidies to buy coverage in the ACA’s health insurance Marketplace. They can still shop in the Marketplace, but they will not qualify for any financial assistance to purchase private market products there.
In New Hampshire, this has very real implications for the debate about the Medicaid expansion because it means the vast majority of the people who are projected to enroll in Medicaid if we take the federal funds to offer that coverage to them, will be ineligible for subsidies if we do not.
In fact, 69 percent of the would-be Medicaid enrollees will be ineligible for premium subsidies available through the Health Benefits Marketplace because their incomes are below 100 percent of the federal poverty limit.
Without additional financial assistance, many of them will remain uninsured. In sum, likely Medicaid enrollees will have neither the legal nor financial incentive to obtain health insurance coverage, leaving them in a coverage canyon where Medicaid leaves off and private market subsidies begin. The only way to bridge that canyon right now is for New Hampshire to move forward with the Medicaid expansion.