Protection of Medicaid Beneficiaries

Posted by Emma

Last week in the Senate Finance markup of the America’s Healthy Futures Act, Senator Mike Enzi proposed an amendment that would allow newly eligible Medicaid beneficiaries the choice of either entering into their state’s Medicaid program or into the state based Exchange.  

The expansion of Medicaid means that those earning up to 133% of poverty would be eligible for the Medicaid coverage.  While it has it’s weaknesses, Medicaid is essentially no cost to the beneficiary and covers a wide array of procedures.  

Enzi would allow the newly Medicaid eligible (those earning 100%-133% of poverty) to choose to enter the Exchange where they would receive federal subsidies but pay 3% of their income. The movement of people away from Medicaid and into the Exchange would cost the federal government due to the higher costs of private insurance and the fact the states do not pay into the Exchange subsidies. 

Debate did not surround the validity of the plan or the consequences of this policy action, rather the debate focused on one issue: funding.  Enzi proposed paying for the proposal through reducing subsidies starting at those earning 400% federal poverty and working down from that point.  Rightfully so, the Senate Finance Committee Democrats (with the exception of Wyden (D-OR) and the addition of Snowe (R-ME)) protected the fragile affordability measures in this bill.

Had Enzi proposed funding this proposal through other means (fines or taxes, reducing waste in government programs, etc.) chances are it would have passed the Finance committee.  The provision is in the House America’s Affordable Health Choices Act HR 3200.  In the House bill and the current language of the Senate Finance bill, non-traditional or newly eligible Medicaid enrollees are given the choice to enter the Exchange.  The House bill limits this to individuals who have been insured in a grandfathered, qualified health benefits plan, or group plan within the past six months.  The Finance bill gives these individuals the choice after 2014.  Allowing these limits gives some Medicaid beneficiaries some protection.

A concern that is not addressed by Sen. Enzi’s amendment or by the House bill is protection of Medicaid enrollees.  Private plans will target and attract newly eligible Medicaid beneficiaries to get their business.  Beneficiaries will be lured into plans that are at higher cost to both them and the federal government, not to mention less coverage than Medicaid, the “payor of last resort.”

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