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What's going to happen to Medicaid?

March 28, 2011 - Mary Ann Heath
Until now, I’ve read little about how health care reform will change Medicaid, though I’ve heard a lot about it in the media. Our own Congressman Dan Benishek said recently in an interview the Iron Mountain Daily News that new reform will add “more people to Medicaid.” Benishek added that Medicaid’s minimal reimbursements will hurt revenues for both hospitals and physicians.

I’m only just beginning reading on changes to Medicaid under health care reform, but I’m not sure I agree with both of the Congressman’s statements here. Yes, reform will add more people to Medicaid, but I’m not certain that is a bad thing, or whether it will hurt hospitals’ revenue. A local hospital official recently noted the bulk of their funding actually comes from Medicaid. In fact, Medicaid funding is one source of revenue this hospital knows it can count on.

Under “Improved Access to Medicaid,” coverage is expanded to “the lowest income populations.” This is defined as those living at or below 133 percent of the poverty line ($14,400 in 2010). According to the Henry J. Kaiser Family Foundation, 17.1 million Americans currently have incomes that would qualify them for this coverage — this equates to 37 percent of all the uninsured in the United States. The foundation also highlights one third of this group has also been diagnosed with a chronic condition. (It is important to note that the foundation did not take immigration status into account. Some of the adults in the analysis will not gain Medicaid eligibility either because they are undocumented immigrants or because they have not legally been in the U.S. for five years, the foundation notes.)

States will receive federal funding for expanding coverage to these individuals. According to, the federal government will support states by providing 100 percent of the cost of newly-eligible people between 2014 and 2016, 95 percent of the costs in 2017, 94 percent of the costs in 2018, 93 percent of the costs in 2019, and 90 percent matching for subsequent years. Conneticut was the first state in the U.S. to expand coverage, doing so in 2010. It estimated that approximately 45,000 adults gained coverage.

According to a Department of Health and Human Services news release, before health care reform was passed, states could only cover childless adults by applying for a waiver of Medicaid rules. But the waivers were temporary and states were required to meet strict criteria for approval and renewal.

The Affordable Care Act requires states to cover all low-income individuals in Medicaid starting in 2014, but also allows states to get federal funding to enroll them right away, the HHS release said.

The bill also stipulates in order for an adult to receive coverage, the adult’s children must first be covered. One condition of a state receiving federal payments is that it maintain eligibility standards until its exchange becomes fully operational. Basically, in order to receive federal funding, the state can’t put stricter requirements in place.

The bill also allows states the option to expand eligibility further, or move portions of waivered populations into coverage under the state plan. As long as a state does not make requirements more restrictive, it can extend Medicaid benefits to more of the population, including those that make more than 133 percent of the poverty line.

Lastly, the Secretary of Health and Human Services will report to Congress on Medicaid enrollment, including new and total enrollment.

It definitely appears the health care bill will increase the number of individuals on Medicaid. But, it seems health care facilities could actually benefit due to an increase in Medicaid payments overall. Especially considering expanded coverage is extended to those that were previously uninsured — residents that probably have a difficult time paying their bills at all.

Mary Ann Heath has been reading and blogging about the Patient Protection and Affordable Care Act since January. Her goal is to read all 906 pages of the bill in one year.


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