Health Care Ruling Could Paralyze Medicaid

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By Deanne Katz, Esq. on June 25, 2012 9:44 AM

The forthcoming health care ruling will have far reaching effects, including a potentially significant impact on Medicaid.

The new health care law expands Medicaid's reach and forces states to comply with those expansions or lose their federal match dollars. Obamacare would drastically alter eligibility for the program and allow more Americans to qualify for benefits, according to The Washington Post.

It's worth taking a second here to review some federal benefits vocabulary.

Federal health insurance currently involves two programs: Medicaid and Medicare. The latter provides across-the-board insurance to people over age 65, regardless of income, and is effectively the same everywhere in the country.

Medicaid, on the other hand, is an insurance program for low-income aged and disabled people who don't otherwise qualify for Medicare. It covers children in families that earn below 200% of the poverty level but adult eligibility is more complicated.

Applicants must fall either into the aged or disabled category under federal qualifications. But other factors, such as the level of disability, qualifying income, and other factors, such as pregnancy, vary by state. The expansion under Obamacare would cover all Americans whose household income falls below 133% of the poverty level.

That would provide coverage to people living on $31,000 for a family of four, according to The Washington Post's calculations. But the expansion is one of things that could be cut by the Supreme Court's ruling.

Striking down the entire health care law could also allow states to tighten their eligibility restrictions and leave more people without coverage.

There's also some speculation that any decision by the justices could endanger the whole Medicaid program.

It's possible that the entire program, which has not been fully examined by the Court, could be found unconstitutional, said Sara Rosenbaum, professor of health policy at George Washington University, in a statement to the Post.

If the health care ruling goes that far, it would be a huge blow for Medicaid recipients. If the expansion provisions remain intact, the new nationwide eligibility requirements would go into effect in 2014.

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