Many people are unclear about the differences between Medicare and Medicaid. The implementation of the Affordable Care Act (ACA) elicits even more questions. In this blog post, the second of two in a series on the Affordable Care Act, we explain the origins and operations of Medicaid, and how Georgia’s Medicaid programs are impacted by the ACA.
A sample Georgia Medicaid card.
Medicaid is the United States’ first and largest government health insurance program for the poor. It began in 1965, when President Lyndon Johnson signed it into law as Title XVIII of the Social Security Act. (As we addressed in an earlier blog post, Title XVIII also created Medicare as the country’s first national health insurance program for individuals over age 65 or who had certain disabilities.)
As of June 2013, there were more than 55 million Medicaid recipients across the country, meaning that approximately one out of every six people in the United States is receiving Medicaid. It comes as no surprise that there have been substantial increases in Medicaid enrollment over the past several years. The economic downturn beginning in 2008 left more families and individuals with no job, fewer hours, and in many cases, in poverty. Many of these “newly poor” qualified for and applied for Medicaid so that they would have health insurance.
While Medicare is solely administered by the federal government, Medicaid programs are jointly administered by both the federal government and by states, with each state having its own agency responsible for administering the program.
MEDICAID IN GEORGIA: SOME HIGHLIGHTS
Here in Georgia, the Department of Community Health (DCH) administers more than 20 different types of Medicaid, often called “classes of assistance.” Each class of assistance serves different needs, and each has its own eligibility criteria.
The most common class of Medicaid assistance in Georgia is SSI Medicaid. Georgia is one of thirty two states where receiving even one dollar of Social Security Income automatically qualifies someone for Medicaid. The second most common class of Medicaid assistance in Georgia is nursing home Medicaid. In our practice, we very frequently help Georgia seniors and other individuals who need help paying for long-term care to apply for and maintain eligibility for this class of assistance.
Georgia Medicaid also offers several “waiver” programs for individuals whose level of medical need and financial status qualify them for nursing-home Medicaid, but who want to receive long-term care services at home or in their community. Because many individuals want to remain at home rather than live in a nursing home, demand for these waiver programs is usually quite high, such that waiver programs often have long waiting lists.
Through the Katie Beckett program, Georgia DCH also offers Medicaid assistance for families have too much income to qualify for Medicaid, but have children with health conditions that are incredibly costly to treat.
The Georgia Medicaid classes of assistance described here are only a few of the many offered. In each case, budgetary and personnel limits mean that the demand for services often surpasses their availability.
MEDICAID EXPANSION AND THE “GAP POPULATION”
The passage of the Affordable Care Act (ACA) on March 23, 2010 originally required states to expand Medicaid to include individuals and families at up to 133% of the Federal Poverty Level. However, a Supreme Court decision in June 2012 (NFIB v. Sebelius) left each state free to choose for itself whether it would expand.
In the wake of that decision, as states have decided (or, in many cases, state legislatures have argued) about whether to expand Medicaid, we are left with a map resembling a patchwork quilt in which many states (26 states and the District of Columbia) are proceeding with expansion of Medicaid, some states (19 of them) currently not expanding Medicaid, and the remainder (5 states) in open debate about whether to expand Medicaid or not. Because Medicaid expansion is a very politicized and thus partisan issue that is decided by state legislatures, you will notice that heavily Democratic states (especially in the northeast, Midwest, and on the West Coast) have mostly opted to expand, while states with Republican-controlled state legislatures (especially in the South and western interior states) are currently not expanding.
As one of the states that is not currently expanding Medicaid, Georgia has approximately 620,000 residents whose incomes place them between approximately 45% and 133% of the Federal Poverty Limit. This group makes too much money to qualify for Medicaid under current Georgia rules. Yet the vast majority of them have incomes below 100% of the Federal Poverty Level, such that they do not qualify for the subsidies offered to those making between 100% and 400% of the Federal Poverty Level who want to purchase insurance through the health insurance marketplace that the Affordable Care Act created.
To repeat: Georgia has more than half a million residents who are too “rich” to qualify for Medicaid, yet too poor to receive subsidies that would enable them to self-insure through the ACA health insurance marketplace. Every state which has opted not to expand Medicaid has such a “gap population”.
Critics of Medicaid expansion argue that states are already strapped for cash, and cannot afford to expand Medicaid. Here in Georgia, Medicaid expansion to include individuals and families living at up to 133% of the Federal Poverty Limit would cost the state roughly $2.1 billion over the first ten years- an increase of roughly 1% of the state’s annual budget.
In contrast, advocates of expansion assert that Medicaid expansion is a smart investment- one that would not only provide members of the “gap population” with access to healthcare, but would also result in tens of thousands of new jobs and pump huge amounts of money into local economies.
THE AFFORDABLE CARE ACT’S IMPACT UPON SPECIAL NEEDS PLANNING IN GEORGIA
Whatever your opinion about Medicaid expansion may be, even in the absence of expansion, ACA’s creation of an increasingly robust health insurance marketplace means that individuals who have a windfall through an inheritance or an injury settlement now often have a choice between putting that money into a Special Needs Trust to help them qualify for Medicaid, or self-insuring through the health insurance exchange.
In the past several months, we have helped numerous individuals to do a cost-benefit analysis of whether it was better for them to remain on or apply for Medicaid, or whether they might be better off (financially and flexibility-wise) self-insuring by purchasing an insurance policy through the ACA marketplace.
In this context, what is most important to us is that we take time to educate our Special Needs Trust planning clients and potential clients on their options (Medicaid vs. self-insuring under the exchange) so that they can make the best decision for themselves.