Yesterday I looked at the modern versions of “bus therapy” (see Bus Therapy? all members) and the incentive in the U.S. health and human service system to shift people from one jurisdiction to the other. At the conclusion of the article I mentioned what may be unintended consequences of the Patient Protection and Affordable Care Act (PPACA) – a new “donut hole” for low-income Americans in states that did not expand Medicaid as part of health care reform.
This new “donut hole” is the insurance gap for consumers with incomes below 100% of the Federal Poverty Level (FPL) who live in specific states – states where they are not eligible for Medicaid at their income level, but are also not eligible for subsidies on the exchange. For non-disabled adults, most states provide limited to no Medicaid coverage. In the health insurance marketplaces, subsidies are available for consumers with incomes from 133%-400% of FPL. It is estimated that around 75% (11.5 million) of the 15.1 newly Medicaid eligible uninsured adults across the nation have incomes below 100% of FPL and would meet the criteria for the “donut hole.” Where will this be an issue?
|Uninsured Adults With Incomes Below 100% of FPL (numbers in 1,000’s) In States Without PPACA Medicaid Expansion In 2014|
|State||Uninsured “Donut Hole”|
Now for the speculation – will consumers in these states move to seek health care in states that have expanded Medicaid? Probably not. I think this is a population that will continue to be served by a patchwork system of community health clinics, community mental health centers, hospital emergency rooms, and jails. As an alternative, state and county governments (and these safety net organizations) will be strongly incentivized to push these individuals for Supplemental Security Income (SSI) disability benefits (see Epidemic Or Non-Epidemic? all members), which would automatically qualify them for Medicaid in most states.
The management issue? If you are an executive in one of those organizations, in one of the states listed above, your challenge will be to reconcile what will be shrinking safety net funding (see The Economic Recession: Early Impacts on Health Care Safety Net Providers and State Funding Cuts & Reduced Services For The Vulnerable) with no decrease in demand. For a more in-depth look at this Medicaid “donut hole”, premium OPEN MINDS Circle Members can review our latest Market Intelligence Report: What Are The Behavioral Health Service Needs Of The Medicaid “Donut Hole” Population?
For another free resource, see: Health Care Reform Update: State Medicaid Expansion Calculus all members