Obamacare Coverage Gaps Are Emerging

Published August 14, 2013

Getting married or divorced, having a child, or even taking a second job could disrupt the health care coverage of 28 million low-income Americans as President Obama’s law takes effect next year. These disruptions could cause individuals and families to bounce back and forth between Medicaid and the state health insurance exchanges if the transitions between the two programs are not seamless.

Family income determines eligibility for public insurance such as Medicaid and the state-run exchanges. If a family’s income fluctuates, their eligibility could change. As a result, many low-income patients will lose access to their doctors and medications. Patients who can’t see their doctors or get their medication will avoid care or end up in publicly subsidized emergency rooms, pushing health care costs higher. Also, insurance premiums are expected to rise if young, healthy people get fed up with the transitions and opt out of health coverage altogether, according to Devon Herrick, a senior fellow with the National Center for Policy Analysis.

“Income fluctuations already cause people to drift in and out of Medicaid eligibility. They could find they have to repay health care subdivides they thought they were due, or file for additional subsidies when it’s determined they were eligible for more,” said Herrick.

Herrick says this could turn into a very big problem for low-income Americans.

“Many people will have gaps because they are not offered for those who only work 30 hours per week purposely to avoid the health insurance employer mandate,” Herrick said.

Churning Will Increase

Jonathan Ingram, healthcare policy analyst with the Illinois Policy Institute, say there is already churning going on in the U.S. labor market. People have jobs, lose them, and get another job, and this affects whether they have insurance or not, causing them to bounce in and out of the public insurance programs.

“People may qualify one month and not the next due to their job situation. Under the ACA, they will pay a penalty or qualify for a hardship exemption for not having a qualified health care plan,” explained Ingram.

John Dale Dunn, M.D., J.D., a policy advisor for The Heartland Institute and the American Council on Science and Health, says the Obama administration has created barriers to people in the margins receiving private health care.

“Their solution will be to expand Medicaid to more include more people, until it becomes Big Medicaid on steroids. When the choices are made, they will expand Medicaid to eliminate the bouncing back and forth,” says Dunn.

“The goal of the administration all along was to expand Medicaid by changing the rules and moving things around so that people will have the perception that they won’t lose their private health care options—but the truth is Washington has always wanted a government-sponsored and -controlled health care system. Subsidies for people in the lower incomes are a great opportunity to put people into a Medicaid-type program,” says Dunn.