Avoiding the Gaps: Creating Healthcare Policy That Works

By The School of Public Affairs

The driving force behind most healthcare policy advocates is to maximize access and minimize cost. When evaluating and recommending policy, however, it’s essential to consider all of the implications and potential consequences. Even the most well-intentioned public policy can negatively affect some of those it is designed to help.

The Intent of the Medicaid Expansion

One goal of the Affordable Care Act (ACA) was to extend healthcare coverage to the portion of the population least likely to be able to afford health insurance. The ACA included a federal expansion of Medicaid funding to provide coverage to those living below 138 percent of the federal poverty level. For those with incomes above this line up to 400% of the poverty level, coverage was made affordable through premium tax credits. [1]

The Impact of Opting Out

The ACA did not account for states opting out of the Medicaid expansion. By assuming universal participation, the law’s wording unintentionally created a coverage gap for an already at-risk population. Individuals who would have been covered by the Medicaid expansion are not eligible for the premium subsidies, leaving them without coverage.

“Everyone gets subsidies if they qualify, but there’s a gap where people who are still low income don’t qualify for coverage because their states aren’t participating,” says Dr. Jocelyn Johnston, a professor in American University’s School of Public Affairs. “The extent to which people have to pay for healthcare out of pocket varies from state to state, so you end up with this inequality based upon where you live.”

In 2012, the Supreme Court upheld the ACA, but ruled that states could choose not to expand Medicaid, giving the governors the right to decide. States opting out forgo only the additional federal funds earmarked for expansion, rather than Medicaid funding they already receive.[2]

As of the Fall of 2017, 19 states have still chosen not to expand Medicaid coverage, leaving millions of adults not only not covered by Medicaid but also ineligible for the premium subsidies. [3]

“The individuals are caught in the middle,” says Dr. Jocelyn Johnston, a professor in American University’s School of Public Affairs. “It’s the state’s right to opt out, but it’s a burden on those affected.”

Looking Ahead

Despite the challenges the ACA has faced and the disparity it unintentionally created, there has been an evolution in healthcare policy.

“In terms of public opinion, we are reaching some agreement that we should have some overarching federal program to reach everyone,” says Dr. Johnston. “We have to keep experimenting and it’s one of the strengths of our system: we try different things and that’s opportunity to learn and do things better.”

The coverage gap created by the ACA demonstrates the importance of carefully weighing assumptions and wording to ensure that the intent of policy matches with the effect once implemented. With politically charged topics like healthcare, there may not be a second chance to get it right.

 

 

 

 

 

[1] https://www.healthinsurance.org/medicaid/

[2] https://www.americanprogress.org/issues/healthcare/news/2013/04/02/58922/10-frequently-asked-questions-about-medicaid-expansion/

[3] http://www.kff.org/uninsured/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid/

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