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Medicaid Expansion Undermines Health Care Reform

Sec. 142 Building on the Success of the Federal Employees Health Benefit Program so All Americans Have Affordable Health Benefit Choices

(b) Sense of the Senate.—It is the sense of the Senate of that Congress should establish a means for all Americans to enjoy affordable choices in health benefit plans, in the same manner that Members of Congress have such choices through the Federal employees health benefits program.

-- Senate Committee on Health, Education, Labor, and Pensions, the “Affordable Health Choices Act”

Should Congress actually follow this guidance from the HELP Committee throughout health care reform legislation, it is likely such legislation would receive overwhelming bipartisan support and thus be an enduring legacy. Unfortunately, as more details emerge from Congress, it is obvious that the policies being forwarded do not match the goal. Specifically, the expansion of Medicaid and how Medicaid will interact with the new Gateway, new premium credits, and other parts of the HELP legislation will undermine authentic reform. Rather than gaining access to the model enjoyed by members of Congress, tens of millions of Americans and the trillions of dollars spent to support them will be caught in the Medicaid trap.

Congress to Discriminate Based on Income.
The HELP Committee assumes an expansion of Medicaid to 150 percent of the federal poverty level. Since all states cover children at least up to this level through Medicaid or the State Children’s Health Insurance Program (SCHIP), the expansion generally covers adults. It is interesting that under Section 2706, health plans will be prohibited from discriminating against individuals based on health status, medical history, etc., but the federal government itself will discriminate based on level of income. Since eligibility will be income based, an individual making $10 a month too little will wind up in Medicaid rather than having his choice of affordable health plans.

Will Expanding Medicaid Perpetuate Health Disparities?
The Department of Health and Human Services (DHHS) recently released a report on health disparities. It is unclear from the report how many individuals DHHS believes are underserved are already covered by Medicaid. If individuals covered by Medicaid suffer from health disparities disproportionately, Congress should reconsider excluding low-income individuals from the reform promised to all Americans.

A Game of Chance?
Section 3101 will allow a child who is eligible for SCHIP to enroll in one of the new qualified health plans. In most states, SCHIP begins at 100 percent of the poverty level for many children. This sets up the following potential scenarios:

1. a child living in state A lives in a family with income of 120 percent of poverty. An adult in state B has income of 125 percent of poverty. Because the child is eligible for SCHIP, he will be able to choose to enroll in the new program but the adult will not.

2. a child and an adult living in the same state with the same income; the child will be able to choose the new program, the adult will not.

3. a child and an adult living in the same household; the child will be able to choose the new program, her adult parent will not.

It obviously absurd to create these situations. But the potential for them reflects the unintended consequences of legislating in haste against artificial deadlines.

etter Alternative. Expanding Medicaid is neither innovative nor fiscally responsible given the financial conditions of the states and the federal government. It makes authentic reform more difficult by discriminating based on income. A better approach is to integrate the majority of the Medicaid population, the children and their non-disabled parents, into the model being promised to all Americans.


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