Will the ACA encourage Medicaid fraud?

Just as I was thinking Medicaid as a legitimate topic for media exploration was dead in the water, along comes a good story in the St. Louis Post-Dispatch that takes a critical look at what’s going to be a very big headache for the Affordable Care Act and those supporting its goal of more people under the insurance umbrella. The piece by Virginia Young, also published on the Kaiser Health News site, represents a template other journos can use covering the Medicaid mess and the millions left without insurance options in the 21 states that have refused to expand coverage. (Five states are still deciding.)

Thankfully, we’re done with the vote count stories–whos’s in, who’s out–and now can show what might happen to those left out. Young did just that. She explained the now infamous twist served up by the Supreme Court last year giving states the right to opt out of the law’s Medicaid expansion, one of the provisions intended to give an estimated 15 million people insurance. The law said that people whose incomes were between 100 and 138 percent of the federal poverty level (this year up to $15,900 for a single person and $32,500 for families) would be eligible for Medicaid coverage, a move designed to bring benefits to childless adults who don’t qualify for Medicaid in most states. In states that don’t expand, people in this group can still go to the exchange and buy a policy and receive subsidies to help pay the premiums. But because of the way the law was written, those with incomes below 100 percent of the poverty level are barred from shopping in the exchange and receiving a subsidy if they live in the wrong state. The law assumed they would get Medicaid. In practical terms, it means someone with an income that’s 98 percent of the poverty level cannot get a subsidy. But someone whose income is over the line, say, 105 percent, can. In a perversity of Obamacare meant to help low-income people buy insurance, the very poorest are too poor to qualify.

Missouri is one of those states where the poorest of the poor will have no insurance options. They can’t afford to buy it on their own, they can’t get a subsidy to help with the premium, and they don’t qualify for Medicaid. Young pointed out how strict Missouri’s requirements are. A nonelderly adult can earn no more than 19 percent of the poverty level and must have a dependent child. A single mother with two children can have an income of no more than $3,711 a year. “It’s the working poor, it’s the hourly wage-earners–making $7 to $15 an hour” who end up with no coverage, Ryan Barker, a vice president at the Missouri Foundation for Health, told the paper. “It’s going to be heartbreaking because there’s just nothing” for people in the gap.

Young did discuss one option, an unsavory one that could undermine the positive aspects of the law. She interviewed Kathleen Stoll, the executive deputy director of Families USA, a big cheerleader for Obamacare, who suggested that those whose incomes are just below the line might want to “not make a conservative estimate and miss out on getting help.” In other words, she seemed to say the poorest may want to consider overestimating their yearly income in order to be over the line and qualify. “We’re not encouraging people to grossly exaggerate their income,” she told the paper. Exaggerate their income–grossly or otherwise? What kind of advice is that? Reading that comment I had visions of navigators suggesting to potential exchange customers that since their employment may fluctuate during the year (as it often does for people in this income group), they should fudge the numbers just a little and settle up with the government later. Unfortunately, Young did not discuss the clawback feature of the ACA, the provision that says you have to return the money the government paid on your behalf to insurance companies if your tax return shows that your income is higher than it should be to qualify for a particular subsidy or any subsidy at all.

I also had visions of a GAO or an Inspector General’s report down the road and press headlines screaming, “Obamacare Riddled with Fraudsters.” At its core, the subsidies for buying insurance and qualifications for Medicaid expansion make the Affordable Care Act a means-tested program like food stamps or Supplemental Security Income (SSI). And we know how those programs have been “demagogued” to death. This, of course, leads to the equity in healthcare question, which has not really been settled by the incremental approach to coverage, the premise of the ACA. Is every American entitled to healthcare and a way to pay for it?

“The coverage gap illustrates the polarizing debate over what role government should play in health care, who is truly needy and how to pay the bills,” Young wrote, and explored the equity question through the comments of 40-year-old Jennifer Rosa. Rosa works full time in a grocery store stocking shelves and carrying out bags of food for customers in Ellingon, MO. Her employer providers no insurance and her income is too high to qualify for Medicaid, although her son does. Like most people in this fix, she doesn’t go to the doctor even when she might need to. She says she’d like to have affordable insurance but is not a fan of the Affordable Care Act. “I don’t like the idea of them forcing this down our throats,” she explained, adding she opposes people who “sit at home and draw a check. I don’t want them to do everything for me, but as a working person, some help would be great. We’re people who work for a living.” Her comment makes the point. America is still schizophrenic about the government giving its citizens a helping hand–even in matters of life and death.

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