Obamacare’s Forgotten Faces

To their credit, some members of the media have begun examining the plight of those who will still be left behind after enrollment in Obamacare’s state insurance exchanges kicks in on October 1. That not every uninsured person in the American nation will be able to get health insurance should hardly be a surprise. The great coverage expansion, helpful though it may be to millions who have the resources to shop in the exchanges, was never intended to provide universal health insurance, as other countries do.

To review: When Obamacare became law, the CBO estimated that roughly 20 million people would remain uninsured, out of the some 51 million who then had no coverage. Last September the CBO revised its estimate to 30 million uninsured. The coverage expansion contemplated that states would–with the help of federal dollars–expand Medicaid eligibility to adults under age 65 with incomes up to 138 percent of the federal poverty level, catching more people in the insurance net. This year, that would include people with incomes up to $15,900 for a single person and up to $32,500 for a family.

Those with incomes at the poverty level and below were supposed to get Medicaid benefits. About half the states, however, have nixed Medicaid expansion–as the Supreme Court said they could do–and left stranded millions of people with very low incomes and few options for health insurance. They are among the poorest of the poor.

The new hole in the safety net, depending on which state you live in, works this way: In states that don’t expand, people with incomes between 100 and 138 percent of the federal poverty income level can get a tax subsidy to buy health insurance in the state exchanges. But because of the way the law was written, people with incomes under 100 percent of the poverty level are out of luck if they live in the wrong state. That means someone with an income that’s 99 percent of the federal poverty level cannot shop in the state exchange and receive a subsidy the way someone with an income of 101 percent of the federal poverty level can. With most means-tested programs like food stamps, people with incomes over the eligibility line don’t qualify. For health insurance subsidies, it’s people below the line who don’t qualify, a kind of perversity of Obamacare, at least in states that elected not to expand Medicaid.

The idea had been that those below that 100 percent line would get coverage via Medicaid. With the original Obamacare expansion, everyone in this group would have been able to get Medicaid, which actually could offer better benefits than some policies sold in the exchanges. But then, the Supreme Court allowed each state to decide whether to expand its Medicaid program. And about half the states have refused to expand, mostly because their Republican leaders would like to reject Obamacare. They often cite fiscal reasons, although the federal government picks up most of the cost in the early years.

As a result, many people with incomes below the the poverty line are stuck–they are too poor to buy insurance on their own, and without subsidies most will have a tough time paying the entire premiums themselves. Some may be eligible for health benefits under their state’s current Medicaid eligibility rules. In other states, though, these people are left out.

Here’s where the press comes in. Lord knows, we’ve had what seems like a ton of stories on the Supreme Court decision announced a year ago that got health reform into this Medicaid mess, but until recently there has been little coverage of those caught in the insurance no-man’s land. In late May, Robert Pear of The New York Times called attention to this coverage loophole in the new American insurance paradigm. Bruce Lesley, president of First Focus, a child advocacy group, told Pear, “People will be denied assistance because they don’t make enough money. Trying to explain that will be a nightmare.”

In the last few weeks, other outlets have burrowed in and amplified this irony of Obamacare and the nightmare that Lesley fears. An emerging theme: some of those with the lowest wages may have a devil of a time affording coverage for themselves and their families. Bloomberg reporters Alex Wayne and David Mildenberg examined how low-wage home care workers might fare under the law. The prognosis: probably not very well. They wrote about Rose Ruiz, who makes $8 an hour as a home care worker for Medicaid patients but who has no insurance herself. Her best chance at getting it was through Medicaid expansion. But that won’t happen because she lives in Texas, a state that turned down Medicaid expansion. The reporters noted that this decision put her in a bind, because Ruiz–and 4.4 million others in the states that have chosen not to expand Medicaid–“would need pay raises potentially triple their current wages or more, depending on the size of their families, to reach enough income to qualify for government subsidies for private insurance.” That nightmare thing again!

Bloomberg also zoomed in on another Catch-22, and a big one: workers with low incomes are not eligible for subsidies if their bosses offer insurance that the law deems “affordable.” That means it costs them less than 9.5 percent of their income. Steve Wojcik, a vice president of the National Business Group on Health, noted that employers who offer coverage may end up disqualifying their workers from subsidized insurance through the exchanges. Yet, he added, the employer coverage may be too much to afford.

Emily Maltby in The Wall Street Journal showed how that feature of Obamacare may snare Salvador Martinez, who works for a landscaping firm in Santa Clarita, CA., and who earns $10.50 an hour. He told the Journal that he would love to have coverage but cannot afford the $140 or so for his share of the monthly premium for the policy his employer provides. His employer, Chris Angelo, said that his workers might say they are interested in employer coverage, but he believes “they will opt out. They’d rather have the cash than pay the employee portion of the premium.” The Journal concluded that the landscape company’s experience “suggests that many low-wage workers could remain uninsured next year, despite the law’s subsidies and penalties.”

In a substantial story posted on HealthyCal.org, Lynn Graebner told what’s likely to happen in California, the state emerging as a leader in all things Obamacare. Citing a study last fall by the Center for Labor Research at UC Berkeley, Graebner reported that nearly 40 percent of the uninsured won’t have an affordable coverage option, and about one-third of them–some one million people–will not be able to shop in California’s exchange because they are undocumented immigrants. “But even legal residents may not have sufficient income to pay for the health plans being offered on the exchange,” she writes.

The stories so far bring up the equity issue in healthcare ignored from the very beginning of the reform debate. Way back in 2008 when debate began, CJR urged the press to examine the equity question–the fair distribution of healthcare to those who need it, a leveling of barriers (cost barriers or other kinds) to care. Almost no one did, largely because the framers of the law never talked about it.

Achieving real equity in a private system is nearly impossible, and a private system was what was on the table. But as the press unravels the ironies laced through the health reform law, it’s good to think about giving voice to those who will be left out. Isn’t that one of the things the press is supposed to do?

Follow @USProjectCJR for more posts from Trudy Lieberman and the rest of the United States Project team, including our work on healthcare issues and public health at The Second Opinion. And for Trudy’s resource guide to covering the ins and outs of buying insurance on the state exchanges, see Open Wide, from CJR’s new July/August issue.