Archives

THE BUSINESS DESK

Business news from the Fredericksburg region.

Share
RSS feed of this blog

States dig in heels on Medicaid benefits

BY CHELYEN DAVIS

Earlier this summer, when the Supreme Court ruled that the federal health care law was constitutional, it also ruled that states can’t be forced to participate in a portion of the law that expands Medicaid eligibility.

Since then, political leaders in several states have indicated they might not expand Medicaid eligibility, because doing so would add more costs to an already-expensive and fast-growing program.

Virginia is one of those states, and judging by a recent Associated Press article that surveyed states’ eligibility thresholds, Virginia is also one of the states in which Medicaid is most difficult to get.

The AP article said that several states with very low Medicaid eligibility thresholds are also states where conservative governors have said they’re unlikely to expand the program.

The AP noted that in many states—including Virginia—a working parent can fall below the federal poverty line for income, but still not qualify for Medicaid, a state-federal program in which some guidelines are set by the federal government but others are set by the state.

The federal poverty level in 2011 was $18,530 for a family of three.

According to the article, in South Carolina, a family of three earning $16,900 a year makes too much for Medicaid. In Florida, such a family making $11,000 a year earns too much. In Mississippi, $8,200 a year puts the family over the line, and in Texas and Louisiana, the threshold is just around $5,000.

Governors in those five states have said they will reject the Medicaid expansion, the AP reported.

Virginia falls in line with both the low eligibility levels and the political reluctance to expand Medicaid, although the state’s eligibility threshold varies.

Gov. Bob McDonnell has not outright rejected the Medicaid expansion, but has said he will consider opting out of it.

In mid-July, he sent state lawmakers a letter saying that “a great expansion of Medicaid, without significant reform of the current so-called ‘federal–state partnership’ is not responsible.”

McDonnell said that before state leaders decide whether to expand Medicaid, he wants to talk to the federal government about “the necessity of including clear and fair rules and state flexibility in decision making for the Medicaid program.”

In Virginia, in 2011, a little over 1 million people were on Medicaid. According to a DMAS fact sheet online, the average number of people enrolled in the program each month has risen 68 percent over the past 10 years, driven largely by increases in enrollment for people with a disability and for children.

Despite that, the fact sheet said, “Virginia’s eligibility criteria are among the strictest in the nation.”

In Virginia, as in many states, the eligibility rules for Medicaid—and other health care programs, like one for families and children—are complicated, and it’s not easy to arrive at a single eligibility threshold.

But examples from the state Department of Medical Assistance show that Virginia’s eligibility levels are on a par with the states used as examples by the AP, around 27 percent to 28 percent of the poverty level.

For example, a three-person household—like a working single parent with two children—in a rural area would have a monthly income limit of about $360 to be eligible for Medicaid. With some additional exemptions—like upping the limit $90 a month for each working adult—that family would need to have a gross income of less than $5,417 a year to be eligible for Medicaid.

That example would include families in Spotsylvania and Stafford counties—Virginia uses a tier system of three groups, with different thresholds depending on where a person lives. Those groups were defined in the 1970s or ’80s, based on a survey of housing costs, and haven’t changed since.

In Group 2 localities, that family’s annual income limit would be around $5,842. In a Group 3 locality—which would include Fredericksburg—the annual income limit would be about $6,874.

The limits would change for a two-parent family or other configurations, DMAS officials said. The income levels don’t count what such a family might receive from welfare programs.

Each year those limits are adjusted based on the federal consumer price index.

Virginia offers various health care programs for children under 19, pregnant women, people over 65, and the disabled.

But a single working adult without children doesn’t fall under any of those programs.

The federal health care law’s Medicaid expansion provision would set eligibility income levels at 133 percent of the federal poverty line, and allow childless adults to get coverage.

That equates to about $15,400 in annual individual for an individual, or $30,650 for a four-person family.

The federal government will pay for that expansion for the next few years, then start requiring states to pay part of the tab.

eluctance to expand Medicaid is due in part to how expensive the program already is. As he noted in his letter to lawmakers, Virginia’s Medicaid budget has grown 1,600 percent over the past 30 years, and is now almost 20 percent of the state budget.

States have limited ability to control those costs because of federal rules governing Medicaid.

McDonnell said Medicaid is “currently administered federally in a cumbersome, inflexible manner” and that the program’s skyrocketing growth is “an unsustainable trajectory that demands improvement and greater efficiency.”

Chelyen Davis: 504/368-5028

cdavis@freelancestar.com

Permalink: http://news.fredericksburg.com/business/2012/08/17/states-dig-in-heels-on-medicaid-benefits/

*/