New HHS Rules: People Determined Ineligible for Medicaid Due to Their State Not Expanding Medicaid Will Be Exempt from the Individual Mandate
On June 26, the Department of Health and Human Services (HHS) issued final rules that defined eligibility for exemptions from the individual shared responsibility payments and how certificates of exemption will be granted. HHS made clear in this rule that people who are determined to be ineligible for Medicaid solely because their state did not expand the program will not be required to pay a penalty for not purchasing insurance.
In January 2014, when the Affordable Care Act is fully implemented, most Americans will have the opportunity to purchase affordable health insurance. There will also be a requirement that most people have health insurance or pay a penalty. But the penalty doesn’t apply to everyone. There are exemptions for specific situations, such as financial hardship or religious beliefs. On June 26, the Department of Health and Human Services issued final rules outlining who would be exempt from the penalty. In those rules, HHS made clear that people who are not eligible for Medicaid because their state did not expand the program would be exempt from the penalty.
While this isn’t surprising, it is an especially important protection given that several states have still not decided to expand health care coverage to some of their most vulnerable residents. Starting next year, there will be subsidies available to help low- and middle-income people afford insurance through the state-based insurance marketplaces, but they are available only to those who earn between 100 and 400 percent of the poverty level ($11,490 to $45,960 for an individual). Individuals and families earning less than 100 percent of federal poverty and living in states that are not expanding Medicaid will have few, if any, options for affordable insurance. It is estimated that more than 9 million people who otherwise would have been newly eligible for affordable coverage will be left behind because their elected officials have chosen to put politics ahead of the health of their constituents.
So while it is good news that people will not have to pay a penalty for not having coverage in states that refuse to expand Medicaid for political reasons, the bad news is that a lot of people will be left behind in these stubborn states without any way to get affordable health coverage. These uninsured will still have trouble affording doctor’s visits and care, they will wait for a health care crisis to get help (when the cost of the care will be higher), some will end up facing bankruptcy due to their medical bills, and too many won’t get any health care—the consequences of which will be debilitating if not deadly.
To date, 23 states and the District of Columbia are choosing to accept federal funds to expand affordable health care coverage to their residents. We’ve said it time and time again: the Medicaid expansion is a good deal for states. States that have said no to this deal are leaving millions of dollars on the table, hurting their local hospitals and businesses and—worst of all—denying their residents the opportunity to enroll in affordable health coverage.
Do you know if your state is making the right choice by expanding Medicaid? If they aren’t, it isn’t too late. States can opt into the Medicaid expansion at any time. Contact your state representatives to tell them to put politics aside and do what’s right for your state and its citizens.