Mississippi Senate leaders point to a component of the federal health care law, the Affordable Care Act, as a reason not to expand Medicaid to provide health care to the working poor.
The Senate passed legislation allowing only those who earn below 100 percent of the federal poverty level (about $15,000 per year per person) and who work to be covered by Medicaid.
The state House plan would provide Medicaid coverage for those earning up to 138 percent of the federal poverty level (about $20,000 a year), as allowed under the Patient Protection and Affordable Care Act, also known as Obamacare.
Leaders of the House and Senate are expected to begin talks in the coming days in an attempt to iron out differences between the two chambers.
One of the reasons Senate leaders say it’s not expanding Medicaid coverage for those earning between 100 percent and 138 percent of the federal poverty level is that people who fall into that income bracket , can get private insurance through another component of the ACA—the Affordable Care Act’s Marketplace, or “exchange.” People can get private insurance through the exchange and get federal help paying for the policy.
“We want to keep more people on the exchange. Reimbursements (to health care providers) are better” through the exchange than through Medicaid, said Senate Medicaid Chairman Kevin Blackwell, R-Southaven. “A big part of the argument for expansion is to help hospitals. Well, if you’re going to take the people who currently have commercial insurance and put them on Medicaid, you’ve just killed your hospitals.
While exchange policies help people who might not otherwise have access to health coverage, the problem, according to hospital officials in Mississippi, is that they often lose money when they treat low-income people who have marketplace coverage.
“The bottom line is that Medicaid reimburses at a higher rate,” said Lee McCall, CEO of Neshoba General Hospital in Philadelphia. He said there are some private insurance policies that pay Mississippi hospitals a higher reimbursement rate, but not marketplace plans.
“Most of these marketplace plans are what I kind of call catastrophic coverage …,” McCall said. “For the most part, the deductibles are so high that many people can’t afford to pay them.”
Kim Hoover, acting CEO of the Mississippi Hospital Association, said Medicaid actually pays state hospitals at the commercial rate — or the same rate paid by private insurance companies.
Gov. Tate Reeves’ Medicaid department got approval from federal Medicaid officials to pay at that higher rate last year. State hospitals agreed to pay the local matching funds needed to draw down the additional Medicaid dollars to pay at the commercial rate.
With the better rate hospitals now receive from Medicaid, Hoover said, “The main difference between the two is the typically high deductibles for hospital services in the exchange plans. If the patient’s deductible is not paid, then the plan does not pay the hospital the full payment. By comparison, Medicaid patients have no deductible.
“The lack of a deductible combined with the commercial rate means that Medicaid is generally better for providers and patients than exchange plans,” Hoover continued.
Hoover cited the example of “a 54-year-old man from Hinds County making $17,000 a year could pay a monthly premium of $16.85 with a deductible of $6,350 for one of the exchange plans. In this case, the deduction is over 33% of the person’s income before taxes. Mississippi recently led the nation in medical debt bankruptcies. Expanding Medicaid will better protect these patients from medical debt.
Of course, thanks to changes made to the exchanges during the pandemic, people with low incomes can get a better policy than the one described by Hoover. With federal assistance, people between 100% and 138% of the federal poverty level can get a plan with little or no monthly premiums. But there are still out-of-pocket costs or policyholder deductibles in marketplace plans, though currently less than the amount Hoover cited.
For example, on the federal website HealthCare.gov, where Mississippians go to get a marketplace plan, a 40-year-old earning $19,000 a year can get a plan with a monthly premium of less than $5. But there will be a $1,650 out-of-pocket cost for one plan.
In general, out-of-pocket costs represent the most a person would pay in a year for in-network health services.
Benefits offered by marketplace plans were enhanced through the COVID-19 relief legislation passed during President Joe Biden’s administration. Because of this legislation, people are paying lower monthly premiums and less out-of-pocket costs than before.
Robin Rudovitz, director of the Medicaid and Uninsured Program for KFF, said the “enhanced coverage is going down” that people currently benefit from will expire in 2025. After that, people will pay more in premiums and more in deductibles and out-of-pocket expenses. out of pocket expenses.
In addition, Rudowitz pointed out that according to a recent consumer survey, people with Medicaid, although they tend to have more serious health care problems and therefore more opportunities for problems, rate their coverage through Medicaid more highly than those in private market plans rate their policies.
State Insurance Commissioner Mike Cheney was one of the first state officials to argue in favor of expanding Medicaid only to those earning below 100 percent of the federal poverty level to ensure that people above that income level remain on the market.
READ MORE: Negotiations Begin: Where House, Senate, Governor Stand on Medicaid Expansion? Is there room for compromise?
Cheney said there are about 140,000 Mississippians between 100 percent and 138 percent of the federal poverty level who have insurance through the marketplace. Under federal law, if these people qualify for Medicaid expansion through an expansion in their state, they will no longer receive federal assistance with the private insurance option. Without federal financial assistance, low-income people would not be able to afford marketplace plans.
Moving those people to Medicaid “would destroy the exchange,” Blackwell said. But 40 other states have expanded Medicaid and still have exchange policies for those who earn too much to qualify for Medicaid expansion.
Some states, such as Arkansas, have used Medicaid expansion funds to pay for private policies for those who qualify for Medicaid expansion. The federal government allows these states to use their Medicaid expansion funds to pay for the cost of private health insurance.
READ MORE: Speaker White on Medicaid expansion talks: ‘Come for the savings, stay for the compassion’
The federal government pays 90% of Medicaid expansion health care costs. But the federal government won’t recognize the Senate’s plan to expand Medicaid and thus pay only 77 percent of the costs, thereby costing the state more to cover fewer people, according to various studies. The federal government will also pay Mississippi an additional nearly $700 million over two years as an incentive to expand Medicaid.
KFF, the national nonprofit that researches health care issues, “estimates that approximately 166,000 uninsured adults will be eligible for the expansion—this includes 102,000 who currently fall into the coverage gap (earning less than 100% of the federal poverty level) and another 64,000 who have incomes between 100% and 138% and could be eligible for marketplace coverage but are not enrolled.”
Additionally, there are 140,000 Mississippians who have private insurance through the exchange would have to drop their policy and sign up for Medicaid if the expansion is approved by the Legislature.
Based on the experience of hospital officials, replacing these private policies with Medicaid would not necessarily be a bad thing.
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