Vidhya Alakeson on Medicaid

Medicaid is typically thought of as the health insurance program for the poor. But when it was created in the 1960s, it was designed to cover only three low income groups: parents and children, older adults and individuals with disabilities. Single adults without a disability and without dependent children were left out. What this means in practice is that you can be homeless and have no regular income but as long as you do not meet the strict federal definition of disability and do not have any children under the age of eighteen, you cannot get access to Medicaid in many states. 47% of adults with incomes below 100% of the federal poverty level, or $10,830 a year for a single individual in 2009, are uninsured. This is one of the odd facts about the American healthcare system that current reforms are trying to fix. On 9th November, the House of Representatives passed the Affordable Health Care for America Act by 220 votes to 215. An important component of the legislation is an expansion of the Medicaid program to cover individuals and families up to 150% of the federal poverty level by January 2013. 150% of federal poverty amounts to an annual income of $16,245 for an individual or $33,075 for a family of four. This expansion will end the deliberate exclusion of low income single adults from coverage.
In the Senate, Majority leader, Harry Reid, is due to present a health reform bill to the Senate floor for a vote in the coming week. If the bill is modelled on the proposals passed by the Senate Finance Committee, it will also include Medicaid expansion but only up to 133% of the federal poverty level. The Senate proposal is also likely to allow states to enrol individuals between 100% and 133% of the federal poverty limit in a private plan offered through the Health Insurance Exchange rather than in the Medicaid program itself. To make expansion bearable for states, the House legislation, and most likely the Senate version too, will have the federal government pick up close to 100 percent of the costs of new people entering Medicaid in the short term. Under the traditional Medicaid program, the maximum federal contribution is between 70 and 75% of Medicaid costs in the poorest states.
As is so often the case in the US, national reform builds on actions taken by states over the last few years to expand their Medicaid programs to cover individuals earning above 100% of the federal poverty level and to include single adults. More than twenty states already have Medicaid expansion initiatives, including Massachusetts whose 2006 health reform has been a model for much of the current legislation. However, Medicaid expansion efforts to date have been voluntary and have exacerbated inequalities in the Medicaid program across states, with poorer states and states that are historically anti-government restricting access to Medicaid to those groups who legally have to be covered and richer states providing extensive coverage. Reform legislation will make Medicaid expansion mandatory.
What reform will not do is create greater equality in the range of health services that different states cover under Medicaid. There are only a small number of services that states have to cover and a wide range of optional ones. For instance, apart from inpatient and outpatient hospital services, physician services and screening for children, all behavioural health services are optional under Medicaid. This creates vast inequalities by state in access to non-physician and rehabilitative services for Medicaid beneficiaries with behavioural health disorders. If you live in Texas, Medicaid will not pay for routine therapy but in Massachusetts or New York, it will. Inequalities exist in all health care systems. But in few are they built into the design of the system in the way that they are in Medicaid.

Vidhya Alakeson is a former Harkness Fellow in Healthcare Policy based in Washington DC.