How states refusing Medicaid expansion leave out the working poor

As the battle rages in states across the country over whether to expand Medicaid under the Affordable Care Act (ACA), some critics hint that growing the insurance program for the poor means extending government “handouts” for people who just need to get a job instead.

Kansas is one of the states that isn’t expanding Medicaid. In explaining his thoughts on the issue, Republican Governor Sam Brownback said, “We’re trying to push people who are able-bodied right now to get a job. That is a far more likely route out of poverty than having a bunch of government programs giving handouts to able-bodied individuals.”

But many people who are part of working families are left without coverage in states opting not to extend Medicaid to people living at or below 138 percent of the poverty level.

In “The Coverage Gap,” Fault Lines investigates a new dichotomy in American health care — where poor, previously uninsured adults in some states are now receiving access to health coverage through the Medicaid expansion, while people at the same income level in other states are not. (The film airs Saturday, July 12, at 7 p.m. Eastern/4 p.m. Pacific.)

The foundation for this state-by-state disparity was laid when the Supreme Court ruled in 2012 that the Medicaid expansion element of the new health care law was not mandatory. To date, more than 20 states have chosen to pass on Medicaid expansion, despite the federal government’s promise to pay 100 percent of the tab for the first three years and no less than 90 percent thereafter.

The Supreme Court decision, and the power it returned to individual states, means that many of those who reside in non-expansion states fall into a “coverage gap.” Their income is too high to qualify for Medicaid but too low to qualify for subsidies in the health care exchanges. Working families fall heavily into the gap. In fact, the Kaiser Family Foundation found that in all states not expanding Medicaid, 60 percent of people who fall into the coverage gap are in a working family.

Some Republican politicians in states that aren’t expanding Medicaid argue that extending the program is merely making an already broken system significantly bigger. “It’s like a drug dealer,” Texas Lt. Gov. David Dewhurst has said. “You give them their first hit free, and then they’re hooked for years and years.”

But not participating in Medicaid expansion, while politically expedient in some regions, still involves leaving a lot of federal money on the table. So some states are taking a middle road, of sorts—using that federal funding to tailor reform to fit the needs of their residents.

For example, Arkansas got permission to use federal Medicaid dollars to help those who would qualify for the Medicaid expansion instead buy private coverage through the state’s insurance exchange, something that’s become known as the “private option.”

Taking an alternate route like the “private option” gives elected officials political cover to say they are extending coverage without supporting “Obamacare.”