We learned a couple of things about Obamacare last week. One is that the “Affordable” Care Act will hit a lot of Georgians’ wallets hard.
Another is that Gov. Nathan Deal’s decision not to expand Georgia’s Medicaid program may be justified in an unexpected way.
Insurance commissioner Ralph Hudgens last week said “bronze” health plans on Georgia’s exchange, the minimum coverage the law allows, will cost hundreds of dollars a year more than similar plans cost now. A key question is how Obamacare’s higher costs might be offset by Obamacare’s subsidies.
It’s unclear if Georgians will really be eligible for those subsidies. The law says they’re available only on state-run exchanges. But the feds’ current plan is also to award subsidies on a federally run exchange, like Georgia’s.
That plan is being challenged in court. But if it holds up — and here’s where the Medicaid comparison comes into play — many low-income Georgians could get a bronze plan without paying a premium.
Obamacare’s subsidies are offered on a sliding scale up to four times the federal poverty level (FPL), or $45,960 for one adult. On another sliding scale, Obamacare requires subsidy recipients to pay a certain portion of their gross income toward their premium.
At the same time, Obamacare offers funding to states that expand their Medicaid plans to cover people earning up to 138 percent of FPL (just under $16,000 for one adult).
Obamacare proponents say the governor was short-sighted not to expand Medicaid, because most of the cost would be paid from federal taxes rather than state taxes. Deal argues the state struggles to pay for Medicaid now and can’t afford hundreds of millions of dollars a year in new costs — or, especially, any overruns if Washington can’t make its promised payments.
But if the subsidies are available in Georgia, they would allow many people at or below that Medicaid threshold of 138 percent of FPL to get a bronze plan without paying a premium.
Using figures provided by the insurance commissioner’s office and a subsidy calculator by the Kaiser Family Foundation, we can conservatively estimate that the subsidy could cover a bronze plan’s entire annual premium for:
- a single, male, 25-year-old non-smoker in Atlanta who earns 135 percent of FPL or less;
- similar 45-year-olds who earn up to 142 percent of FPL;
- and similar 64-year-olds who earn up to 187 percent of FPL.
So, many Georgians who would have qualified for an expanded Medicaid could still get coverage, and the state’s expenses wouldn’t increase.
Is a bronze plan better than Medicaid? That depends.
Medicaid patients pay far lower co-pays — if they can find a doctor. A recent survey showed two in five Georgia physicians don’t accept new Medicaid patients, chiefly because Medicaid reimbursements are too low.
In that sense, being a Medicaid patient in Georgia is akin to to having a city pension in Detroit. It sounds good but, in reality, may disappoint.
A bronze plan requires patients to make co-pays and meet deductibles. For people making less than $16,000 a year, that’s no small thing. But at least they would have coverage in case of an emergency, and at least their coverage would be widely accepted.
Neither option is ideal, really; not least because federal taxes also come from Georgia taxpayers.
What taxpayers and the uninsured need is a more sustainable Medicaid program. Sadly, Obamacare doesn’t promise that.