Analysis: 5.2M People Could Fall Into PPACA Coverage Gap

Without Medicaid expansion in every state, 5.2 million people could fall into a "coverage gap," leading to financial strain for both the uninsured and healthcare providers, according to a Kaiser Family Foundation report.

HospitalUnder the Patient Protection and Affordable Care Act, states have the option of expanding their Medicaid programs to cover people earning up to 138 percent of the federal poverty level. As of September, 26 states didn't have plans to extend eligibility, according to the report.

In those states, uninsured adults whose incomes fall below the poverty level (the eligibility threshold for subsidies to buy coverage through the exchanges) but above the upper limit for Medicaid coverage still won't have an affordable coverage option in 2014.

As of next January, the median Medicaid eligibility level for states not expanding their programs will be 47 percent of the federal poverty level. Of those not going forward with expansion, only Alaska, Maine, Tennessee and Wisconsin cover parents earning at least the poverty level, according to the report.

The people who will fall into the coverage gap represent 27 percent of the uninsured adult population on average in states not expanding Medicaid, ranging from 18 percent in Alaska to 37 percent in Mississippi.

Those who remain uninsured despite the PPACA's attempt to provide access to coverage will face potentially serious financial consequences if they require medical treatment, according to the report. Additionally, safety-net hospitals in states not expanding Medicaid will face greater fiscal pressures than their counterparts in states that extend eligibility.

Under the PPACA, disproportionate share hospitals — which provide high levels of charity care —will see their Medicare and Medicaid payments reduced by $64 billion over the next six years.

"In the states that don't expand, they're going to see cuts to those payments without a commensurate increase in coverage, and that is likely to put a strain on those providers," says Rachel Garfield, senior researcher and associate director at the Kaiser Commission on Medicaid and the Uninsured and author of the report.

She says some providers are coping with the impending financial pressures by making sure they're well-positioned to capture expected revenue from people who gain coverage through the health insurance exchanges. Still, there's a core group of safety-net providers facing troubling uncertainty about how they will weather the cuts without Medicaid expansion to make up for the lost payments.

"A lot of them are worried about what's going to happen," Dr. Garfield says.

More Articles on Medicaid Expansion:
Commission Recommends New Hampshire Medicaid Expansion
Survey: Medicaid Enrollment, Spending Expected to Rise in 2014
Report: Alabama Economy Would Benefit From Medicaid Expansion 

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