Medicaid expansion under Obamacare: Changes you should know

Chris Kissell

Medicaid expansionFor poor people, the disabled, the elderly and others, Medicaid literally can be a lifesaver.

In fact, the benefits offered by this government health care program can be summed up in three words, according to Jillian Phillips, an organizer at the Illinois-based Campaign for Better Health Care.

"Peace of mind," she says.

In 2014, major changes to Medicaid mean that more people than ever are eligible for the program. But the state you live in largely determines whether you can enjoy the expanded benefits now in effect.

What is Medicaid and what does it cover?

Medicaid is a health insurance program for people with low income. It's funded by a joint effort between the federal government and individual states.

Nearly 60 million American citizens and eligible immigrants receive Medicaid services, according to the U.S. Department of Health and Human Services.

Medicaid benefits vary from state to state. All states are required to cover certain types of care, including:

  • Inpatient and outpatient hospital services.
  • Physician services.
  • Nursing facility services.
  • Laboratory and X-ray services.
  • Family planning services.

In addition, states have the option to provide other benefits, including:

  • Prescription drugs.
  • Physical, occupational and speech therapies.
  • Dental and vision services.
  • Hospice.

A full list of mandatory and optional benefits can be found on the website.

A related program -- the Children's Health Insurance Program, or CHIP -- provides low-cost coverage to children whose parents earn too much income to qualify for Medicaid coverage. Some states also extend CHIP coverage to parents and pregnant women.

Expanded eligibility in 2014

Traditionally, certain groups of people -- including children, pregnant women, parents of dependent children, disabled people and the elderly -- have been eligible for Medicaid so long as they met income requirements, which varied significantly by state.

Childless adults and people who made too much money generally were excluded from the program, unless they met other criteria -- such as being disabled -- or unless a state applied for a waiver to expand coverage.

However, beginning this year, health care reform has dramatically expanded the pool of people eligible for Medicaid, Phillips says.

"Under the Affordable Care Act, childless adults who make less than 138 percent of the federal poverty level are now eligible for Medicaid," Phillips says. This is $16,105 for an individual.

That means that virtually all Americans under the age of 65 who make less than $16,105 are supposed to be eligible for Medicaid under Obamacare.

The 2010 health care reform legislation required every state to expand Medicaid according to these parameters. However, in June 2012, the U.S. Supreme Court ruled that requirement to be unconstitutional, which made expanding Medicaid optional.

Thus far, 26 states and Washington, D.C., have chosen to expand Medicaid eligibility.

States that haven't expanded eligibility

If your state didn't expand Medicaid eligibility in 2014, your options for finding affordable care may be limited, says Dee Mahan, Medicaid program director for Families USA, a nonprofit health advocacy organization.

She says that in these states, adults without dependent children may not have coverage, no matter what their income is.

Judy Waxman, vice president for health and reproductive rights for the National Women's Law Center (NWLC), says the failure to expand Medicaid eligibility mostly impacts poor people who can't get insurance through their employer.

"You're going to have more women than men in that category," she says. This is because, according to the NWLC, nearly six in 10 poor adults are women, and over 40 percent of single mothers are below the poverty line.

And even people who are eligible in these states may find that their benefits aren't as robust in states that have expanded Medicaid.

For example, parents with dependent children in states that have expanded eligibility qualify for Medicaid if their income is $16,105 or less.

But eligibility drops sharply in states that have chosen not to expand Medicaid coverage, such as Alabama (18 percent of the poverty level), Texas (20 percent of the poverty level) and Louisiana (24 percent of the poverty level), according to the Kaiser Family Foundation.

If you live in one of these states and don't qualify for Medicaid, your best option for finding affordable health care may be to enroll for coverage through the health insurance marketplace. Open enrollment for 2015 begins Nov. 15.

When and how to apply for Medicaid

The first step in applying for Medicaid coverage is to find out if you're eligible. Each state has different requirements, so you will need to go to your state's Medicaid website to find out the local rules.

However, if your state is among those that have expanded Medicaid eligibility, the U.S. Centers for Medicare and Medicaid Services says you are likely to qualify for Medicaid if you are:

  • An individual earning $16,105 or less a year.
  • A family of four earning $32,913 or less a year.

Those who are eligible for Medicaid can apply through their state agency, or fill out a form at the federal government's health insurance marketplace website.

Most Americans are required to purchase health insurance under new rules that are part of health care reform legislation.

Anyone who is approved for Medicaid is considered covered by health insurance and doesn't have to purchase a separate plan. You can apply for Medicaid at any time throughout the year, and coverage can begin immediately.

Although it is much easier than before to qualify for Medicaid, many adults aren't taking advantage of the opportunity, Phillips says.

"Since this is new, many of these adults assume they can't get coverage," she says. "We have to really help educate the public on these new eligibility parameters."