For states across America that are already in the red, budget-wise, the implementation of the Affordable Care Act could add a few new frightening feet to their pit of debt. Medicaid Health Plans of America has estimated that between 2014 and 2019, the cost of Medicaid will increase $73 billion. That debt falls on both the federal and state governments, with $24.8 billion falling to the federal government and $13.6 billion going to the states.
The increase in costs is due to the new pool of potential Medicaid recipients. Medicaid is need-based and right now all income is tallied to assess a person or family’s financial need, including Social Security and Supplemental Security Income. In 2014, the federal government will use the modified adjusted gross income (MAGI) method to determine income. MAGI does not include non-taxable income, such as Social Security and SSI. Thankfully, this change may allow more Pittsburgh residents to receive the assistance they need to live.
The threshold for qualifying income levels will also be lower. Medicaid will be available to non-elderly, non-pregnant adults with no children whose income equal 133 percent of the Federal Poverty Level. Once adjusted, that increases to 138 percent.
For example, a couple who makes $20,000 in income and receives $23,000 would not qualify for Medicaid today. In 2014, however, their MAGI would only be $20,000, placing them just under the poverty threshold. Approximately 2.3 million Americans will qualify in 2014 that could not before the Affordable Care Act, reported a firm that provides actuarial consulting services to the healthcare industry.
Although Congress and the Obama administration decided on the 133 percent Federal Poverty Level requirement, the federal governments and states, as well as taxpayers, will have to foot the higher bill. Many state budget directors are already requesting that Congress alter the new law to either lower the percentage or put more of the burden on the federal government.
Source: eMaxHealth, “New Medicaid Eligibility Rules Strike Fear in States, Insurers,” Ernie Shannon, Feb. 7, 2012