Wonky Word Wednesdays: Coverage Gap

Jun 04, 2014

Yesterday, petition gatherers across the state asked voters to sign petitions on a variety of issues. One of these issues – especially important to us at MBPC – is the Healthy Montana Initiative I-170 to expand health care coverage to people caught in the “Coverage Gap,” also known as the Medicaid gap.

When I first started working at MBPC, Medicaid expansion was the first meeting I had and I felt painfully out of touch with what was happening. I knew that 70,000 Montanans were without access to affordable health care, but I wasn’t sure exactly why. This is the reason I wanted to write about the Coverage Gap today. I think most of us could have a better understanding of this issue.

Under current Montana law, an individual qualifies for Medicaid if he or she is a low-income child, parent of a Medicaid eligible kid, former foster child, a pregnant woman, a woman with breast or cervical cancer, or a disabled adult. Otherwise healthy childless adults, no matter how small their income, currently can’t receive Medicaid in Montana.

When the Affordable Care Act (ACA) passed in 2009, it required all states to expand Medicaid to include people with household income up to 133% of the federal poverty level — about $16,000 for a single person, about $27,000 for a family of three. The federal government would pay the bill entirely for the first three years and then gradually phased back to a 90% contribution.

Then the ACA was challenged in the Supreme Court. The Court ruled that it was unconstitutional to require the states to expand Medicaid. It had to be optional. Since then, 26 states expanded Medicaid and 24, including Montana, haven’t yet.

This created a problem. As the ACA was written, people who make above 100% of the FPL qualify for a variety of cost reductions to buy private health insurance on the marketplace/exchange. This is how people are getting health insurance for $25 a month in some situations. Those below 138% would qualify for Medicaid, and everyone would be covered. But when Montana and other states didn’t expand, we ended up with this Coverage Gap.

There are 70,000 people in Montana who would qualify for Medicaid under expansion – veterans, home health care workers, child care workers, and others. Of those, 50,000 are in the gap – Montanans with the lowest income who are receiving no help to buy insurance. The other 20,000 are just over the poverty line — from 100 to 133 percent of poverty. They can go into the new exchanges and get a subsidized health insurance policy. But the poorest, whom Congress thought they had covered with Medicaid, have nothing.

Simply put, they make too much to qualify for Medicaid under current law and too little to qualify for reductions in health care premiums. And don’t forget “too much” isn’t much at all –   these are people making less than $16,000 per year.

No Montanan should be left in the gap. We’ll keep you updated as Montana looks for ways to expand Medicaid and ensure all Montanans have access to quality, affordable health care coverage.

I hope you will check back each Wednesday for more wonky words. If you have suggestions, email me at tjensen@montanabudget.org or post something to our Facebook page.

Montana Budget & Policy Center

Shaping policy for a stronger Montana.

MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.