Expanded health coverage for Washingtonians
The Affordable Care Act provides Washington state an opportunity to offer affordable health care coverage to 800,000 of the one million people in the state who are uninsured including vulnerable populations served by United Way funding: people experiencing homelessness, low income people, children, people with disabilities, and the elderly. Expanding coverage will take public will as well as money.
The Affordable Care Act passed by Congress in 2010:
- Gives states an opportunity to expand Medicaid coverage to those adults not currently eligible with incomes up to 138% of the federal poverty level (roughly $25,000 for a family of three). In the past, Washington has covered all low income children and some low income parents, pregnant women, people with disabilities and seniors.
- Changes the way Medicaid services are administered and delivered by having services coordinated out of a health care home where medical care is integrated with prevention and mental health care
- Encourages states to establish a new vehicle–Health Benefit Exchanges–where individuals (and businesses) can purchase health insurance. The Exchange offers income-based, sliding scale subsides for premiums and other costs to those individuals and families who have incomes between 100% and 400% of the federal poverty level. The Exchange is not available to people with incomes below 100% of federal poverty.
- Allows for the Federal Basic Health program, an option that states can choose starting in 2014. It is designed to serve people who will earn too much to qualify for Medicaid under the new health care reform law but who may still struggle to afford insurance in the exchanges – even with the help of tax credits available in the Exchange.
Funding the Medicaid expansion will be a major issue on the federal and the state level as the federal government will pick up 100% of the cost of expansion for the first three years and taper down to 90% by 2020 and states will cover more Medicaid eligible clients.
From the federal perspective, one way to fund health care reform is to control health care costs. A new study by the Institute of Medicine’s 18 member panel of prominent experts reports that health care wastes 30 cents of every dollar on unneeded care, outdated paperwork, fraud and other waste. According to the report, the projected $750 billion annual waste is equal to more than ten years of Medicare cuts in Obama’s health care law. It’s more than the Pentagon budget and more than enough to care for the uninsured. Controlling health care costs that are increasing at a greater rate than inflation is one of the keys to reducing the federal deficit.
On the state level, Medicaid expansion will bring federal dollars to the state, add jobs and increase business activity but it will also come with costs as it covers over 300,000 new people under Medicaid expansion and subsidizes premiums and other costs for low income people under the Exchange. However, there are some cost savings. For instance, federal dollars will replace state funds that currently support Basic Health and Disability Lifeline. Currently, the state pays 50% of the costs of coverage for nearly 50,000 Washingtonians.