Its “coverage gap” leaves some low-income Americans uncovered and subject to fines.
The Supreme Court ruled in 2012 that states were allowed to decide for themselves whether or not to expand Medicaid under Obamacare. The question of expanding Medicaid in Florida has been a long-running political fight between the GOP-led state house and senate, and now it is spreading to include Governor Rick Scott’s administration. The wrangling will likely cause an extended legislative session as the Obama administration insists on offering certain federal health-care funds only to states that expand the entitlement. This is just one of the many distortions and other problems brought on by Obamacare’s massive federal intrusion into states’ health care.
Five years ago, nobody thought Obamacare would create a situation where someone with annual earnings around the price of a used car would have to prove to the Internal Revenue Service that they cannot afford health insurance, or else pay a fine. Fortunately, the Supreme Court’s decision in King v. Burwell, expected in June, may provide a much-needed political opening to address the consequences of the 2010 health-care law on the poor, and perhaps offer states a way out of the Medicaid-expansion dilemma.
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About 4 million Americans, according to the Kaiser Family Foundation, are caught in the “coverage gap.” Squeezed out of securing affordable health-care coverage, individuals whose incomes fall between about $10,000 and $12,000 a year do not qualify for tax subsidies on the federal government’s health-care exchange, nor (in 22 states) are they eligible for Medicaid. How could a law intended to make health care affordable ignore the very people who need help the most?
In my home state of Florida, there are 669,000 people in this coverage gap. It is a constant concern for staff, volunteers, and residents at our homeless shelter and substance-abuse facility. Each year, we help some 1,500 people hoping to escape poverty and addiction. Nearly all of them are trapped in the gap, which means the only medical attention they may receive is from first responders or emergency rooms.
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But it gets worse. They also face at least a $95 penalty, officially referred to as the “shared responsibility payment,” for not buying unaffordable health insurance. That is money that could otherwise pay for clothes for a job interview, transportation, or a cell phone as they transition out of our program. Our organization, which receives no government funding, has enlisted CPAs to help our residents fill out complicated IRS forms to avoid these fines. Tax-code compliance should not be their priority right now, or ours.
“I’m just not financially in a situation to afford health care, much less get a fine for it,” said one of our residents in the substance-abuse treatment program on a local TV news program during tax season.
#related#Responding to these concerns in the same segment, White House press secretary Josh Earnest blamed Florida politicians for not accepting “free” Medicaid. That sounds like a deal, but what Earnest does not mention is that if Florida accepted the money, its budget would have to fill untold billions of dollars after 2017, when federal funding starts to taper off. On the other hand, if Florida does not expand Medicaid, it will forfeit $2.1 billion in federal funding for hospitals treating uninsured patients.
Congress can step in and fix the law and get ahead of the King v. Burwell decision, which may fundamentally alter Obamacare (as did the Supreme Court’s 2012 decision in NFIB v. Sebelius allowing states to refuse Medicaid expansion) while also helping Florida find a way out of its impasse.
A number of policy proposals would reduce government complexity and compliance procedures and enable market reforms to lower insurance rates. One of these, the so-called “freedom option,” would allow individuals to opt out of Obamacare and eliminate the individual-mandate penalty. Advanced by former Texas senator Phil Gramm, this proposal would let anyone buy health insurance from any willing seller.
This would solve two problems for our residents. The first is that premiums in Florida average around $300 per month for the typical plan available on the federal health-care exchange, an unrealistic price for people trying to get out of homeless shelters. Second, letting the market determine prices would free our residents to buy affordable catastrophic coverage, which is the safety net they do not have now.
Congress can seize the initiative in addressing the needs of the poor. Most homeless people are not well positioned to seek professional tax advice, and when they find employment, shelling out dollars on “silver plans” on government health-care exchanges is financially impossible.
Next year at this time, many of us in Florida hope we’ll be able to return to core missions like helping people escape poverty and substance abuse and balancing budgets based on reliable federal funding formulas, and will no longer be dealing with the aftermath of an ill-conceived law.
— The Reverend Vann R. Ellison is president and CEO of St. Matthew’s House, based in Naples, Fla.