Monday, January 13, 2014

Just what has a single mother of three lost in Wisconsin's Medicaid "expansion"?

Today's New York Times has an illuminating contrast of how one-party rule is changing life in the "twinned cities" of Duluth, MN (Democratic) and Superior, WI (Republican). The article's finale focuses on how the Affordable Care Act affects people in Minnesota, which runs its own exchange and is implementing "an expansion of the state’s already far-reaching Medicaid system," and Wisconsin, which declined to run its own exchange and has just won federal approval for a conditional Medicaid expansion, which will offer Medicaid to childless adults earning less than 100% of the Federal Poverty Level (FPL) while at the same time ending existing Medicaid coverage for adults who earn more than 100% FPL*, pushing them onto the exchanges**.

Times reporter Monica Davey found a single mother of three in Superior, WI in the latter category, newly booted off Medicaid because she earns over 100% FPL. Her situation is doubly ironic, in that she works for a nonprofit that serving homeless people -- including helping them sign up for Medicaid -- but is herself a Republican and supporter of Scott Brown Walker. That is perhaps why she has not fully checked out her own options -- which have indeed been worsened by Walker's some win/some lose Medicaid shift, but not as badly as she may think.  The Times article did not delve very deeply into her options  -- so we'll fill in the gap below. Here's the situation:

For Ms. Gradine — a 41-year-old mother of three children under 20 earning $32,557 a year and receiving some child support — the Wisconsin-Minnesota divide is stark. If she lived in Minnesota, officials there say, she would be eligible for that state’s newly expanded coverage for the working poor, which would require her to pay a $21 premium each month. As a resident of Wisconsin, however, Ms. Gradine will need to buy private insurance, though experts say she may qualify for federal subsidies that will reduce her monthly premiums.

Ms. Gradine, who describes herself as a Republican and whose refrigerator bears a snapshot of her wearing a “Scott Walker” sticker, so far has not signed up for insurance. She knows she needs it — she has tendinitis in her right arm and abdominal adhesions — but she also says the federal online insurance marketplace seems confusing and time-consuming.

“It might be simpler to just move over to the Minnesota side,” Ms. Gradine said. But her children are settled, she said, with friends and teachers and activities in Superior. “If we come to a place where we have to cross that bridge for good, I would look at that,” she said. “But I’m not there yet.”
The first thing to recognize about Ms. Gradine's situation is that her kids will be eligible for the Children's Health Insurance Program (CHIP), so she will be buying insurance for herself only.  That actually doesn't help her as far as her monthly premium goes, since at any given income level under the ACA the premium is subsidized above a fixed percentage of income. But it does help with out-of-pocket costs, which are minimal-to-nonexistent under CHIP.  

Second: if Ms. Gradine's income with child support included is under $58,875 she will be eligible not only for a premium subsidy but for subsidized out-of-pocket costs (and a larger one if her income is under $47,100). If her income is $41,000 she will pay a $162 per month premium for the cheapest Silver plan on offer in Douglas County, Wisconsin -- while her deductible will be just $250 and her annual out-of-pocket (OOP) costs capped at $1,500.  If child support (or a raise) takes her income to $47,101, she loses the part of the latter subsidy, boosting the deductible to $2,000 and the OOP maximum to $4,000.

$21 per month is better than $162, and Ms. Gradine has doubtless been paying less on Medicaid than she will pay.on the exchange. For that hit to her income she can thank Scott Walker and the GOP legislature. But for the viable options and substantial support on offer to cover the loss, she should thank the reviled ACA.

* According to, a family of four in Douglas County, WI is eligible for Medicaid for the whole family if the family income is $22,372 or less. That is less than the federal FPL for a family of four, $23,550. In states that accept the ACA Medicaid expansion on terms that fully comply with the ACA, Medicaid eligibility extends to 138% FPL. 

** Because the Wisconsin Medicaid "expansion" does not comply with ACA conditions, Wisconsin forfeited ACA-level funding, thus necessitating the benefit cutoff for those over 100% FPL. The number of people newly eligible for coverage, estimated at 83,000, barely outstrips the number newly ineligible, 77,000.