The state-based insurance exchanges are set to open next year under the Affordable Care Act. Although plenty of Americans will finally be able to buy affordable insurance, it’s likely that millions, mostly low income workers, will still be stuck without insurance.
If the goal of Obamacare was supposed to be insurance for all, what gives?
Twenty-one states have chosen not to expand Medicaid. This means that mostly low-income adults won’t be eligible for Medicaid or for the premium subsidies in the state exchanges. According to the Urban Institute, by 2016, 4.9 million people will not be covered if the states forego Medicaid expansion.
Initially, the Affordable Care Act stated that all adults with incomes below 138 percent of the poverty level were to be covered by Medicaid. For adults earning between 138 percent and 400 percent of the poverty level, federal subsidies would be provided to offset the cost of purchasing insurance.
A 2012 Supreme Court ruling left the decision to expand Medicare up to the individual states, and only 23 chose to do so. Without the Medicare expansion, Obamacare can’t work as intended. The ACA law does not allow those who fall below the poverty level to obtain subsidies if their state doesn’t expand Medicaid. Since they are ineligible for state exchange subsidies, the folks in these states won’t be charged a penalty for not carrying insurance.
The Wall Street Journal estimates that by 2016, a single person earning $25,000 per year will be saddled with a $695 annual penalty.