Big Medicaid gap looms in Obama health care law

WASHINGTON (AP) — Nearly 2 in 3 uninsured low-income people who would qualify for subsidized coverage under President Barack

Obama's health care law may be out of luck next year because their states have not expanded Medicaid.

An Associated Press analysis of figures from

the Urban Institute finds a big coverage gap developing, with 9.7

million out

of 15 million potentially eligible adults living in states that

are refusing the expansion or are still undecided with time

running short.

That a majority of the neediest people who

could be helped by the law may instead remain uninsured is a predicament


by Obama and congressional Democrats who designed a sweeping

extension of the social safety net. The law's historic promise

of health insurance for nearly all U.S. residents would not be

fulfilled as envisioned.

It's the direct consequence of last summer's Supreme Court decision that gave states the right to opt out of the Medicaid

expansion, combined with unyielding resistance to the law from many Republican state lawmakers.

Expanding Medicaid is essential to Obama's two-part strategy for covering the uninsured.

Starting next year, middle-class people

without job-based coverage will be able to get tax credits to help them

buy private

insurance. But the law calls for low-income people to enroll in

Medicaid, expanded to accommodate a largely excluded group:

adults with no children at home. Expanded Medicaid would cover

about half the 25 million to 30 million people who could be

helped by the law.

Twenty-three states and the District of Columbia have decided to accept the expansion, which is fully financed by Washington

for the first three years and phases down gradually to a 90 percent federal share.

Among those are six states led by Republican governors. But the majority of low-income Americans newly eligible for Medicaid

under the law live in states such as Texas, Florida and Georgia, where political opposition remains formidable.

"Because of the Supreme Court's decision

making Medicaid expansion optional with the states, we're going to see

some pretty

significant differences in this country from one place to another

in terms of access to health care and access to health insurance,"

said Gary Cohen, the Health and Human Services official overseeing

the rollout of the law.

Speaking this past week at the Brookings

Institution, Cohen added: "We are going to have an opportunity ... to

take a look

at that in a year and see what difference it made, the choices

that were made at the political level to do one thing rather

than another.

"And that's going to be a pretty profound difference and a pretty profound choice that we get to make every couple of years

about what kind of country we want to be," Cohen continued.

Elections for state offices and Congress will be held next year.

Republican state lawmakers continue to

oppose the expansion for several reasons. Many believe Medicaid has too

many problems

already. Others worry that Washington will renege on financing,

and some believe health care is an individual responsibility,

not a government obligation.

"It's an ideological principle piece to us

on the conservative side," David Gowan, Arizona's Republican House

majority leader

said recently. "We don't believe in the expansion of Medicaid

itself. ... We don't believe it's the government's duty to do

that." Gov. Jan Brewer, also a Republican, succeeded in getting

the Arizona Medicaid expansion through the Legislature but

now faces the possibility of a referendum to block the law.

GOP health policy expert Gail Wilensky says

she did not expect so many states to turn down the Medicaid expansion.

While critical

of some main features of the Affordable Care Act, Wilensky

believes it's important for the country to get uninsured people


"For me, it is really is quite surprising —

particularly in the years with 100 percent federal funding — that so

many states

are saying 'no,'" Wilensky said. "This is depriving the poorest of

their citizens of an important benefit." Wilensky ran Medicare

and Medicaid during the George H.W. Bush administration.

The AP's continuing check of the states

finds 18 not expanding and nine where the outcome is still undecided.

The biggest

states where the expansion is stymied are Texas, with 1.7 million

potentially eligible residents; Florida, with 1.3 million,

and Georgia, with more than 680,000.

Still trying to find a path forward are Michigan and Ohio, whose Republican governors support the expansion but face legislative

opposition. Each has more than one-half million potentially eligible residents, according to the Urban Institute, a public

policy research center.

Health and Human Services Secretary Kathleen Sebelius says she hopes that holdouts will have a change of heart.

"The door is open," said Sebelius. "If a legislature decides to reconvene at the beginning of January, and change their law,

then we would welcome them in."

There is no deadline for states to decide. Next year states will have an opportunity in each calendar quarter, and if they

later want to drop out they can do that.

Low-income residents of states refusing the expansion will be exempted from tax penalties for being uninsured. Those penalties

also take effect next year, when virtually everyone in the country will be required to have health insurance.

Medicaid already covers more than 60 million people, including many elderly nursing home residents, severely disabled people

of any age and many low-income children and their mothers.

An earlier Urban Institute analysis of the expansion found that less than $100 billion in state spending could trigger nearly

$1 trillion in federal dollars over a decade.

As originally designed, the expansion was supposed to cover households making up to 138 percent of the federal poverty level,

about $15,860 for an individual or $32,500 for a family of four.

Under the law, Medicaid is the only coverage

option for people below the poverty line, $11,490 for an individual, or


for a family of four. The poor cannot get subsidized private

coverage in the new health insurance markets coming on line next


"This decision will have very real human

costs for the adults who are going to remain uninsured and their

families," said

Genevieve Kenney, co-director of the Urban Institute's health

policy center. "It seriously undermines the ability of the Affordable

Care Act to substantially reduce the number of uninsured in this

country, at least at the beginning."