Unaware of Free Care?

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Throughout the health-care reform battle of 2009 and 2010, a major topic of debate was how to expand insurance coverage to people who currently lack it. Expanding coverage, in fact, was one of the three major goals expressed by the Democratic sponsors of the bill that became law, in addition to lowering costs and improving quality of care. Sometimes lost in the arguments surrounding insurance coverage expansion, however, is a troubling fact: A vast number of people who already qualify for free or heavily discounted health insurance fail to sign up.

As a recent article in Slate magazine notes, 40% of Americans who qualify for Medicaid — the nationwide state-administered health insurance program for the poor — are not enrolled, according to a recent study published in the New England Journal of Medicine. Many of these people may be simply unaware of their eligibility for the program. But as the article notes, some states make little effort to enroll those eligible for Medicaid and even have policies that serve to discourage enrollment, such as an elaborate reapplication process every six months or every year. This may be because each state must pay for a fixed percentage of Medicaid coverage; the rest is paid for by the federal government. The percentage paid by states varies from state to state based on a formula, but in recent years it has been as high as 50% in some states (in 2010 it is below 40% in all states). States can therefore save money by enrolling fewer people in the program. A 2007 study in the journal Health Affairs found that among uninsured children who were eligible for either Medicaid or the State Children’s Health Insurance Program (SCHIP), 42% had actually been enrolled the previous year but had been dropped from coverage. This percentage had risen steadily since 2000, possibly indicating that the reapplication process became more difficult over this period. (The study did not explore why coverage was dropped.)

One way the health-care reform act signed by President Obama earlier this year aims to expand insurance coverage is by extending Medicaid to families earning less than 133% of poverty-line income, in every state. Since under the new law the federal government will pay nearly the full cost of this eligibility extension, it might seem like states would have no conceivable reason to resist expanding their enrollment. But, in fact, many states are suing to stop Medicaid extension under the law, because it requires them to make applying easier in a number of ways. This means that especially in states with currently low enrollment rates, there will most likely be an increase in applications from people who were eligible for Medicaid before the health-care reform law — and for whom the state will therefore have to pay a large chunk of the bill.

What do you think — is it acceptable for states to resist efforts to expand health-care coverage for the poor, when they are required to pay part of the price? Should the federal government pay the entire price to eliminate this conflict? Should children — or adults — on Medicaid or SCHIP have their coverage renewed automatically instead of being dropped if they fail to reapply? Are Medicaid and other free or discounted health insurance programs well promoted in your state? If you have applied for a public health insurance program, were you satisfied with the process and the outcome? Leave a comment below!

For a list of current state-based programs to cover the uninsured, click here.

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