Written by Carrie Johnson (former SDSU Extension Family Resource Management Specialist).
The topic of Medicaid Expansion has been in the news a lot again lately. When the Affordable Care Act (ACA) was enacted, the State of South Dakota decided not to expand the Medicaid program. The SD Legislature is looking at the possibility of now expanding the state’s Medicaid program. Politics and state economics aside, let’s take a look at how this could impact some low-income people.
Subsidies for Individuals/Families
There are two forms of subsidies for individuals/families through the ACA. The first is a tax credit to assist in paying of premiums while the second is for cost sharing to help lower deductibles and copayments. However, these subsidies are designed for moderate income individuals. Those who fall below 138% of poverty do not qualify for these subsidies. Without Medicaid Expansion they fall in what is called the “coverage gap”. Affordable options are not available.
The image below from the Kaiser Family Foundation shows how the coverage gap works. By expanding Medicaid in SD, it has been estimated that an additional 55,000 people in the state would be able to obtain affordable health coverage.
When my dad got cancer he was unable to work. He had worked for the same family owned business for 30 years and they did not have a sick leave policy. So, when he couldn’t work anymore he had nothing to fall back on.
He was extremely lucky that the company he worked for paid his health insurance premiums until he could start receiving disability benefits. Once he started receiving disability checks, he then “made” enough money to qualify for subsidies under the ACA. Without the kindness of the company he worked for my father would have fallen in the coverage gap. It would have put extreme strain on our family to try to pay high health insurance premiums, deductibles, copayments, and coinsurance while he was receiving treatment. With Medicaid Expansion this would not have been an issue because as a childless (at least no minor children) adult with zero income he would have qualified for Medicaid.