Walter Gregg (Walt.Gregg.Juneau.AK.US) Walter Gregg (Walt.Gregg.Juneau.AK.US)
June 2016. Healthcare.Gov is not the answer if your income is too low. Here in Alaska, a single making less than about $20,000 a year is not eligible for an ACA subsidy. Only people making more can get a subsidy. How's that for a screwed up government program?
For a 60 year old single in Alaska, the cheapest unsubsidized ACA policy now runs over $14,000 a year and doesn't actually pay your bills. You still have to pay the first $6,500 of medical expenses out of pocket.
This is clearly why Governor Walker expanded Medicaid. Given the cards he was dealt, there was no other lawful method to ensure that people whose income falls in the pothole -- not rich enough for a country club subsidy but too rich for traditional Medicaid -- could still get medical care now.
Fair disclosure: I now have Medicaid coverage. The alternative wasn't actuarially sound. What is odd is that Medicaid is not charging me anything currently. I had been paying an insurance premium plus virtually all of my own medical expenses, well over $10,000 a year. Can it be true that as long as I draw less than $20,000 a year out of my IRA Alaska Medicaid will give me free medical care, while working families are stuck with subsidized insurance and pay the first $6,500 of their bills? Or is Medicaid like a charge account?
Medicaid may be like a charge account. The state can now seize my home. Well, strictly speaking, they can seize it after I'm dead, and sell all my personal effects as well. As I understand it, Alaska currently does not actually do this except for long-term care related costs and hospitalization related thereto. That seems to be what the actual regulations say. But the language on the application isn't nearly so reassuring:
"Can the State of Alaska take my estate? The estate of an individual age 55 years of age or older who received Medicaid benefits may be subject to a claim for recovery." This includes "...reimbursement of services received while the recipient was in a medical institution, including a nursing home or other medical institution, or was receiving home- and community-based service. ... the State of Alaska may place a lien on a recipient's home."
Other medical institution? The local hospital cost about $40,000 a month back in 1992. I don't think I want to know how much it would cost today. With major medical, once out of pocket some maximum, commonly $10,000, it would be 100% covered. With the state's language on the form, it's Katie bar the door. And regulations can change overnight.
Currently, one state charges the estates of Medicaid recipients over 55 an astounding $40,080 a year just for being signed up. It doesn't matter if you aren't using the care, being signed up is all it takes. And federal law lets all states do this.
There might be a constitutional problem with this, but it might be hard to sue until after you're dead. At least for the expansion group, Medicaid is not voluntary. You're required by law to have insurance if you're eligible, backed up with severe tax penalties. It can't be equal protection for two people similarly situated, compelled by law to have insurance, where the one earning $1,000 a year more gets an ACA subsidy and never has to pay a penny back, and the one earning $1,000 a year less gets Medicaid and may lose their entire estate. But if they don't seize your property until after death, during your lifetime have you suffered an actual injury sufficient to sue for redress? There's been little media coverage of this aspect of the ACA and the dilemma it makes people face. I've only found a handful of links, such as:
It would be nice if politicians understood how impossible financial planning is when they keep arguing over rules instead of fixing such devastating traps. I finally concluded that for my situation applying for Medicaid now would plug by far the biggest leak in my limited retirement savings. But I'm afraid to drop my grandfathered Premera Blue Cross policy. What if the courts allow the appeal by certain legislators still trying to overturn Governor Walker's Medicaid expansion? What if they win? What if Alaska implements full estate recovery? I couldn't get the grandfathered policy back. I certainly couldn't get the ACA policy. Without a subsidy my low income bars, it costs more than twice as much and has a has a higher deductible. I'd end up with no insurance at all.
Medicaid is now a compulsory single-payer insurance system for many. If we don't have other coverage and our income falls into the above-mentioned pothole then we are required by law to sign up. So it would really help if legislators everywhere would stop suing for this or that, stop trying to defund this or that, and instead start figuring out how to build stability and equal treatment into the system. It might be a start for Uncle Sam to create a new compulsory Medicaid expansion group: state legislators. If they had to live with this scheme they'd grasp the problem of a mandatory system whose rules, funding, and very existence changes with the wind.
With this open-ended estate recovery thing, my stomach hurts just as much as if I had no insurance at all. It makes me wonder if opting out would actually be healthier.