As Health Law Moves Forward, More With Low-Incomes Gaining Medicaid Coverage

In recent days, several prominent Republican governors have indicated that they will expand their state Medicaid programs to cover people who have incomes up to 138 percent of the federal poverty level, a major victory for low-income people with disabilities. In addition, the Department of Health and Human Services has just released regulations governing the essential health benefits that all individual and small group health insurance plans must offer as part of the new health care law.

When Congress passed the Affordable Care Act, also known as Obamacare or the universal health care law, in 2010, the law required all states to expand their Medicaid programs to cover people who have incomes up to 138 percent of the federal poverty level, which in 2013 would mean an income of $15,856.20 for an individual. This Medicaid expansion would allow low-income Americans, including working people with disabilities, to receive affordable, comprehensive health insurance from Medicaid instead of having to purchase health insurance via the private marketplace or through a state or federal health insurance exchange. (The exchanges are still being set up.)

A coalition of business groups, private citizens and state attorneys general challenged the Affordable Care Act in court, alleging that it exceeded the scope of Congress's powers. Last year, the U.S. Supreme Court upheld the majority of the law, but it struck down the provision requiring states to expand their Medicaid programs. As a result, states can either leave their Medicaid programs as they are or expand the programs as originally required by the Affordable Care Act. In states that choose to expand, the federal government will pay for the full cost of Medicaid benefits for newly eligible beneficiaries through 2016, at which point the federal government's share of the cost will drop incrementally.

Twenty-five states have already indicated that they will expand their Medicaid programs and 14 states have refused to offer expanded coverage. (To see an interactive map of which states are going to participate in the expansion, click here). Recently, Governor Rick Scott of Florida, a fierce opponent of the Affordable Care Act, accepted Medicaid expansion, and he was followed by another Republican governor, Chris Christie, in New Jersey.

In addition to the Medicaid expansion, the U.S. Department of Health and Human Services has recently released rules governing the essential health benefits that every health insurance plan in the individual and small group market must offer. The essential benefits include mental health care and prescription drugs, along with rehabilitative services and devices. The new regulations, which are described here and can be read in full here, ensure that people with disabilities will receive the coverage that they need from private health insurers without being subject to price discrimination.