Due to a rather unnoticed change the new health care law will makes Social Security benefits no longer count as income for determining Medicaid eligibility, a large number of people who take early Social Security benefit will qualify for the Medicaid expansion in the Affordable Care Act. From AP in the Washington Post:
The actuary’s office said the 3 million early retirees who would become eligible for Medicaid are on top of an estimated 16 million to 20 million people that Obama’s law would already bring into the program, by opening it to childless adults with incomes near the poverty level. Federal taxpayers will cover all of the initial cost of the expansion.
In theory a couple both over the age 62 could be bringing a total of $64,000 a year, including Social Security benefits, and still qualify for Medicaid but most that will gain Medicaid as a result of this accounting change will likely be American between 62-65 with very modest incomes that don’t have jobs which provide good insurance.
Overall given my deep skepticism towards the private insurance exchanges created by ACA, I consider this fairly good news. It is not an ideal solution but from my perspective the fewer people forced to pay large shares of their income for extremely inefficient private health insurance the better.
While the article makes it clear Medicare chief actuary Richard Foster is concerned about the situation and that the change could eventually start hurting state budgets, the new rule seems unlikely to be revisited.
To begin with, Democrats have no desire to re-examine the unpopular ACA right now.
More importantly, there is unlikely to be much industry pressure to change it. The private insurance companies that will use the new exchanges, partly as the result of the age rating rules, will have little desire to cover these older and likely much sicker individuals. These are after are likely older people who are probably less able to physically work and less likely to have had good insurance before turning 62. Without a big financial interest seriously pushing for change, inaction is sadly Congress normal response to almost anything at this time.
Finally, by putting these early retirees in Medicaid it will not only get them cheaper coverage but by removing them from the risk pool it should also slightly reduce premiums for everyone else using the exchanges. I suspect Democrats are likely to see that as a political benefit in trying to sell the unpopular law as it goes into effect.