Medicaid expansion under the new healthcare law- Will it work? « Health Insurance Advisory

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new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

In this section of the site, you can also obtain the following information specific to your state: available medical insurance options, efforts to regulate medical insurance premiums, healthcare, the individual medical insurance marketplace and the new healthcare law.

Our objective is to help Americans make sense of the new healthcare law by explaining key provisions in plain English and assisting individuals, families and the self-employed in using this information to find and secure affordable medical insurance.

Medicaid expansion under the new healthcare law- Will it work?

Author: Allan Z - Founder Editor | Dec 14 2010 | Medicaid & Medicare - New Healthcare Law

The success or failure, to a large degree, of the new healthcare law will hinge upon the objective of expanding major medical insurance to cover Americans who are currently uninsured with the ultimate goal of improving the access to care, according to the New England Journal of Medicine.

The Patient Protection and Affordable Care Act (PPACA) incorporate two strategies for extending major medical insurance to the uninsured. First, all individuals are required to purchase major medical insurance. This is referred to as the “individual mandate.”  State-based insurance “exchanges” and subsidies will be established to help individuals whose incomes are below 400% of the federal poverty level to purchase major medical insurance from private companies.

Second, Medicaid will be expanded. Underwritten by the federal government, this medical insurance program covers adults whose family income is below 133% of the federal poverty level; children of families with incomes below this cutoff are already eligible for public coverage.

Estimates from the Congressional Budget Office (CBO) suggest these two approaches will add 16 million enrollees for a total of 32 million newly insured Americans. There is cause for concern, however, due to the uncertainty surrounding the numerical estimate of  individuals who will obtain medical insurance through the exchanges. Debate is already under way about the effectiveness of the mandate, what constitutes a sufficient subsidy, and how the exchanges will be implemented.

By comparison, the effect of the Medicaid expansion appears to be easier to predict because expanded coverage will be free to the states (at least through 2016) and to uninsured persons whose income qualifies them for it.  As a result, it is believed that almost all individuals who are eligible will enroll. But eligibility for medical insurance does not always translate into actual enrollment, as evidenced by the millions of uninsured adults who are already eligible for Medicaid under the current law.

The impending Medicaid expansion will be the biggest change to the program since its inception in 1965. The success of the new healthcare law in improving access to care will largely depend on whether newly eligible individuals enroll in Medicaid and remain enrolled.  Greater demand is put on the healthcare system as more individuals obtain major medical insurance.  Though the details of enrollment outreach, application processes, and renewal procedures may not be glamorous, they hold the key to success in expanding health insurance to millions of needy Americans.

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