By Julian Pecquet - 07/13/11 06:16 PM EDT
A freshman member of the House Budget Committee is working on legislation that would prevent millions of Americans from becoming eligible for Medicaid and federal insurance subsidies.
Rep. Diane Black (R-Tenn.) said Wednesday that she plans to introduce a bill next week that would change how the healthcare-reform law calculates who is eligible for government help. The formula has received criticism from Republicans since The Associated Press reported that it excludes Social Security payments, making up to 3 million early retirees eligible for Medicaid starting in 2014.
Medicare actuary Rick Foster said he agreed with her intent.
“I try to stay out of policy issues,” Foster told her, “but I think this is one where a change is in order.”
The unintended consequence of letting middle-class Americans qualify for Medicaid has received the brunt of attention. But Foster said Wednesday that changing the law also would impact the law's insurance subsidies for people who make more than the Medicaid cut-off point of 133 percent of the federal poverty level.
In order to avoid any gaps between Medicaid and the insurance subsidies, the law creates a single formula for calculating people's revenue. Changing that formula to make it harder for people to qualify for Medicaid also would make it harder for people to qualify for the sliding-scale subsidies in the law, he said. Some people would get fewer subsidies than they otherwise would, while others would make more than 400 percent of the FPL and thus would not qualify for any subsidies at all.
“You would use this changed definition for both Medicaid and the exchanges, so you still have a seamless transition,” Foster told The Hill. “Clearly there's an impact [on the exchange subsidies] because [under current law] people look [as if they have] lower income than they really [do] — and they qualify for a higher subsidy."
The Obama administration has said it favors fixing the formula.