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For those whose income is below the Federal poverty level, and are in a state where Medicaid has not expanded to cover them... why doesn't Obamacare just make exceptions for these people, and grant them subsidies? I mean the money for Medicaid is just lying there for that state right? Why not use that for subsidies for those in that state?

I really do not understand why this gap exists... It's completely bizarre to me.

Why even have a minimum for Obamacare? Just grant subsidies for those who can't get Medicaid... why these two separate systems Obamacare and medicaid, which leads to coverage gaps? why don't they work together to cover everyone... or have one system.

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    Do you understand the decisions from the Supreme Court regarding the expansion of Medicaid, and the associated limitations of Federal power?
    – Drunk Cynic
    Commented Dec 1, 2016 at 21:18

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The Affordable Care Act makes some effort to accommodate people who live in states that did not expand Medicaid. For example, people below the Federal poverty level but who live in states that have not expanded Medicaid may qualify for a hardship exemption from the individual mandate.

However, the real answer is that the authors of the law didn't expect states not to expand Medicaid. Originally, the Affordable Care Act made all state Medicaid funding contingent on expanding Medicaid. However, the Supreme Court ruled in National Federation of Independent Business v. Sebelius, 132 S. Ct. 2566 (2012), that this was unconstitutionally coercive, and struck down the portion of the law that would deny states funding. As such, many states chose not to expand Medicaid, even though the federal government would pay for almost all of this expansion.

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  • But that individual mandate just means they won't get a penalty for not getting insurance... Why not give subsidies to those who can't get medicaid for whatever reason, so that they can get insurance?
    – Ameet Sharma
    Commented Dec 1, 2016 at 21:02
  • How long would the Federal Government pay for the expansion; at what point would the state be responsible for the expanded costs?
    – Drunk Cynic
    Commented Dec 1, 2016 at 21:10
  • @AmeetSharma The law was originally structured so that they would be covered by Medicaid. Congress has refused to alter it since the court's ruling.
    – Publius
    Commented Dec 1, 2016 at 21:40
  • @DrunkCynic The government paid for 100% of the expansion's cost for the first several years, and then 90% of the cost for all remaining years.
    – Publius
    Commented Dec 1, 2016 at 21:40
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    @DrunkCynic I'm a bit surprised that this was a point needing elaboration, but I have added a link to a study discussing the economic impact of medicaid expansion on the states.
    – Publius
    Commented Dec 2, 2016 at 8:09
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Since they passed Obamacare on a purely partisan basis, they haven't been able to pass modifications of it since Scott Brown entered the Senate. So one answer is that they simply haven't been able to do tweaks like this legislatively. They'd have had to find a way to implement this purely within the existing law, but the Supreme Court is already critical of the law and of executive overreach. Note that Medicaid expansion was original mandatory until the Supreme Court said that the federal government lacked that authority.

Another issue is that there isn't enough money. The basic structure is that the rich and the upper end of the middle class pay for their own insurance (subsidized by a tax deduction). The lower end of the middle class receives subsidy payments for Obamacare insurance, but they still pay part of the cost. At the bottom end, the idea was that Medicaid was supposed to cover those who simply don't have money enough to contribute towards buying insurance. Medicaid's lousy coverage, but it starts with the first dollar.

The subsidy at that level simply isn't enough to allow the working poor to afford the deductible on an Obamacare bronze plan. The typical Obamacare plan is effectively catastrophic, high deductible coverage. So for most expenses, the answer is that under Obamacare, the individual pays. After that runs out is when coverage starts. But that's not the kind of coverage that the poor need. They need help with any health care expense. People living paycheck to paycheck can't afford the deductible amount. So even if the subsidy were high enough to cover the entire premium (not necessarily true), it's not enough to provide actual help.

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    I'd need a citation for the "typical Obamacare plan is catastrophic coverage". I recall that one of the big arguments for Obamacare was to get rid of the catastrophic plans that insurance companies were offering as they were bad deals for consumers in the first place.
    – user1530
    Commented Dec 2, 2016 at 13:50
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    "It's lousy coverage" - what is that based on? When I was on it, it was coverage at the same HMO that I had used when employed by a health insurance company (so,"cadillac" plan), fully covered, so the coverage was actually quite excellent.
    – PoloHoleSet
    Commented Dec 2, 2016 at 15:01
  • Also, blip has a point - catastrophic coverage is only available to a very specific subset of the population, so it's not the typical plan. If you want to make the argument that deductible and co-pay levels are so high that it may as well be catastrophic coverage, that's a different point, but that's true for the trend in plans, in general, going back many years as employers try to push more and more of the rising health cost expenses onto the employees/insured.
    – PoloHoleSet
    Commented Dec 2, 2016 at 15:02
  • @blip I added a citation showing that Obamacare is high deductible. Remember that Obama broke most of his campaign promises with Obamacare: no individual mandate, keep your existing plan, lower premiums. After all, who would like more realistic promises like every cheap plan eliminated and slower premium increases on more expensive plans? The other problem is that in order to control premium costs, they've been increasing the deductibles. So previous low deductible plans are now high deductible, catastrophic coverage plans.
    – Brythan
    Commented Dec 2, 2016 at 19:42
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    @brythan, no he didn't break his promises. His plan got gutted by congress. An important detail, IMHO. As for high deductible, that's not exactly the same as catostrophic coverage. There is one catastrophic plan available, however, but only available to a select group (essentially young and healthy people) but it provides more coverage than the catastrophic plans that used to be offered...which were riddled with coverage loopholes.
    – user1530
    Commented Dec 2, 2016 at 20:07

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