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Medicaid for middle class? Yes, for now

Health law detail has US analysts, officials worried

PROGRAM EXPANSION Senator Orrin Hatch said he intends to look into a health law change that excludes Social Security income from Medicaid eligibility. PROGRAM EXPANSION
Senator Orrin Hatch said he intends to look into a health law change that excludes Social Security income from Medicaid eligibility.
By Ricardo Alonso-Zaldivar
Associated Press / June 22, 2011

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WASHINGTON — President Obama’s health care law would let several million middle-class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed.

The change would affect early retirees: A married couple could have an annual income of about $64,000 and still get Medicaid, said officials who make long-range cost estimates for the Health and Human Services department.

Up to 3 million more people could qualify for Medicaid in 2014 as a result of the anomaly. That is because, in a major change, most of their Social Security benefits would no longer be counted as income for determining eligibility. It might be compared to allowing middle-class people to qualify for food stamps.

Richard Foster, Medicare chief actuary, says the situation keeps him up at night.

“I don’t generally comment on the pros or cons of policy, but that just doesn’t make sense,’’ Foster said during a question-and-answer session at a recent professional society meeting.

“This is a situation that got no attention at all,’’ Foster said. “And even now, as I raise the issue with various policymakers, people are not rushing to say . . . we need to do something about this.’’

Administration officials said yesterday they agree there is a problem. “We are exploring options to address this issue,’’ said Richard Sorian, Health and Human Services spokesman.

White House officials and senior Democratic lawmakers initially defended the change, saying it was not a loophole but the result of a well-meaning effort to simplify the rules for deciding who would get help under the new health care law. Instead of a hodgepodge, there would be one national policy.

But Senator Orrin Hatch of Utah, the ranking Republican on the Senate Finance Committee, called the situation unacceptable and said he intended to look into it.

States have been clamoring for relief from Medicaid costs, complaining that just these sorts of federal rules drive up spending and limit state options. The program is now one of the top issues in budget negotiations between the White House and Congress. Republicans are pushing for a rollback of federal requirements that block states from limiting eligibility.

Medicaid is a program that serves more than 50 million vulnerable Americans, from low-income children and pregnant women to Alzheimer’s patients in nursing homes. It is designed as a federal-state partnership, with Washington paying close to 60 percent of the total cost. Early retirees would be a new group for Medicaid. While retirees can now start collecting Social Security at age 62, they must wait another three years to get Medicare, unless they’re disabled.

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