The $64,000 Question

June 22, 2011

A new report from the Associated Press scrutinizes yet another flaw in the health care law--- one that has received little attention despite its costly consequences. The story, "A twist in Obama's health care law," highlights a provision in the law, also discussed during an the Energy and Commerce Committee hearing earlier this year,--that "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."
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How did this happen?
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The health care law no longer counts Social Security benefits as income. So as the AP explains, "A married couple could have an annual income of about $64,000 and still get Medicaid."
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Members of the Energy and Commerce Committee asked the "government number cruncher," CMS Chief Actuary Rick Foster, about this same issue during a March 30 Health Subcommittee hearing. Foster confirmed, "With the strict definition of modified adjusted gross income then for most such people Social Security benefits would not count or not very much of them would count.-- That would potentially increase the number of Medicaid-eligible people under the expansion by 5 million or more."

What are the consequences?

This new group of Medicaid beneficiariesearly retireeswill now be able to retire at the age of 62 and collect Social Security while also using Medicaid as a bridge until they qualify for Medicare at the age of 65.

Medicaid is designed to provide our nation's most vulnerable citizens the health care they need. As a result of the new law's loopholes, married couples at nearly four times the federal poverty level will now qualify for Medicaid. Not only does it allow these couples to receive free health care, it bans states from adjusting their eligibility requirements.
The AP explains, "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. Some early retirees who worked all their lives may not want to be associated with a health care program for the poor, but others might see it as a relatively painless way to satisfy the new law's requirement that all Americans carry medical insurance starting in 2014."
What's the solution?

With a collective $175 billion budget shortfall, states are demanding the federal government give them more flexibility to manage their Medicaid programs. In order to protect care for those most in need, House and Senate Republicans responded to states' requests for more flexibility and introduced--the--State Flexibility Act. This legislation would allow states to make necessary adjustments to manage their enrollment in a way that meets the needs of their citizens, balances the budget, and makes commonsense modernizations to root out waste, fraud and abuse.

Repealing Obamacare and its unintended consequences will help too.
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