The Affordable Care Act coverage gap may leave millions without coverage or subsidies
Image source: TheWarriorOnline.com
It seems as if our beloved state is determined to make things harder for residents hard hit by unemployment and those in lower income brackets. First they refused the federal government’s offer to extend unemployment benefits to those stuck in stubborn joblessness. Second, when the Supreme Court upheld the Affordable Care Act (aka Obamacare) but left it in state hands to make policy decisions, NC was one of 25 states that refused the offer of expanded Medicaid to help lower income families obtain low cost medical care.
The result is that more than 318,000 North Carolinians are without insurance coverage that otherwise could have had free insurance through the federal government’s Medicaid program. Nationwide, close to five million will fall into this gap. Instead, they will now have to contend with the perilous enrollment process of ACA and there’s a question about whether the poorest in our state will even be able to obtain affordable coverage (despite the legislation’s moniker).
The Dreaded Coverage Gap
Here’s the problem. Because North Carolina refused Medicaid and subsidies for Affordable Care Act coverage don’t kick in unless you earn at least $11,500 there is a subset of people who clearly can’t afford to comply with the new healthcare law but will face penalties if they don’t. A recent study by Kaiser Permanente estimates that 27% of the uninsured in the 25 states (including ours) that refused to expand Medicaid will be caught in this coverage gap.
The fallout from failed Medicaid expansion in North Carolina
Image source: KaiserFamilyFoundation.com
The High Cost of Unsubsidized Premiums on the Poor
With the average premiums for silver and bronze plans hovering around $250 per month or roughly $3,000 per year, this would take up 30% or more of the salary of those that are already among our state’s poorest. And these premiums will not be offset by any subsidies. This is neither affordable nor fair and there is little hope that these hundreds of thousands will obtain much-needed coverage as a result of this legislation.
Poor and Uninsured Will Face Penalties for Non-Coverage
Not only will this gap group not obtain health insurance, but they will also have to face penalties for not complying with the law and obtaining coverage. And while the tax penalty is modest for 2014, for those in low income brackets, it will be unaffordable from the get-go and only grow worse from there.
The one hope for this hardest-hit group is if North Carolina changes its stance and decides to opt into the expanded Medicaid program. The federal government has left signing on open ended so we can only hope that our state will relent and offer this much-needed break for impoverished North Carolinians.
If you’re struggling financially now, the implementation of the Affordable Care Act could make life more difficult if the premiums are more costly than you can manage. If you also have a pile of other debts that you can’t manage and are looking for a long-term debt reduction solution, Chapter 13 or Chapter 7 bankruptcy may be able to give you the financial fresh start you need. Contact the law offices of John T Orcutt to schedule a free consultation and get more information now.