CBO: Fixing ‘Glitch’ in Reform Law Could Save $13B Over Next Decade
Separate bills introduced last week to fix a "glitch" in the federal health reform law allowing middle-income early retirees to qualify for Medicaid could save an estimated $13 billion over the next decade, according to a report from the Congressional Budget Office, The Hill's "Healthwatch" reports (Pecquet, "Healthwatch," The Hill, 7/25).
Under the overhaul, an individual's modified adjusted gross income -- a calculation that excludes some Social Security benefits -- will be used to determine Medicaid eligibility. The health reform law increases the income eligibility limit to 133% of the federal poverty level for Medicaid. Currently, the federal poverty level for a couple is $14,710.
CMS Chief Actuary Richard Foster last month noted that a married couple who retired early and received Social Security benefits of about $25,000 each could be eligible for Medicaid if the remainder of their income was less than 133% of the poverty level, even though their total income, including benefits, would be well above the threshold.
Foster estimated that the oversight would allow as many as three million middle-income early retirees to qualify for Medicaid in 2014 (California Healthline, 6/22).
Sens. Michael Enzi (R-Wyo.) and Ben Nelson (D-Neb.) have introduced bills (S 1376 and S 1378) that would include Social Security benefits when calculating eligibility for Medicaid and insurance subsidies under the overhaul.
The CBO report found that such legislation would reduce Medicaid enrollment by between 500,000 and one million people annually. That would lower federal spending by $32.9 billion over the next decade.
About 500,000 of those individuals would be eligible for subsidies to purchase coverage in the state insurance exchanges created by the reform law, while fewer than 500,000 individuals would be covered by their employers or become uninsured.
Advocates for people with disabilities have raised concerns that the bills could adversely affect people who receive Social Security disability payments but who are not eligible for Medicare because of a two-year waiting period. However, according to "Healthwatch," the CBO estimate "blunts those concerns" ("Healthwatch," The Hill, 7/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.