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Change in health care bill means some middle-class early retirees will get Medicaid benefits

WASHINGTON — President Barack 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 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.

Early retirees would be a new group for Medicaid. While retirees can collect Social Security at age 62, they must wait another three years to get Medicare, unless they're disabled.

Up to 3 million more people could qualify for Medicaid in 2014 as a result of the anomaly. That's because most of their Social Security benefits would no longer be counted as income for determining eligibility.

"This is a situation that got no attention at all," said Medicare chief actuary Richard Foster at a recent professional society meeting. "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 and senior Democratic lawmakers say it's the result of an effort to simplify rules to decide who will get help with insurance costs under the new health care law.

"This simplification will stop people from falling into coverage gaps and may cause some to be newly eligible for Medicaid and others to no longer qualify," said Brian Cook, spokesman for the Centers for Medicare and Medicaid Services.

States have been clamoring for relief from Medicaid costs, and the program is now one of the top issues in budget negotiations between the White House and Congress. Republicans want a rollback of federal requirements that block states from limiting eligibility.

Medicaid is a safety net program that serves more than 50 million vulnerable Americans. It is designed as a federal-state partnership, with Washington paying close to 60 percent of the total cost.

A spokeswoman for the Senate Finance Committee, which wrote much of the health care law, said if the situation becomes a problem there's time to fix it.

"These changes don't take effect until 2014, so we have time to review all possible cases to ensure Medicaid meets its mission of serving only the neediest Americans," said Erin Shields.

Republicans saw a problem.

"The fact that this is being discovered now tells you, what else is baked into this law?" said former Utah Gov. Mike Leavitt, who served as health and human services secretary under President George W. Bush. "It clearly begins to reveal that the nature of the law was to put more and more people under eligibility for government insurance."

Change in health care bill means some middle-class early retirees will get Medicaid benefits 06/21/11 [Last modified: Tuesday, June 21, 2011 10:36pm]
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