Kim Perez, who works as a nurses’ assistant while attending nursing school, recently switched to the overnight shift to save money on child care.
She’s debating which of the activities her 5-year-old son wants to do – violin, baseball and soccer – they will have to forgo because of the cost. The thought pains her.
“You want to be able to give your kids everything,” she said.
Perez is trying to squeeze her family’s budget because she and her fiancé could be among an estimated 23,700 low-income parents slated to lose Medicaid coverage under the state budget legislators passed last week.
The controversial cutback comes less than two years after a much-touted expansion of coverage under the federal health law. And advocates and state officials will be watching closely to see whether parents like Perez opt to pay for other forms of coverage — or end up uninsured.
Gov. Dannel P. Malloy first proposed the cut, and administration officials have argued that, because of the Affordable Care Act, there’s now an alternative for those parents: private insurance sold through Connecticut’s health insurance exchange, Access Health CT, at deeply discounted prices subsidized by the federal government.
But critics of the cut say experiences in other states indicate that many poor parents who lose Medicaid will to go without coverage rather than add insurance premiums to budgets already stretched thin by rent, food and other expenses.
“They will forgo health insurance coverage, which is, as we’ve said repeatedly in all kinds of ways, is the antithesis of what the Affordable Care Act was all about,” said Sharon Langer, advocacy director at Connecticut Voices for Children, who has been warning for years about the possibility of state Medicaid cutbacks once the federal health law’s key provisions took effect.
23,700 slated to lose coverage
Under the budget, the Medicaid income limit for parents of minor children would drop from 201 percent of the poverty level to 155 percent. For a family of three, that translates to a drop from $40,380 per year to $31,139. (The eligibility limit for pregnant women would not drop, as the governor initially proposed.)
Although the eligibility change takes effect Aug. 1, the vast majority of affected parents who are currently covered would qualify for another year of coverage because of federal rules. That 12-month extension affects those with earned income, and the Department of Social Services projected that it would apply to about 22,350 parents.
Another 1,350 parents who don’t have earned income would lose coverage Aug. 1.
Draft budget implementation language — which is likely to be adopted when legislators meet in special session — calls for the insurance exchange to enlist community-based organizations to help affected parents learn about their coverage options.
It would also require the DSS commissioner and the exchange to report quarterly to the council that oversees Medicaid on the health insurance status of those no longer eligible for the program, which is also known as HUSKY.
The cut included in the budget is less deep than what Malloy, a Democrat, initially proposed, drawing criticism from legislators in both parties.
Appropriations Committee Co-Chair Sen. Beth Bye, D-West Hartford, called the cut a compromise, but noted that through the exchange, parents would qualify for deeply discounted insurance premiums.
“That was a compromise, but one that we felt like people are not left without affordable health insurance,” she said.
|Family size||Current income limit||New income limit|
Those who lose Medicaid coverage and shop on the exchange would qualify for health plans with subsidized premiums set so they pay no more than 4 to 6 percent of their income.
They would also qualify for plans with lower cost-sharing than most exchange plans; the one available to them in 2016 would cover preventive care at no cost — like all plans that meet the health law’s requirements — but require $20 copays for other primary care office visits and $35 copays to see a specialist. They would have to meet a deductible — $500 for an individual or $1,000 for a family — for hospital care.
Medicaid, by contrast, is free. But some proponents of the cut noted that having private insurance could make it easier for patients to find doctors to treat them.
New insurance customers, or new uninsured?
How many of the 23,700 parents losing HUSKY coverage will buy plans on the exchange or otherwise maintain insurance?
Far from all, according to a recent analysis by researchers from the University of Massachusetts Medical School’s Center for Health Law and Economics.
When Rhode Island lowered its Medicaid income limit, only 11 percent of those expected to lose coverage had enrolled in that state’s exchange four months later, wrote the researchers, who produced the analysis on behalf of the Connecticut Health Foundation. While many were probably uninsured, they wrote, others had remained eligible for Medicaid, were seeking Medicaid coverage because of a disability or had signed up for employer-sponsored insurance.
The researchers also warned that some children could lose coverage, even though they still qualify. When Maine reduced Medicaid income eligibility for parents in 2013, they wrote, the number of children enrolled dropped by 13 percent within 7 months, even though the policy change didn’t affect children.
“Evidence suggests that if low-income parents and pregnant women lose HUSKY eligibility, many will not be able to remain insured,” the researchers wrote. “Connecticut was a leader in expanding Medicaid and ensuring adequate health care coverage for its population. The proposed budget cuts to HUSKY A run counter to this tradition and could cause significant harm to thousands of low-income people.”
The researchers noted that some parents who lose Medicaid won’t qualify for discounted exchange plans if they have access to employer-sponsored coverage, regardless of how much it would cost for the family.
And even those who buy coverage might delay needed care because of the out-of-pocket costs, they warned.
If Perez and her fiancé lose HUSKY — their income, which fluctuates, puts them on the edge of qualifying — they could get insurance through his job at a hospital. It would cost them $125 every two weeks, or $3,250 per year – a big chunk out of their annual income, which hovers around $31,000. They’d have to pay extra for dental and vision coverage.
“That’s money that you could be spending on groceries or utilities or something along those lines,” said Perez, who lives in Hartford.
Would she consider going without insurance, something she did years ago?
“I know my child will be insured, so that’s kind of like the big [thing]. As long as my son has insurance, then maybe it’ll be an option,” she said.
“When I think about it realistically, though, it’s not the best,” she added. “Going into the medical field, I know accidents happen every day. You can’t not have insurance. But at the same time, you have to think about it, you really do.”
She thinks others in her situation will end up uninsured rather than paying for coverage.
For Julieta Flores-Bravo of Bridgeport, going without insurance isn’t an option. She has asthma and allergies, and one of her sons has asthma and sees a speech therapist.
Still, Flores-Bravo, whose family income of $39,000 puts her and her husband just over the limit to continue Medicaid coverage, said she’s not sure what they will do. To afford insurance, she figures they will need to take on a second job and cut back on expenses.
Even if her family didn’t have medical needs, Flores-Bravo noted, they would face a financial penalty for not having insurance.
“It’s not even worth not purchasing insurance,” she said through a translator. “But if you can’t afford it, you just can’t afford it.”
Lessons from other states
While she argued against the cut, Langer, from Connecticut Voices for Children, is now focusing on how it will be implemented. She said Connecticut can learn from states that have made similar cuts.
“The lessons from those states are that you need to look to see whether not only are the adults still eligible, but to make sure that children don’t inadvertently lose coverage as well, that the computer systems don’t somehow incorrectly and inadvertently drop the kids from coverage,” she said.
And Langer noted that parents who learn they will lose coverage and call DSS could have difficulty reaching a worker, since the call center has long wait times. If they instead call Access Health, she said, it will be important that those who answer the phones understand Medicaid eligibility rules, including the fact that some parents could qualify for other parts of the program.
Officials at community health centers, which treat many patients who are uninsured or covered by Medicaid, plan to see if they can find out ahead of time which patients are slated to lose coverage, and reach out to them to schedule appointments to discuss coverage options, said Deb Polun, director of government affairs and community relations at the Community Health Center Association of Connecticut.
Polun called the cut “counter to the entire purpose of the Affordable Care Act.” Still, she said she understands the logic of looking to Medicaid for cuts in tight budget times. Even though per-person spending in the program has been stable or declining, enrollment has grown significantly in the past few years – as of April, it covered 719,029 people – and covering more people costs more money.
“I understand the idea of, ‘This is where the money is, so this is where we’re going to make the cut,’” Polun said. “But I think philosophically, it’s just really unfortunate because we have been a leader in health care.”