HHS: Obamacare will hike state Medicaid costs

Buried in a web of new rules issued on Friday, the Department of Health and Human Services acknowledged that the national health care law’s definition of Medicaid elgibility would impose higher costs on states.

“The Administration is concerned and is exploring options to address it,” according to HHS.

The problem arises because not only will the health care law expand Medicaid by raising the income threshold to qualify for the program, but it will exclude Social Security benefits from the calculation to determine elgibility. As the Associated Press has reported, this would mean a couple with annual income of $64,000 could qualify for Medicaid, a program intended for the poor.

Today, HHS, in conjunction with the Department of Treasury, released a series of new rules and regulations regarding the insurance coverage expansion, which you can read here.

But on in a fact sheet describing some of the Medicaid changes, HHS says the new rules would:

Simplify financial eligibility by relying on “Modified Adjusted Gross Income” (MAGI) for determining eligibility for most Medicaid and CHIP enrollees (children and non-disabled adults under age 65.  The rule notes that MAGI rules which do not count a portion of Social Security as income for Medicaid purposes could lead to higher state Medicaid costs. The Administration is concerned and is exploring options to address it.         

The burden that the health care law places on the states, particularly the Medicaid expansion, has always presented problems for the administration. If you remember, the Medicaid expansion issue was at the root of the infamous “Cornhusker Kickback” that was offered to Sen. Ben Nelson, D-Neb., as part of the final deal to get the bill through the Senate back on Christmas 2009.

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