While Obamacare and Medicaid are often conflated, they are actually two separate programs that serve different populations. The goal of both is to make health coverage more affordable for all Americans.
While some ACA taxes and some provisions have been repealed, most of the ACA remains intact and fully functional more than a decade after it was enacted. The individual/family subsidies have been enhanced by the American Rescue Plan and extended through 2025 by the Inflation Reduction Act.
Cost
The cost of health insurance is an important concern for many people. Obamacare subsidies help reduce the cost of coverage for individuals and families who qualify for subsidized plans.
In addition, federal government funding helps cover a large portion of the cost of newly-eligible people who are on Medicaid as a result of the ACA. Newly-expanded Medicaid populations are guaranteed to receive at least 90% of the total cost (federal share will never drop below that level).
However, nonexpansion states continue to face a high uninsured rate, which means that low-income people are still not covered. This has significant consequences for hospitals and other providers.
Compared with nonexpansion states, Medicaid expansion has been associated with larger reductions in uninsured rates and hospital uncompensated care costs. For example, from 2013 to 2017 those costs fell by 45 percent in Medicaid expansion states compared to 2 percent in nonexpansion states.
Coverage
Medicaid is a government-run health insurance program for low-income Americans. Its coverage is much less extensive than that of ACA-compliant private plans and may come with substantial deductibles, copayments, or coinsurance.
Obamacare-compliant private plans are available through the ACA’s individual market exchanges, which offer premium subsidies and cost-sharing reductions. They also include a range of additional benefits, such as dental and vision coverage, prescription drugs, rehabilitative and long-term care services, and hospitalization coverage.
However, if you do not qualify for a private plan, Medicaid may be your only option. It provides health coverage to millions of people across the country.
Medicaid is available in every state and the District of Columbia, as well as five U.S. territories with permanent populations: American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the United States Virgin Islands. It is funded by both federal and state taxpayer dollars, and is administered by the federal Centers for Medicare and Medicaid Services (CMS). Depending on your income, you may be eligible for a free or low-cost Medicaid plan.
Eligibility
Medicaid is a government-run program for low-income individuals and families. It provides health insurance for people who earn below a certain income level, which is called the federal poverty line (FPL).
The ACA expanded Medicaid to all legal residents in states where it was not already available. That’s why it’s often referred to as the “Medicaid expansion.”
The Medicaid program is designed for low-income Americans and covers a variety of health services, including inpatient care and outpatient treatments. In some states, it also offers long-term care insurance for adults with disabilities and older seniors.
Taxes
The ACA has a number of taxes that it will require the federal government to pay in order to fund its health care reforms. The taxation of these new costs will affect both individuals and businesses, as well as the economy overall.
Premium Subsidies and Cost-Sharing Reductions: These subsidies help lower your out-of-pocket health care costs by lowering your deductibles and co-pays. They are only available to ACA-compliant plans sold on the marketplaces.
Modified Adjusted Gross Income (MAGI): The ACA uses this standardized measure of your household income to determine your eligibility for the premium tax credit, most Medicaid and CHIP programs, and cost-sharing reductions. However, MAGI is not the same as your income reported on your taxes – you must estimate your MAGI when applying for these programs.
Medicaid Expansion: This expansion of the traditional Medicaid program is funded by a 10 percent state share of federal funds and by additional provider taxes. Studies have shown that the net price to states of expansion is often much less than the sticker price imposed by states because expansion creates significant budget savings and revenue increases that can be used to help cover other costs or reduce taxes.
