As of 7pm tonight, a shutdown of the federal government tomorrow appears to be all but imminent. There is undoubtedly last minute shenanigans going on behind the scenes in Washington to avert such a disaster, but it doesn’t look good. The latest news is that a group of moderate Republicans in the House of Representatives is working to gather enough votes to pass a continuing resolution, but I’m not holding my breath.
Regardless of whether the federal government shuts down tomorrow, the next major step in the Affordable Care Act is set to occur tomorrow. On October 1st, the state based health insurance exchanges will open. For the first time, consumers who don’t currently have health insurance will be able to effectively be able to “shop around” for health insurance. They’ll be able to select from several different tiers of products – platinum, gold, silver, and bronze. They’ll find out if they are eligible for government subsidies to help with the cost of their monthly insurance premium. The options will vary from state to state depending on where an individual lives.
But wait… if the government shuts down tomorrow or if “Obamacare” is defunded, won’t that stop the insurance exchanges from opening?
Nope. The insurance exchanges aren’t funded by the Congressional budget. In other words, dedicated money has already been set aside for this portion of the Affordable Care Act. Unless somehow the entire law is shut down before tomorrow, the exchanges will open for business as scheduled.
According to the Obama administration, the opening of the exchanges is the one of the key steps to getting as many uninsured individuals as possible onto private health insurance plans. The other major component of the Affordable Care Act designed to close the uninsurance gap is the expansion of Medicaid. Oddly enough, these two components are tied together. Let me explain…
Last year the Supreme Court upheld the Affordable Care Act, but the justices also ruled that each state could decide whether or not to accept the ACA’s Medicaid expansion. Many states have chosen not to – primarily those controlled by Republican governors or legislatures who remain vehemently opposed to the Affordable Care Act – claiming that Medicaid expansion would destroy state budgets. Accepting the Medicaid expansion will allow thousands of poor residents to quality for health insurance via Medicaid. Not accepting the expansion means that these residents either have to go on the state-based health exchanges or forgo health insurance and pay a penalty to the federal government when filing income taxes (although in truth, many of these people don’t make enough money to have to file income taxes).
Ironically, there will be previously uninsured individuals who intend to purchase health insurance on the exchanges, only to find that they qualify for Medicaid. And they always did, even before the Affordable Care Act. Even in states that aren’t expanding Medicaid. They just didn’t know it. In fact, tens of thousands of people required by the Affordable Care Act to get into the insurance market in 2014 will discover they are eligible for Medicaid benefits for which they’ve never applied.