THE BLOG
01/24/2013 01:03 pm ET | Updated Mar 26, 2013

Obamacare: Immigrants Might Get Better Deal Than Some Citizens

The Supreme Court decision that upheld President Barack Obama's health care reform law but enabled states to opt out of its Medicaid expansion just keeps causing ripples.

The Associated Press caught onto an odd consequence of the Court's ruling that might partially explain why conservative Republican Gov. Jan Brewer of Arizona wants to broaden Medicaid: In states that don't expand Medicaid, some poor legal immigrants would be able to access tax credits for private health insurance that citizens with the same income couldn't get.

Some background is necessary to understand what's going on here.

Under the health care reform law, people who earn up to 133 percent of the federal poverty level, which is $14,856 for a single person this year, are eligible for Medicaid if their home states expand the program. In a separate benefit, the law will provide tax credits for health insurance to those who make between the poverty level, which is $11,170 this year, and four times that amount. These parts of the law take effect next year.

So in states that don't expand Medicaid, U.S. citizens with incomes below poverty aren't eligible for any help at all while those whose earnings are at least at the poverty level would qualify for tax credits.

Legal immigrants oddly get a better deal under this scenario, the AP explains. How? By law, legal immigrants face a five-year waiting period before they can get Medicaid. The health care reform law didn't change that -- but it did allow legal immigrants to buy private health insurance and obtain federal subsidies without a waiting period. That includes legal immigrants with incomes below the poverty line. U.S. citizens who earn that much aren't eligible. Arizona budget officials figured this out before Brewer made her decision, the AP reported.

This isn't what Congress intended because the lawmakers who wrote the law never imagined the Supreme Court would make the Medicaid expansion optional. And it's important to note that the health care law prohibits undocumented immigrants from accessing any of its benefits and even from buying coverage on the health insurance exchanges with their own money.

Could this influence more governors to follow Brewer's example? Sarah Kliff at the Washington Post thinks it might, especially in states with large immigrant populations.

Now that Arizona has brought this issue into the Medicaid expansion debate, it should be interesting to see how other states navigate around it. Will Gov. Rick Perry in Texas stand for legal immigrants having better access to health insurance subsidies? What about Gov. Rick Scott in Florida? It's a new wrinkle in an old debate, that might make it a bit harder for Republican governors to turn down these Obamacare funds.

Texas is one of 10 states run by Republicans that already have rejected the Medicaid expansion. Fellow Republican Scott hasn't made a decision yet.


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Via: The Advisory Board Company