Obamacare’s coverage gap: The poor caught in between

Those who can’t get Medicaid or subsidies won’t pay a fine for not having health insurance

CNN News Wire | 10/4/2013, midnight
I met a woman named Yvonne in Greenville, South Carolina, where the CNN Express was reporting on the rollout of ...
CNN's Dr. Sanjay Gupta kicks off his CNN Express bus tour focusing on the Affordable Care Act, also known as Obamacare. The tour kicked off in Greenville, South Carolina on October 3, 2013.

I met a woman named Yvonne in Greenville, South Carolina, where the CNN Express was reporting on the rollout of Obamacare. Yvonne had a big smile and was very excited — you couldn’t miss her.

I first noticed her standing in line, waiting patiently to ask a few questions about health care. Most of the questions I had been asked up until that time revolved around the logistics of signing up, whether they could pick a particular doctor and how much all this was going to cost.

Yvonne, who didn’t give her last name, started by telling me that she had been able to get off Medicaid in the past year. Before that, she had been living in her car, intermittently staying with friends. Now she has a place to live, and she’s excited about the prospect of finally being able to get private health care insurance for the first time in her life.

Yvonne, 35, told me she works part-time as a hairstylist assistant. She said she makes $9 an hour, which at 20 hours a week works out to about $9,360 a year. She is still impoverished, but considers herself lucky because she’s never had a major illness.

As we spoke about South Carolina’s sign-up process, I realized I was explaining some unwelcome news: Yvonne is not eligible for any assistance toward buying health insurance.

Let me try to explain: In a state that has chosen not to expand Medicaid, Yvonne is in the staggering position of now making too much money to qualify for Medicaid, and too little to obtain subsidies through the Affordable Care Act.

This wasn’t how it was supposed to go down for Yvonne and others like her all over the country. When you imagine the people likely to benefit the most from the Affordable Care Act, you probably think of someone just like her.

By obtaining a real job with enough income, Yvonne has disqualified herself from her state’s Medicaid program. But in order to qualify for subsidies in South Carolina, she needs to get above the poverty line, and she is not quite there. Yvonne and an estimated 7 million others now find themselves in a coverage gap.

The tax subsidies available through the health exchanges were intended to make private insurance coverage affordable for those between the poverty line and four times as much — people who now shoulder the responsibility, by law, of purchasing their own coverage.

Last year, in its landmark ruling that left most of the ACA in place, the U.S. Supreme Court ruled that the Medicaid expansion is optional for states. South Carolina, and 25 other states, turned it down. As a result, a big swath of the uninsured will stay that way when new coverage options kick in January 1.

I asked Kentucky Senate hopeful Matt Bevin, a Republican, who was against the expansion in his state, about this. Democratic Gov. Steve Beshear has been a proponent of the law, and Kentucky has expanded Medicaid to cover anyone making up to 138% of the poverty line. When I described Yvonne’s situation to Bevin, he was sympathetic but immediately replied, “Where is the money going to come from?”