UW Health announced it has partnered with United Way of Dane County to help pay the insurance premiums for those making between 100% and 138% of the federal poverty level. These low-income people will be eligible for federal subsidies to get coverage through the exchange because Wisconsin decided not to expand Medicaid to this income group. But even with the subsidies they still might have to pay part of the premium out of pocket.
Earlier this year, Wisconsin changed income eligibility requirements for its Medicaid program from 200% of poverty level to 100%, disqualifying about 92,000 residents. The state also rejected the Medicaid expansion, even though the federal government would have picked up 100% of the cost for the expansion population for the first three years and 90% after that.
Last week, more than 56,000 households received letters informing them they will stop receiving Medicaid benefits at year's end. Those losing Medicaid benefits have until Dec. 15 to apply for insurance through the state exchange to avoid having their coverage interrupted Jan. 1.
The UW Health initiative, called HealthConnect, would pay most of the unsubsidized premium for a silver-tier plan on the exchange. Americans earning less than 250% of poverty who get a silver plan also qualify for a federal subsidy to cover most of their cost-sharing expenses.
With money slated for one year, Atkinson said the program's target is to sign up and provide support for up to 84% of eligible residents in the Madison area. On average each recipient would get a one-time payment of around $268 to go toward their annual premium costs.
“UW Health made this commitment because it will make a difference for thousands of people in our community,” Donna Katen-Bahensky, president and CEO of UW Hospital and Clinics, said in a statement. “This is the right thing to do to make high-quality healthcare accessible to the most vulnerable among us. There's an incredible potential to have an impact in this area through HealthConnect.”
The concept for the program came about after health officials and advocates realized some low-income residents would face difficulty affording the extra costs of premiums and cost-sharing even after receiving a federal subsidy, which caps their premium contribution to 2% of their income. Research has shown that imposing cost-sharing requirements on Medicaid recipients reduces their likelihood of enrolling.
“Even though the rates for health insurance under the (Patient Protection and) Affordable Care Act are likely to be as low as possible for these people, we're worried that with the income of these people they will not be able to afford the health insurance,” said Deedra Atkinson, senior vice president for United Way of Dane County.
The fear, Atkinson said, is that cost could deter them from obtaining insurance, which could place a financial strain on hospital emergency departments serving the uninsured.
“Even with the federal subsides that are available, there are people who are going to have a tough time and thus may not purchase the insurance that they need,” UW Health spokeswoman Lisa Brunette said. “That would be a problem not just for them but for the providers, the insurers and the whole community. It's advantageous to everybody that as many people as possible be insured.”
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