lifebelt

When Obamacare was designed, it had aspirations that all Americans would have health insurance coverage, regardless of age, income level or health. As we know, the act has been hotly contested and challenged all the way to the U.S. Supreme Court. But there have been some casualties. The health-law coverage gap, an unfortunate consequence of amends to PPACA, is one such casualty.

Before we move into how and why, let’s first understand what we mean by the health-law coverage gap. Rewinding back to 2010, Obamacare was designed to provide health insurance to the underprivileged through a two-pronged approach – new federal subsidies and expanded Medicaid program. For people earning up to 138 percent of the federal poverty line, Medicaid was to be expanded for covering their health insurance requirements. For people in 138 – 400 percent of the poverty line, the law proposed federal subsidies that could be attained while enrolling through federally facilitated marketplaces.

State Exchange

However, things did not go according to plan. In 2012, the U.S. Supreme Court took this requirement away. Twenty-four states chose to not expand Medicaid, leaving a part of the U.S. population ineligible for subsidies. This health-law coverage gap, which prevents people with income less than or equal to 138 percent of federal poverty line from availing heavily subsidized insurance off the Obamacare marketplaces, has trapped millions of the most needy Americans. Ironically, their counterparts, who are earning a bit more and fall with 138 to 400 percent of the federal poverty line range, are eligible for subsidized private health insurance. As per available numbers, 4.8 million Americans have fallen into this gap.

The administration is hoping that the states will re-think their position and agree to expand Medicaid. But the fact that this is a hot issue for both sides, it is going to take more than a little persuasion.

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