Medicaid and the Affordable Care Act

The Affordable Care Act ensures that all Americans have access to quality, affordable health care.  It works with States to establish State-based Health Insurance Exchanges so that consumers have the ability to shop for coverage in a competitive marketplace and insurers are made to compete on the basis of cost and quality. And it takes important steps to make coverage more affordable for millions of people, families, and small businesses. To achieve this, the health law provides:

• Tax credits for individuals and families purchasing coverage in the Exchanges with income from 133 to 400 percent of the Federal poverty level, as well as those ineligible for Medicaid with income between 100 and 133 percent of poverty.
  
  
• Medicaid for most Americans with income below 133 percent of the federal poverty level (about $15,000 for an individual, $20,300 for a couple). 
  

In carrying out the law, we need to make sure Americans can easily understand their coverage options and their eligibility for premium tax credits based on their income.  Many people and families receive income from a variety of sources. For example, some people receive Social Security benefits in addition to income they may earn at their job.  Long-standing tax law excludes a portion of Social Security benefits from income to reduce seniors’ tax bill.  The income definition used in the health care law for tax credits and Medicaid also uses this exclusion, creating something known as your “modified adjustment gross income.” 

Medicaid is a vital program, providing health benefits to nearly 50 million Americans, most of them with very low incomes including women and their children, people with disabilities, and many seniors who are living in nursing homes. That’s why we have worked with States to keep costs down and sustain coverage in the program as the economy is recovering.  And that’s why we are fighting efforts in Congress to end Medicaid as we know it and replace it with a block grant.

However, we are concerned that, as a matter of law, some middle-income Americans may be receiving coverage through Medicaid, which is meant to serve only the neediest Americans.  We are exploring options to address this issue, so that we can use taxpayer dollars responsibly while ensuring that all Americans have access to affordable, high quality health insurance coverage.

Note: this blog was updated on June 22.