Editor’s note: This article was first published Oct. 18, 2013.
Many of Vermont’s low-income farmers, contractors and other sole proprietors who were previously ineligible for Medicaid benefits will qualify for the federal program in 2014.
That’s because formula the state uses to calculate Medicaid benefits is being replaced.
The state projects that in 2014, about 40,000 additional Vermonters will become eligible for free or low-cost health insurance coverage through the federal program. Of that total number, three-quarters of the new Medicaid beneficiaries will come from the state health insurance programs, Catamount and VHAP, which end on Jan. 1.
“Anybody coming in from Catamount or Medicaid won’t pay a premium,” said Mark Larson, commissioner of Vermont Health Access. “They’ll have more expansive coverage, including things like a limited dental benefit and non-emergency transportation services.”
The other major driver of Medicaid growth is an increase in the eligibility level. Currently, only Vermonters earning up to the federal poverty level can qualify. For an individual, that’s an annual income of $11,490, or $23,550 for a family of four.
Vermonters earning up to 138 percent of the federal poverty level will be able to draw down Medicaid benefits in 2014. On paper, the new threshold is 133 percent of the federal poverty level, but the state will allow for an additional 5 percent.
Though the percentage increase in the threshold seems negligible, the household income dollar amount is appreciably higher. An individual earning up to about $15,800 and a family of four earning up to $32,500 should be eligible for Medicaid in 2014.
Under the Affordable Care Act, Vermont will use modified adjusted gross income to determine Medicaid eligibility.
Trinka Kerr, Vermont’s Health Care ombudsman, says her office has worked for years with dairy farmers earning less than the federal poverty level, who were denied Medicaid benefits because they held large assets.
“That often meant they went uninsured,” she said.
The modified adjusted gross income federal tax figure allows for deductions such as tuition, student loan interest and certain self-employment expenses.
Peter Sterling, the director of Vermont Campaign for Health Care Security, says sole proprietors will benefit from the new way of calculating income because it doesn’t penalize them for their assets, and it allows them to account for asset depreciation.
“That is a huge deal for a plumber, or a carpenter, a farmer, people in the trades. It’s a big, big deal,” he said. “Their adjusted gross income looks a lot bigger on paper than their modified adjusted gross income. Modified adjusted gross income more accurately reflects what your typical self-employed person in the trades is actually bringing home.”
Medicaid will also expand to another key population: adults without children.
“Right now, if you are an adult, you would not even be eligible for Medicaid unless you had children, were disabled or were elderly,” Kerr said.
She also notes that the change in calculation for the state’s primary Medicaid program would not affect two subsets of the program.
“This change does not apply to long-term care Medicaid or the Medicaid for the disabled that exist now,” she said. “They have their own income rules; they don’t use this new modified adjusted gross income stuff.”