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I'm eligible for Medicaid, but is it good insurance?

Yes, and the price is right

Published: December 17, 2013 10:00 AM

A. My daughter, age 27, is a part-time student who will earn little or no income in 2014. She just applied for coverage through the state marketplace and learned she is going to be put on Medicaid. I’m concerned that she won’t be able to find a doctor or hospital that takes Medicaid, and that it’s not very good coverage. Can she opt out of Medicaid and get a subsidy to buy a private plan instead?

B. Now that people are insurance-shopping en masse on HealthCare.gov and the state-run health insurance marketplaces, I’m getting more and more questions like this, from middle-class people who never dreamed they or anyone in their family would qualify for Medicaid, the public health insurance program, which in 25 states plus the District of Columbia is expanding to cover everyone with a household income of less than 133 percent of the Federal Poverty Level.

They worry that it’s cut-rate coverage that will relegate them to overcrowded emergency rooms and overburdened public clinics in scary neighborhoods.

It’s not.

But first, an answer to the last part of the question. If upon completing a marketplace application you’re told that you’re eligible for Medicaid, you won’t qualify for a subsidy to buy a private plan. Your choice at that point will be either to enroll in the government plan or purchase a private plan at full price.

Our advice to you is, if you qualify for Medicaid, take it.

“It’s way better coverage than anything you’re going to buy in the marketplace,” says Judith Solomon, Vice President for Health Policy at the Center on Budget and Policy Priorities, a Washington think tank. “First of all, it’s free. There’s little or no out-of-pocket cost. It’s at least as comprehensive as private insurance.” In most states, Medicaid even covers at least some dental and vision care for adults, benefits notably absent from private marketplace plans.

The thing that seems to be scaring off some new eligibles is the fear that they won’t be able to find a doctor or hospital willing to take new Medicaid patients.

Here, the evidence is confusing, to put it mildly. In surveys, doctors are more likely to say they won’t take new Medicaid patients than new patients with Medicare or private insurance. But surveys of patients themselves find that people on Medicaid report the same degree of access to doctors as people with private insurance. Our guess is that your access will depend a lot on where you live, but in no location will you find zero Medicaid providers.

“Medicaid has pretty clear federal requirements that you have to ensure beneficiaries have access to providers equivalent to what the average person in the area might get,” says Matt Salo, executive director of the National Association of State Medicaid Directors. “It’s not like it’s this vast wasteland.”

As for where you’ll get your care, the answer is most likely through a private managed care plan at a private hospital or doctor’s office, says Robin Rudowitz, a Medicaid expert at the Kaiser Family Foundation.  That is because the vast majority of states have contracted out their Medicaid plans to managed care companies, many of whose names you will recognize because they also sell private individual and group insurance.  “Medicaid may be publicly financed, but it’s purchasing care on the private market,”  Rudowitz explains.

So, what should you do if you find out you’re eligible for Medicaid?

1. Enroll! Although the original hope and dream was that state health insurance marketplaces could handle this process seamlessly and online, it turns out that a lot of them can’t. Save yourself the headache and sign up directly. Here are links to state Medicaid agencies.

2. If you are given a choice of Medicaid managed care plans to join, check out quality rankings of the plans from the National Committee on Quality Assurance. They’re available right here on our site, free of charge.

3. If you want to keep a doctor or hospital you have now, check directly with the provider or with the managed care plan you’re considering.

Got a question for our health insurance expert? Ask it here; be sure to include the state you live in. And if you can't get enough health insurance news here, follow me on Twitter @NancyMetcalf.

Health reform countdown: We are doing an article a day on the new health care law until Jan. 1, 2014, when it takes full effect. (Read the previous posts in the series.) To get health insurance advice tailored to your situation, use our Health Law Helper, below.

   

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