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On June 21, Connecticut became the first state to be approved by the U.S. Department of Health and Human Services to expand its Medicaid program as a consequence of the recently passed Affordable Care Act.
Officials in Connecticut estimate that 45,000 low-income adults will become newly eligible now that anyone earning up to 56% of the federal poverty level (FPL) qualifies. Health care for this group of beneficiaries had been funded by a state program, the State-Administered General Assistance. Because the federal government will be paying the full cost of the expansion, the state expects to save $53 million by next July.
Even though the Medicaid expansions called for in the new health reform act require states to conform by 2014 to include all legal residents earning less than 133% of FPL, states may elect to initiate the reform sooner.
Complicating the issue however is the fact that Medicaid rates are so low that many physicians won’t treat this population. In fact, despite a 15% increase in Medicaid reimbursement rates between 2003 and 2008, Medicaid pays just 72% of the Medicare rate for the same services. Consequently, only 31% of family practice physicians and general practitioners accept Medicaid patients. The new reform legislation has provided for an increase in the Medicaid rate, making it equal to the Medicare levels, but the increase only covers the years 2013 and 2014.