House, Senate Bills Would Close Loophole That Allows Higher-Income Seniors to Enroll

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A trio of lawmakers July 18 introduced bills that would close a loophole in the federal health reform law that allows some early retirees to qualify for Medicaid or premium subsidies, even if their incomes exceed eligibility levels for those programs.

Sens. Michael B. Enzi (R-Wyo.) and Ben Nelson (D-Neb.) and Rep. Diane Black (R-Tenn.) introduced legislation (S. 1376, S. 1378, H.R. 2576) that would ensure all income is included when determining eligibility for Medicaid and the premium tax credits offered through the insurance exchange created under the Patient Protection and Affordable Care Act.

PPACA excludes certain income, such as some Social Security benefits, when calculating eligibility, meaning that early retirees could qualify for programs that working seniors could not or for a greater level of premium support.

Knowledge of the provision has spread in recent months, prompting concerns about its effects and calls for change (123 HCDR, 6/27/11).

In a preliminary estimate, the Congressional Budget Office and the Joint Committee on Taxation said the proposals would reduce the deficit by about $13 billion between 2014 and 2021. The change in the income definition would have a negligible effect on the number of individuals who are uninsured, according to the estimate.

“As our leaders struggle to find common ground to address our nation's debt and spending, this proposal represents an area of savings where there is a rare opportunity for agreement on both sides of the aisle,” Enzi said in a statement.

Enzi July 19 told BNA that he expects to work with Nelson on moving the legislation forward, although he said it is too early to pinpoint a timeline for its consideration. Bipartisan support for the bill, however, will increase the likelihood of passage, according to Enzi.

“It's so well-recognized as a major glitch that it has to pass,” he said.

The Health and Human Services Department is exploring changes to the income calculation and will study the proposals, according to an HHS representative.

By Sarah Barr