How the social safety net works

By day, Andrea Louise Campbell teaches social policy at the Massachusetts Institute Technology, explaining how the country’s welfare system works. But as of late, she’s had a more personal experience with safety-net program. Her sister-in-law, recently quadriplegic after a serious car accident, and newborn baby have had to navigate California’s public health insurance programs:

For health coverage, the baby fares best. He is insured through Healthy Families, California’s version of the Children’s Health Insurance Program, the federal-state plan for lower-income children ineligible for Medicaid whose families cannot afford private insurance. California is relatively generous, with eligibility extending up to 250 percent of the federal poverty level of $19,090 for a family of three; 27 states have lower limits.

My sister-in-law will be covered by Medi-Cal, California’s version of Medicaid, because she is disabled and has limited income. But because my brother works, they are subject to cost-sharing: they pay the first $1,100 of her health costs each month. Paying $1,100 leaves them with a monthly income of just 133 percent of the federal poverty level. If my brother makes more money, their share of the cost increases.

They must also meet the Medi-Cal asset test: beyond their house and one vehicle, they can hold $3,150 in total assets, a limit last adjusted in 1989. They cannot save for retirement (retirement plans are not exempt from the asset test in California, as they are in some states). They cannot save for college (California is not among the states that have exempted 529 college savings plans from their asset tests). They cannot establish an emergency fund.

The scheme that Campbell describes is pretty similar to the health coverage that other states provide to low-income Americans. Health insurance offered to low-income children, through CHIP, tends to cover those slightly higher up the income-scale.

Medicaid, meanwhile, tends to serve individuals of more limited means. Wisconsin is the only state to cover parents who live above 200 percent of the federal poverty line. Most do not give any coverage to those without children, or who do not have an illness or disability (the handful that do usually limit the program to those living below the poverty line). It’s not abnormal for a lower-income family to be covered by multiple public insurance programs.

A lot of this will change in 2014, when the Affordable Care Act’s insurance expansion starts. Then, Medicaid will cover anyone below 133 percent of the federal poverty line (about $14,000 for an individual). Anyone earning less than 400 percent of the federal poverty line will be eligible for subsidized, private health insurance. Insurance programs will become much more standardized, with each state playing by very similar rules. But right now, our public health insurance programs are much more of the patchwork system that Campbell’s sister-in-law has become a part of.