D.C. expects health care legislation to save millions of dollars

By Tim Craig
Washington Post Staff Writer
Wednesday, April 14, 2010

D.C. officials say the city will save millions of dollars from the recently approved federal health-care bill, a reward of sorts for the District's years-long push to offer nearly universal insurance access to its residents.

The windfall for the District, which will be seen this year as it starts transferring childless adults from a city-backed insurance program to Medicaid, underscores how different states face different obstacles or advantages as they begin implementing the federal health-care legislation.

While states such as Virginia, which has limited health-care benefits for the poor and middle class, will probably struggle to conform to the law, the District and states that have made greater investments in expanding health insurance expect a smoother transition.

"The District is in the enviable position of being five years ahead of the nation," said D.C. Council member David A. Catania (I-At Large), chairman of the Health Committee. "For nearly the past decade, the District has been doing what is right: Using local funds for health insurance. And now we are going to reap the benefit."

In a report scheduled to be released Wednesday, city officials will announce that only 6.2 percent of District residents are uninsured, less than half the national average and lagging behind only Massachusetts in total percentage of uninsured residents.

The District's success -- all but 3 percent of District children are covered -- stems from its recent efforts to invest tens of millions of dollars to extend coverage to the uninsured through Medicaid and other locally funded programs.

In the District, parents of children are eligible for Medicaid if they make up to 200 percent of the federal poverty level, which is an income of $29,140 a year for a family of two. By comparison, in Virginia, a parent with one child is eligible for Medicaid only if they make up to 29 percent of the poverty limit, about $4,225 a year.

But under the new federal health-care law, states will have to expand Medicaid eligibility for all adults to 133 percent of the poverty level starting in 2014.

Currently, the federal government does not subsidize health insurance for poor adults who do not have children or immigrants in the country illegally. The District, where five years ago 13.5 percent of residents lacked health insurance, has been engaged in a sustained effort to get to universal coverage. Over the past decade, the city began spending tens of millions of dollars annually to extend coverage to childless adults and illegal immigrants who make up to 200 percent the poverty limit and are not covered by Medicaid.

Now, under the legislation signed by President Obama last month, states can immediately begin transferring childless adults who meet the requirements to Medicaid, according to city officials.

While the District pays $200 per person per month to enroll childless adults and illegal immigrants in Alliance Insurance, the city's share of its Medicaid match will be only $105 per person per month, according to Catania.

"We are going to cut our costs nearly in half, and we will provide a better benefit," said Catania, who estimates that as many as 20,000 childless adults will be shifted to Medicaid this year.

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