Obamacare Immigrant Loophole explained

immigrant loophole

Obamacare: Legal Immigrant to receive subsidies,
While some citizens won’t

Recently the Associated Pressed, and the Huffingtonpost  published and article on an unexpected loophole in Obamacare. This loophole was a direct result of last years Supreme Court ruling, and is now providing a large challenge for Republican Governors and states that are choosing not to take part in the Medicaid Expansion provision of Obamacare. Through an unplanned combination of the Supreme Courts ruling on Medicaid Expansion, and assumptions made by Obamacare on subsidies, legal immigrants will be eligible for government subsidies to purchase private insurance, while state residents in states that have chosen to turn down the Medicaid Expansion provision won’t. The discovery of this loophole has not hit the mass media yet, but assume in the next couple of weeks to month it will be hitting the airwaves, and will stir a lot of controversy. How is this loophole possible? The explanation is a bit complex but I will attempt to outline it as best as possible

The individual mandate portion of Obamacare will Start January 1, 2014. This individual mandate requires everyone to have health insurance. If your employer does not provide health insurance you will now be able to purchase health insurance through the Health Insurance Exchange. There will be subsidies for middle-income individuals, and low incomeIndividuals will be steered towards Medicaid. (Use the tax calculator to determine your potentional health insurance tax or subsidy amount)

  • If you make $11, 170 as a single person, $23,050 for a family of four— You will not get a subsidy for private coverage in the exchanges. Medicaid is your only option.
  • When Obamacare was written and passed in 2010, it assumed every state would expand Medicaid coverage. Therefore those who could not get a subsidy would get Medicaid which will be covered by the government for at least 95% for several years after 2014
  • Prior to the Affordable Care Act the waiting period for legal immigrants to get Medicaid was five years. However a compromise was reached that allowed low-income legal immigrants that have been in the U.S. for five or more years to get subsidies for private coverage within the Health Insurance Exchanges that will be established by January 2014
  • When the Supreme Court ruled that Obamacare was constitutional it also said that each states had the choice of accepting and rejecting the Medicaid expansion provision. However, the court did not go deeper and touch the issue of coverage for legal immigrants in the health insurance exchanges. The legal immigrant portion of the law remained untouched.

The result of this means even though a legal immigrant might not be eligible for Medicaid in their state, they will still get a subsidy to purchase private insurance in the health insurance exchange if they are in the middle-income class bracket. States that rejected the Medicaid Expansion provision of Obamcare, their poor residents that were previously not eligible for Medicaid based on the states standards will still not be eligible unless the state changes its requirement.

In summary low income, and poor people U.S. Citizen within the majority of the republican led states that have turned down the Medicaid Expansion provision of Obamacare will not be eligible for a government subsidy to support their purchase of Health Insurance, however if you are a legal immigrant that have been in the United States for five years or more you will be eligible for a subsidy regardless of what state you reside in.

This is a very large blow to many of the southern, and western states with large immigrant populations that are led by republican governors that have shut down any prospects of adhering to any portion of Obamacare. Here is list of states that have chosen the Medicaid provision of the Affordable Care Act.

If you are a resident of a state whose governor has turned down Medicaid Expansion, please give us your opinion on this loophole!

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