An op-ed in today’s New York Times tells the story of a young California couple that got in a car accident–and in doing so, shows both the best and the worse of the California’s health care safety net.
The woman was pregnant, and while she suffered spine injury that paralyzed her from the neck down, her baby survived. It took significant medical treatment, but the baby was and is covered, thanks to California’s safety net for children: the Access for Infants and Mothers (AIM) program for pregnant women and newborns, and now the Healthy Families (CHIP) program.
The mother is covered, but under Medi-Cal, with some fairly onerous restrictions on their life and livelihood, including an asset test that seems designed to trap people in poverty.
When the AIM coverage expires, 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. Family members like me cannot give them financial help, at least not officially. If either of them receives an inheritance, it will go to Medi-Cal. Medi-Cal services that my sister-in-law uses after age 55 will be added to a tab that she will rack up over the rest of her life. When she and my brother die, the state will put a lien on their estate; their child may inherit nothing. Even my brother’s hobby runs afoul of the asset test: he enjoys working on old cars, which he can no longer keep.
These are the limitations under which 7.5 million Medi-Cal recipients live.
So while in some areas of social policy, we work to educate low-income families about the need to keep at least three months rent saved up in case of emergencies, actually following that advice would cause a family to lose their health care. Thankfully, the asset test is eliminated for low-income families under the Affordable Care Act in 2014.
That’s just one of many changes that would improve their lives under the new law, from no denials for pre-existing conditions, to the opportunity to financial help with insurance premiums even as they seek to move back up the income ladder. The sister, living across the country in Massachusetts, describes some of the benefits already in place there–it truly is a tale of two states.
Until 2014, we hope. In fact, as the op-ed states, “Their best hope is the survival of the Obama reform.”