What Obamacare’s Onset Means for Racial Justice

The law's historic expansion of healthcare will begin on Oct. 1, but the working poor in half the nation will be left out.

By Imara Jones Sep 18, 2013

On Oct. 1–despite the threat of a government shutdown to stop it, and dozens of failed attempts in the House of Representatives to repeal it–the Patient Protection and Affordable Care Act, known as Obamacare, will become a tangible reality for millions of uninsured Americans. On that day, those without healthcare will be able to sign up for plans either on their own or through Medicaid, the nation’s healthcare program for the poor, working poor and their children. Medicaid currently covers 60 million people and under Obamacare could cover 13 million more.

But the forward movement on this fundamentally progressive law is not unqualified good news. That’s because the vast majority of those newly eligible for Medicaid under Obamacare–disproportionately people of color and those who work but don’t earn enough to live–won’t actually be able join it.

Why the disconnect?

The challenge is that last summer’s 5-4 ruling by the Supreme Court in the healthcare case found that states do not have to expand Medicaid. Though the law’s so-called individual mandate–which requires all uninsured Americans to acquire healthcare or face a tax penalty–grabbed media headlines and absorbed political attention, Medicaid is actually what matters most for historically marginalized communities.

The legal issue is that Medicaid, despite being funded overwhelmingly by the federal government, is technically a state-by-state partnership. Under the Affordable Care Act, 100 percent of the Medicaid expansion would have been paid for by Washington until 2019 and 90 percent thereafter. But as a voluntary collaboration between the states and the federal government, the court held that Medicaid cannot be forced open.

Whatever the legal rationale, the blunt fact is that the court’s opinion and the ensuing political free-for-all leaves the growth of Medicaid in a lurch and places fundamental issues of fairness at the heart of Obamacare’s implementation. The program’s importance to communities of color is hard to overstate. As the Kaiser Family Foundation points out, "Medicaid enables Blacks and Hispanic Americans to access health care." This statement is not an exaggeration: one out of three African Americans and Latinos receive healthcare through Medicaid.

By ruling that governors and state legislatures can opt out of Obamacare’s Medicaid expansion, the court opened the door for conservative-led states to head for the exits. They have done just that. Only 24 states will broaden access to the program on Oct. 1. According to Kaiser, this will mean up to six out of 10 people who are eligible for Medicaid will remain excluded.

The racial justice implication of Medicaid’s hobbled growth is stark. Nine out of the 13 Southern states, a region where more than half of all blacks reside, will not expand Medicaid. Texas, with the second largest population of Latinos in the country, is counted amongst them.

Almost all the states rejecting the growth of Medicaid have Republican governors or Republican-dominated legislatures. Mirroring the debate in Washington, state governors opposed to enlarging Medicaid say that their objection is one of dollars and sense. Texas Gov. Rick Perry told D.C.’s The Hill newspaper that his state would see "taxes skyrocket and our economy crushed as our budget crumbled under the weight of oppressive Medicaid costs."

But these claims don’t quite add up. As Harvard Professor David Cutler wrote in The New York Times, healthcare savings will allow companies to add up to 400,000 jobs and boost economic productivity by more than $200 billion each year, or $2 trillion over a decade. Additionally, taxpayers are already paying for the uninsured through the reimbursement to hospitals of emergency room costs. By law, emergency rooms must treat everyone regardless of the ability to pay, and the costs of ER services are often many times greater than preventative care for the same conditions.

More to the point, Medicaid expansion is actually for the working poor. Some states, such as Georgia, currently cover only individuals without children who make less than $11,000 a year. Under the new Medicaid rules, those who earn $15,000 a year–about the salary of a minimum wage worker–could receive the healthcare they currently lack through Medicaid. Overall, incentivizing work adds to a state’s tax base and decreases pressure on state budgets.

Of course, opposition to the Affordable Care Act has never been purely budgetary.

To be clear, Obamacare is in many ways bearing fruit. According to data released by the Census Bureau, the number of uninsured Americans fell slightly by 663,000 to 48 million last year in part due to ability of parents to keep their children insured until age 25 under the Affordable Care Act. The pace of rising costs in healthcare insurance have slowed from double digit jumps annually to just 4 percent last year for a family of four. Changes brought about by Obamacare mean that the costs of healthcare plans in states such as New York will fall by as much as 50 percent.

Moreover, the Patient Protection and Affordable Care Act contains many other important provisions for people of color. It creates an Institute of Minority Health at the National Institutes of Health, to advance research on ways to decrease health disparities for conditions like asthma, which kill African Americans at up to three times the rate of whites. And it prevents discrimination for chronic preexisting conditions, such as HIV/AIDS, that disproportionately impact blacks and Latinos.

That’s why on Oct. 1 anyone without insurance should log on to healthcare.gov to figure out where they stand. There, individuals can put in basic information such as age, income and state of residence. The site in turn will tell you whether your state provides Medicaid and all available options. Those interested in figuring out potential costs and benefits before Oct. 1 can go through a trial run by using the Kaiser Family Foundation’s healthcare calculator. Plans available for selection on Oct. 1 will not take effect until Jan. 1, 2014.

Given this new activity on healthcare, the opportunity to expand coverage for tens of millions of Americans through the act is a giant leap forward. As it’s been 50 years since the last dramatic increase in healthcare coverage–the birth of Medicaid in 1965–the path to get it right was bound to be complicated. But the fact that so many people will be left outside of the law’s expanded reach next month underscores how much work remains to bring affordable, quality healthcare to all.