Republican Gov. Bill Haslam's refusal so far to expand Medicaid under federal health reform could mean that Tennessee's poorest residents won't have access to health coverage in 2014 but some lawful immigrants will, experts say.

That's because legal immigrants with incomes below 100 percent of the poverty level -- $11,170 for a single person or $23,050 for a family of four -- will be eligible for federal subsidies to buy private coverage through health insurance exchanges.

American citizens with the same income levels, however, can't participate in the exchange because the law envisioned those with incomes up to 138 percent of the poverty level would be covered through the Medicaid expansion.

The politically ticklish contrast came about as a result of last year's U.S. Supreme Court ruling on the 2010 Affordable Care Act.

The act aims to provide coverage to millions of lower-income people in two ways. One is to mandate that most people have health insurance and to help those who can't afford it by subsidizing purchase of private coverage on new state health insurance exchanges. People with incomes up to 400 percent of the federal poverty level could get subsidies.

The other is by expanding state Medicaid programs, which now cover mostly low-income pregnant mothers, children and some disabled people, to everyone whose income is up to 138 percent of the federal poverty level.

The court upheld the law but made Medicaid expansion optional rather than mandatory for states. Georgia, Alabama and many other Republican-led states have ruled out the expansion.

The prospect that legal immigrants, such as workers and refugees, will be insured but not the state's poorest residents is "quite an irony," said Ron Pollack, executive director of the Washington-based health advocacy group Families USA.

He said Arizona's Republican governor, Jan Brewer, cited that fact among others when she recommended her state expand Medicaid.

Matt Salo, executive director of the National Association of Medicaid Directors, said the Supreme Court ruling sets up a political dilemma.

"If you're a state that doesn't do the expansion, there will be two groups of people below 100 percent of the poverty level: citizens, who will likely get nothing, [and] legal immigrants, who get fully subsidized coverage in the exchange. ... That's not going to sit well with folks."

Haslam hasn't ruled out an expansion of the state's program, which is called TennCare, and is negotiating with federal officials to give the affected population -- an estimated 180,000 people -- access to the exchanges.

The expansion comes with an incentive -- the federal government picks up the entire cost for the first three years before gradually decreasing its share to 90 percent.

The governor's "Tennessee Plan" basically would allow the state to use that money to buy insurance on the exchange for the new enrollees with incomes up to 138 percent of the poverty level.

The proposal would require a waiver of Medicaid rules, and it's unclear whether federal officials will agree.

Even if they do, Haslam will need stout political muscles to get his plan through the GOP-led Legislature, given many members' opposition to "Obamacare."

At the same time, however, Tennessee Republicans have pushed any number of measures targeting immigrants, whether legal residents or not.

Haslam spokesman David Smith last week called the governor's plan "true health care reform specifically tailored for the state," but did not address a reporter's question about the resident/immigrant disparity.

Democrats in the just-completed legislative session pushed for approval of the Medicaid expansion.

State Democratic Party spokesman Brandon Puttbrese said Haslam and the Republican majority "betrayed Tennesseans who work for a living."

"Expanding access to reliable health coverage is key to reclaiming financial security for working and middle-class families," Puttbrese said.

"The consequences of Governor Haslam's do-nothing leadership are that foreign-born immigrants pursuing the American Dream will have a leg up on born-and-bred Tennesseans," he added.

Legal immigrants living in the country less than five years aren't eligible for Medicaid but would be eligible for the exchanges.

Attorney Michele Johnson with the Tennessee Justice Center, who supports Medicaid expansion, said the 2010 federal law was built on the existing health care system and the Supreme Court "sort of ripped one of the pieces out" by making expansion voluntary.

"When you pull out that one piece of the puzzle, you have weird things happen," she said, noting many immigrants lawfully in the country work and pay taxes.

Contact staff writer Andy Sher at asher@timesfree or 615-255-0550.


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