The Supreme Court’s decision on the Defense of Marriage Act (DOMA) was met with much elation by advocates pursuing marriage equality. The federal government has been working, since that momentous decision was released, to clarify just how it impacts various types of health insurance coverage. Most recently, the Center for Medicare and Medicaid Services (CMS) released guidance about how states should make most Medicaid eligibility determinations* for same-sex married couples. This guidance lets states choose whether or not to recognize the marriages of same-sex couples in determining adults’ eligibility for Medicaid.
In states already allowing same-sex marriage (regardless if passed by court ruling, legislative action, or popular vote), this should be a non-issue: states will likely recognize all married couples for benefit determination. The real question is whether states that do not allow same-sex marriage will recognize the marriages of couples who live in a state without marriage equality but were wed in a state that allows it.
It’s important to note that no matter what states do about Medicaid eligibility, the IRS will recognize marriages of same-sex couples regardless of where they live (as long as they were married in a state that allows it) when determining eligibility for tax credits in the Marketplaces for private health insurance. The CMS guidance essentially lets states decide whether or not to align their Medicaid eligibility rules with these Marketplace rules.
What’s at stake
Eligibility for Medicaid is based on two factors that could be influenced by whether a person is considered married: household income and household size. So in states that have not chosen to recognize legally-married, same-sex couples, those couples will sometimes be eligible for different insurance options than different-sex couples at the same income level. Also, some same-sex couples will be required to sign up for two different insurance plans rather than being on one plan together.
For example, imagine a legally-married, same-sex couple: John and Jeff. John earns $16,000 a year, or 139 percent of the federal poverty limit (FPL) if John were considered a household of one. Jeff earns $4,000 a year, or about 35 percent FPL for a household of one. They live in Arizona, where same-sex marriage is not legal. But, they were married in Massachusetts, where it is.
If they were a different-sex couple, Arizona would automatically treat them as a household of two with an income of $20,000 (or 129 percent FPL.) At that income, they would both be eligible for Medicaid; they would be able to enroll in a Medicaid plan without any premiums.
But, the CMS regulations allow Arizona to determine how to qualify this family. If Arizona chooses to recognize John and Jeff’s marriage from Massachusetts, they will qualify in the same way a different-sex couple does, and find them Medicaid-eligible. But, if Arizona chooses not to recognize their marriage, only Jeff would qualify for Medicaid (since he earns 35 percent FPL as an individual). John, who earns 139 percent FPL as an individual, earns just a bit too much for Medicaid when he’s considered a household of one. He may qualify for tax credits on the Marketplace, but he will be on a separate plan from his spouse and will likely have to pay premiums for that plan.
Even though in this example, John and Jeff’s marriage recognition resulted in lower costs, and Medicaid eligibility, there may be other circumstances where Jeff and John encounter higher health insurance costs as a married couple. But, this is not different from the various situations any married couple—gay or straight—regularly faces. At the end of the day, if we believe that all married couples at the same income level should be eligible for the same financial assistance, and if we believe that same-sex married couples should have the same opportunities as different-sex couples to be on the same plan as their partner, then we need state Medicaid departments to recognize the marriages of legally-wed same-sex partners.
All states will have to submit a State Plan Amendment to specify whether or not the state recognizes same-sex marriages for the purposes of Medicaid and CHIP eligibility. Details about the timing of that State Plan Amendment are still forthcoming, but it’s never too soon to check in with your state Medicaid Department to figure out how it plans on handling this decision.
*An important caveat: This guidance only applies to Medicaid applicants whose eligibility is based on Modified Adjusted Gross Income, which is most low-income people applying as parents or childless adults. Guidance governing eligibility determinations for others (such as people who need long-term services and supports, people who qualify based on being blind, disabled or elderly, people in foster care, etc) is forthcoming.