(Bloomberg) -- Rose Ruiz collects $8 an hour cooking, cleaning, checking the oxygen tanks and changing the diapers for a 67-year-old diabetic confined to a studio apartment on the south side of Austin, Texas.
Ruiz, a home health aide to Medicaid patients, has no medical insurance herself. Her best shot at getting access to doctors and medicines for her own needs was through President Barack Obama’s expansion of the federal-state Medicaid programs.
That hope was scuttled for Ruiz and thousands of other health care workers across Texas when the state opted out of the Medicaid expansion earlier this month. Texas has the highest rate of uninsured people in the U.S.
“The politicians don’t know where I’m coming from, they don’t walk in my shoes,” says Shantelle Williams, a home aide who makes the U.S. minimum wage of $7.25 an hour tending to patients just south of Dallas. “That decision was for them, it wasn’t for me.”
Expansion of Medicaid eligibility was intended to provide coverage for the working poor, those with incomes barely exceeding the poverty line yet low enough that they would struggle to make premium payments on insurance bought through the new exchanges set to open Oct. 1. Though last year’s U.S. Supreme Court ruling upheld the Affordable Care Act, it also let states choose not to expand Medicaid.
Minimum wage
That has left people like Ruiz, Williams and 4.4 million others in the 19 states that have opted out of Medicaid expansion in a bind. They would need pay raises potentially triple their current wages or more, depending on the size of their families, to reach enough income to qualify for government subsidies for private insurance.
The irony for these workers is that the wages companies pay for home health aides are guided by Medicaid, averaging just less than $10 an hour nationally, says William A. Dombi, vice president for law at the National Association for Home Care and Hospice. That precludes their employers from paying much beyond minimum wage.
“It’s one of these things that I’m sure nobody thought about when they were putting this together,” Dombi says.
The expansion of Medicaid programs for the poor was one of two pillars of Obama’s plan to help provide medical coverage to most of the nation’s 50 million uninsured people. Since the Supreme Court ruling last summer, Texas Governor Rick Perry and others have taken up the decision as a rallying cry against the law. The result according to Obama administration officials is that many will go without coverage in states that have opted out.
‘Huge gap’
“We are very concerned that in some states there will be people who are not at 100 percent of poverty so they will not, absent Medicaid expansion, qualify for any financial assistance for health insurance,” Kathleen Sebelius, the U.S. health secretary, said this in a briefing for reporters.
“There will be a huge gap between what they can afford and what is available,” she said.
Texas’ decision to forgo expanding Medicaid also complicates business for Ruiz’s employer, Helping the Aging, Needy and Disabled Inc., an Austin nonprofit, which under ACA rules must offer insurance to its health aides to avoid paying fines. Expanding Medicaid, Dombi says, is an easy way to cover the workers and relieve their employers of the threat of fines of as much as $3,000 per employee.
“It would be devastating to us to have to pay any penalties,” says Amy Temperley, the executive director of the Austin nonprofit that employs Ruiz. “We don’t have reserves like a private company.”
Poverty level
Anyone earning 138% of the poverty level or less, or about $32,500 for a family of four, will be eligible for Medicaid in states that choose to expand the program. In states that don’t, eligibility for federal subsidies to buy private coverage starts at $23,550 for the same size family.
Those earning below those levels can’t get assistance with their insurance premiums. Low-income people are also rendered ineligible for subsidies if they have an offer of insurance deemed “affordable” under the law, meaning that it costs no more than 9.5% of their incomes.
That sets up a tricky calculation for any business that employs low-income people, says Steve Wojcik, vice president for public policy at the National Business Group on Health in Washington, a lobbying group for large companies offering health insurance including Boeing Co., Kroger Co. and Apple Inc.
“By offering coverage they likely disqualify the employee and dependents from qualifying for federal subsidies,” he says. Yet the coverage may be too much for the employee to afford. “Lots of employers are really agonizing with the decision leading up to 2014.”
‘Unsustainable system’
Perry’s spokeswoman, Lucy Nashed, says the Texas governor seeks “common sense” changes to the existing program rather than expanding Medicaid benefits. “Medicaid is a broken, unsustainable system,” she says.
For Ruiz and the 6.1 million Texans who lack health insurance, about a quarter of the state’s population, such concerns are academic. She works 22.5 hours spread over five weekday mornings, at the east Austin home of Marisela Lopez, 34, who hasn’t walked since birth. Lopez spends her day in a scooter in the family’s living room, which is filled with family photos, small prayer candles, a television and her bed.
Wearing a burnt orange University of Texas Longhorn t-shirt, she praised Ruiz for her companionship as they watch professional wrestling, movies and day-time talk shows. To help Lopez bathe and dress, Ruiz lifts her from her scooter in the bathroom.
Ruiz also spends 17 hours on Friday, Saturday and Sunday with Kathleen Borm, 67, a diabetic confined to her bed in her south Austin apartment. At Borm’s home, Ruiz cooks a lunch of sausage covered by a sprinkling of melted cheddar cheese. While Ruiz doesn’t have any medical licenses and can’t administer medicine, she cleans the apartment, changes Borm’s diaper and checks her oxygen equipment, including a sleep apnea machine.
Helping people
Her friends think the work of home health aides is “wiping butts for a living,” Ruiz says. “But I look at it as taking care of people who need help more than anyone else.
For her efforts, Ruiz takes home $540 every two weeks, not enough, she says, to afford to buy her own health insurance. Her husband, Jose, 42, is disabled and unemployed, and the couple has seven children from their current and previous relationships.
Nationally, about 37% of home health workers were uninsured in 2009, according to the Paraprofessional Healthcare Institute, a nonprofit group in New York that supports home health aides. That figure climbed to 45% in four western-southern states including Texas, the institute says.
Growing number
The percentage of uninsured in Texas has inched up from 22% in 1990s with Latinos making up more than half of those lacking coverage, says Juan Flores, executive director of La Fe Policy Research and Education Center, a San Antonio nonprofit that advocates for low-income people. “Any improvements have been incremental and we really haven’t dealt with this uninsured problem,”
Texas legislators have shown some support for home-health aides serving Medicaid patients, voting to raise their minimum wage from $7.25 an hour, the national minimum, to $7.50 an hour starting on Sept. 1 and $7.86 an hour in 2015, says Rachel Hammon, executive director of the Texas Association for Home Care & Hospice in Austin.
The home care group joined associations representing Texas doctors, hospitals and chambers of commerce to lobby for expanding Medicaid. Many home-health aides would have qualified for Medicaid, says Jennie Baird, the president of the trade group who also runs the for-profit company Angels at Home Inc.
“It is shameful,” says Baird who added she often supports Perry’s efforts to limit state spending. “With a business with low-income workers like pizza delivery or fast food restaurants, they can pass on their higher rates to customers. But we can’t do that because our rates are set by the federal and state government.”
