Medicaid Discrimination?

July 26, 2009 10:13 AM

HealthInsurance Filter: If a friend goes on Medicaid in dire financial straits, will insurers be able to discriminate against her later?

A friend hit serious financial problems due to an injury. Currently has good insurance, but can't afford it much longer and is waiting to be approved for disability. If she goes on Medicaid and then recovers, will her attempts to get health insurance be forever scarred by having done so? I didn't think it was legal to discriminate based on previously having been on Medicaid (obviously, they can deny pre-existing condition coverage but that's true no matter what insurance you switch to or from). Anyone know? Is this illegal but done anyway? Any idea where to find out?

posted by Maias to health & fitness (6 comments total)

The health insurance forum at Expert Law would be a good place to ask this question. What the average person regards as discrimination and what the law regards as discrimination are often two different things - they'll be able to clarify the actual legal considerations.
posted by Lolie at 11:58 AM on July 26

I can't quite figure out why an insurer would care about it.
posted by mzurer at 12:46 PM on July 26

As far as I know--and I'm no expert--being on Medicaid per se isn't grounds for adverse action by health insurers. But like every kind of insurance, being uninsured is such a ground, and being on Medicaid is being uninsured for all intents and purposes.

Also, you should be careful about the term "discrimination," as it has both a broad usage and a narrow, legal usage, only the latter of which has a negative connotation. So for example, while being turned down for a loan or for car insurance based on a poor credit history does constitute "discrimination" in a broad sense, this isn't a sense of the term that the law cares about. The law, specifically the United States Constitution and its related jurisprudence, only protects against discrimination based on certain suspect or protected classes, chiefly race. Being discriminated against on the basis of gender is a kind of semi-protected class, but age and economic status are afforded no protection under the Constitution. Like you say, insurers can "discriminate" on the basis of pre-existing conditions without fear of reprisals, and they can also do this for lapses in coverage which last longer than a few months.

So if your friend finds herself uninsured and needs health care during that time, she may have to apply for something like Medicaid. Under those facts, she may have trouble getting health insurance down the line, but it will be due to her lapse in coverage, not her use of Medicaid.

One last thing: getting Medicaid benefits is not as easy as signing up for them. Eligibility requirements are pretty stiff. For example, to qualify for Medicaid in Indiana, a single person needs to have earned monthly income of less than $140 and assets less than $1000. This would make you pretty damned poor. That's not even a part time, minimum wage job right there. If she had insurance before and expects to get insurance again, it's doubtful that your friend would quality.
posted by valkyryn at 2:04 PM on July 26

I'm not aware of any discrimination or refusal to cover based on prior use of or eligibility for Medicaid. That doesn't mean it never happens, of course.

This is not quite the answer to your question, but check to see if the state has an insurance continuation program. Some states have programs that will essentially pick up the insurance premiums for someone who is eligible for coverage, as it is less expensive than full Medicaid coverage for the state. It may be called Health Insurance Premium Payment Program or something along those lines. For example, New Hampshire's program.
posted by gingerbeer at 2:40 PM on July 26

This person has, in some sense, fallen out of the middle class and would like to be able to return to it as smoothly as possible when she is able to work again. So, yes, she qualifies due to her disability, lack of income and level of debt.

Why would being on Medicaid count as being "uninsured"? It's not a lapse in coverage if she goes from regular insurance to Medicaid without a gap, surely?
posted by Maias at 3:48 PM on July 26

Being on Medicaid would not be seen as being uninsured. It is insurance after all. During college, I was on Medicaid (originally under my disabled mother's case as a dependent) and that fulfilled my school's requirement that we have health insurance.

I highly doubt an insurer would care in the future. It's just changing insurance.
posted by cmgonzalez at 12:08 AM on July 27