Low Income Subsidy in Medicaid Health Insurance

The Medicaid insurance policy has a section of low-income subsidy which allows medical beneficiaries to those individuals with low income status. The Medicaid extra help program allows the individuals with low income status to get benefit of paying for monthly premium, annual deductibles and health insurance payments. The low income subsidy or (LIS) section under the Medicaid health insurance is available to families with limited income and is included under the Medicaid Part D prescription drug program. However, both Medicare health insurance policies and Medicaid health coverage program do not have complete coverage of population with low income status. There are substantial gaps in protecting the low income families as well as the elderly aged population by Medicare low Income Subsidy (LIS) section. Learn more about the accessibility and affordability issues for low-income families and elderly aged population.

Running head: HEALTHCARE POLICY ISSUE
Healthcare Policy Issue
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1HEALTHCARE POLICY ISSUE
Low income subsidy
Health care in United States is accompanied with exorbitant costs for an increasing
population to meet the demands of care quality. The Medicaid insurance policy has a section
of low-income subsidy which allows medical beneficiaries to those individuals with low
income status. The Medicaid extra help program allows the individuals with low income
status to get benefit of paying for monthly premium, annual deductibles and health insurance
payments. The low income subsidy or (LIS) section under the Medicaid health insurance is
available to families with limited income and is included under the Medicaid Part D
prescription drug program (Decarolis, 2015). The individuals who are permissible under the
extra help program or LIS of Medicare still suffer from medical billing of prescription drugs;
it means that there is no coverage gap of drug prescriptions. The amount of paying subsidy
and premiums is dependent on the individual annual income as compared to the federal
poverty threshold.
Statistics
The Medicaid health insurance provides stability and trust for population, however,
40% of the Medicaid beneficiaries are having low income and they spend a significantly
higher percentage of their income on health care premiums. Therefore, these individuals are
at considerable risk of financial cost hardships. Only 56 percent of the low income population
has been covered under the Medicaid low income subsidy policy (LIS); approximate
estimation shows that one-third of that population are below the federal poverty threshold
which is less than $18000 annual income for an individual(Schoen et al., 2018).For the
families with low income status annually, the Medicaidprogram on annual health care
premium costs and the hospital deductible charges pose an exorbitant financial cost for these
people; this includes service costs of the physicians, medical drugs and related medical

2HEALTHCARE POLICY ISSUE
assistance. Population under the federal poverty limit are eligible for Medicare beneficiaries,
however, only one-third of the below poverty limit are actually on Medicare health care
financial assistance (Schoenet al., 2017). This means that the near-poor families have only
limited access to financial cost assistance unless they are on high expenditure and meagre
savings. According to approximate estimations, for people with income status below 150
percent of poverty, only 43 percent even less than that receive the financial assistance for
health care cost burden.
Accessibility
The Medicaidhealth care coverage program was designed to reduce the health care
cost burden, however the accessibility and affordability by the low-income families are an
issue and therefore, they still suffer from high health care costs. However, both Medicare
health insurance policies and Medicaid health coverage programdo not have complete
coverage of population with low income status. There are substantial gaps in protecting the
low income families as well as the elderly aged population by Medicare low Income Subsidy
(LIS) section (Naciet al., 2014). One –third of the low income families received financial
beneficiaries; these people have income status below 150 percent of federal poverty limit. To
qualify for Medicaid LIS policy, the low income has to be below the level of 75 percent of
poverty line.
From my professional experience I have also learnt that a reduced accessibility to
healthcare services is a significant reason for its under utilization, while a lower
socioeconomic status can contribute to a reduced accessibility and affordability of healthcare
services. Therefore, providing a complete coverage of healthcare costs for people under the
poverty level is an important consideration for healthcare delivery systems.This however is
also a significant concern related to the healthcare expenses in developing countries since the

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provision of complete coverage of healthcare costs often entails a higher healthcare
expenditure of the government.

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References
Decarolis, F. (2015). Medicare part d: Are insurers gaming the low income subsidy design?
American Economic Review, 105(4), 1547-80.
Naci, H., Soumerai, S. B., Ross-Degnan, D., Zhang, F., Briesacher, B. A., Gurwitz, J. H., &
Madden, J. M. (2014). Medication affordability gains following Medicare Part D are
eroding among elderly with multiple chronic conditions. Health Affairs, 33(8), 1435-
1443.
Schoen, C., Davis, K., &Willink, A. (2017). Medicare Beneficiaries' High Out-of-Pocket
Costs: Cost Burdens by Income and Health Status. Issue brief (Commonwealth
Fund), 11, 1-14.
Schoen, C., Davis, K., Willink, A. and Buttorff, C. (2018). Policy Option to Enhance Access
Medicare Low-Income Beneficiaries | Commonwealth Fund. Commonwealthfund.org.
Available at:
https://www.commonwealthfund.org/publications/issue-briefs/2018/sep/medicare-
low-income-beneficiaries [Accessed 13 Jan. 2019].