What is the Medicaid Notch? Do you think that the Medicaid Notch is a realistic

Question

What is the Medicaid Notch? Do you think that the Medicaid Notch is a realistic concept? Let’s say that you are poor with limited income and cannot afford medical insurance. You have a Medicaid benefit (up to $4,000) that will come to you provided that you earn less than $12,000 per year. You are earning $11,000 a year right new, but due to your rising skills, you are offered a job that pays $12,500. You think that the new job will lead to something even better in the future, but you can't be certain about this because you cannot really predict the future. What would YOU do?

Explanation / Answer

Medicaid notch is a situation where one instantly loses $2000 in Medicaid coverage when he/she earns an extra dollar. This extra dollar earned makes the income of the individual to exceed the amount of income considered for the coverage by as little as one dollar. Medicaid notch is not a realistic concept because it does not take the medical needs of families into consideration i.e. it does not consider the welfare of families for Medicaid eligibility so long as their income exceeds the required amount by just one dollar.

I would not take the new job since I cannot predict if it will lead to something good in future. I shall let it go because taking it will lead to instant loss of $4,000 in Medicaid coverage for an additional income of just $1,500 since my income would have exceeded the maximum amount of $12, 0000 required for the coverage.

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