Rachel Garfield Follow @RachelLGarfield
on Twitter, Robin Rudowitz Follow @RRudowitz on
Twitter, and Anthony Damico Published: Jun 25, 2020
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TABLES
Summary
As the country grapples with the public health
and economic consequences of the coronavirus pandemic, there has been a renewed
focus on coverage options that may be available to individuals who lose income,
jobs and potentially employer sponsored insurance (ESI). The Affordable Care
Act (ACA) established new coverage options through Medicaid or subsidized
coverage through ACA marketplaces. Millions of people are enrolled in or
eligible for coverage through these new pathways. However, in states that do not
expand Medicaid, many adults, including almost all childless adults, fall into
a “coverage gap” because their incomes are above Medicaid eligibility limits
but below the poverty level, which is the lower limit for Marketplace premium
tax credits. As more people lose their jobs and accompanying ESI, more may fall
into the coverage gap, particularly starting in 2021 after unemployment
benefits expire for many who have lost their jobs and incomes are likely to
drop below the minimum threshold for marketplace subsidies. This analysis
estimates how many uninsured adults—including those uninsured even before the
pandemic and those who could become uninsured as a result of it— could become
eligible for Medicaid if states that have not yet expanded the program do so.
Methods underlying the analysis are detailed in the methods section at the end
of the brief. Key findings include the following:
·
If the 14 states that
have not adopted the Medicaid expansion to date do so, an estimated 2.8 million
adults who were uninsured in 2020 would move out of the coverage gap by 2021
and instead have access to Medicaid coverage. An additional 2.1 million
previously uninsured adults who are eligible for marketplace subsidies in
non-expansion states would instead become eligible for Medicaid, with much
lower out-of-pocket costs for premiums and cost sharing.
·
In addition, some
people who lose employer sponsored coverage and become uninsured as a result of
the current economic downturn would become eligible for Medicaid rather than
fall into the coverage gap. Based on analysis estimating that nearly 27
million could lose ESI and became uninsured as a result of recently becoming
unemployed, we find that 1.9 million more who otherwise would be in
the coverage gap could gain Medicaid eligibility by January 2021 if all states
adopted the expansion. Just over a million additional people who could
potentially lose ESI and became uninsured with incomes between 100-138% FPL
would also become eligible for Medicaid instead of marketplace subsidies.
·
In total, if
non-expansion states expanded Medicaid under the ACA, about 4.7 million adults
who would otherwise fall into the coverage gap by 2021 would gain eligibility,
and an additional 3.3 million adults would become newly eligible for Medicaid
coverage instead of marketplace coverage. In addition, there are a small number
of uninsured adults already eligible for Medicaid in non-expansion states;
their eligibility would not change if their states expanded, but increased
outreach could lead them to enroll in coverage. Including the small number of
currently eligible non-elderly adults in these states, the total reach of
Medicaid among uninsured nonelderly adults in non-expansion states could be
nearly 10 million.
Potential Reach of
Expansion among Adults Uninsured Prior to Pandemic
In states that have not
expanded Medicaid, many uninsured adults below poverty, including most
childless adults, fall into a “coverage gap.” Under the ACA, Medicaid eligibility is
extended to nearly all low-income individuals with incomes at or below 138
percent of poverty ($17,609 for an individual in 2020). While the Medicaid
expansion was intended to be national, the June 2012 Supreme Court ruling
essentially made it optional for states. As of May 2020, 14 states had not expanded their programs.
Medicaid eligibility for adults in states that did not expand their programs is
quite limited: the median income limit for parents in these states is
just 41% of poverty, or an annual income of $8,905 for a family of
three in 2020, and in nearly all states not expanding, childless adults remain
ineligible. Further, because the ACA envisioned low-income people
receiving coverage through Medicaid, it does not provide financial assistance
to people below poverty for other coverage options. As a result, in states that
do not expand Medicaid, many adults, including all childless adults, fall into
a “coverage gap” of having incomes above Medicaid eligibility limits but below
the poverty level, which is the lower limit for Marketplace premium tax
credits.
Among adults uninsured even
before the pandemic, an estimated 2.8 million poor uninsured adults would fall
into the “coverage gap” that results from state
decisions not to expand Medicaid by 2021. This number includes the 2.3 million in the coverage gap
without accounting for the effects of the pandemic and an additional half a
million individuals in non-expansion states who did not have insurance in early
2020 and are estimated to lose Marketplace eligibility by 2021 due to job
losses. Individuals in the gap have income that is above current Medicaid
eligibility but below the lower limit for Marketplace premium tax credits.
Reflecting limits on Medicaid eligibility outside ACA pathways, most people in
the coverage gap (81%) are adults without dependent children. Adults left in
the coverage gap by 2021 are concentrated in the South, which accounts for 9
out of 14 states that have not expanded. Of those in the gap, one-third live in
Texas, 18 percent in Florida, 12 percent in Georgia, and eight percent in North
Carolina. There are no uninsured adults in the coverage gap in Wisconsin
because the state is providing Medicaid eligibility to adults up to the poverty
level under a Medicaid waiver.
If states that are currently
not expanding their programs adopt the Medicaid expansion, all of the 2.8
million adults in the coverage gap would gain Medicaid eligibility (Table 1 and
Figure 1). In addition, 2.1
million uninsured adults with incomes between 100 and 138% of
poverty (most of whom are currently eligible for Marketplace coverage)
would also gain Medicaid eligibility, substantially lowering the out-of-pocket
costs for premiums and cost-sharing they would otherwise face. A smaller number
(about 757,000) of uninsured adults in non-expansion states are already
eligible for Medicaid under eligibility pathways in place before the ACA. If
all states expanded Medicaid, those in the coverage gap and those who are
instead eligible for Marketplace coverage would bring the number of nonelderly
uninsured adults eligible for Medicaid to about 5.7 million people in the
fourteen current non-expansion states. The potential scope of Medicaid varies
by state.
Figure 1: Nonelderly
Adults in Non-Expansion States Who Were Uninsured Before the Pandemic and Would
be Eligible if Their State Expanded, January 2021
Potential Reach of
Expansion among People Losing ESI after Job Loss
The economic consequences of
the coronavirus pandemic have led to historic level of job loss in the United
States. Social distancing
policies required to address the crisis have led many businesses to cut hours,
cease operations, or close altogether. Between March 1st and May 2nd, 2020,
more than 31 million people filed for unemployment insurance and an estimated nearly 78 million people lived in a family in
which someone lost a job. Most people in these families (61%, or 47.5
million) were covered by ESI prior to job loss. Previous KFF estimates showed
that nearly 27 million people could lose ESI and became uninsured following job
loss. In some cases, employers may be continuing health benefits for furloughed
or laid off workers, but that will likely end if unemployment remains high.
Some people in this group can elect to continue ESI for a period by paying the
full premium (called COBRA continuation) or may become eligible for Medicaid or
subsidized coverage through the ACA marketplaces. While the state unemployment
insurance benefit payments and federal supplement available to most people mean
few will fall into the coverage gap immediately, a larger number could find
themselves in the gap after these benefits expire.
Nationally, coverage losses
among people who previously had ESI and lost their jobs could lead an
additional 1.9 million adults to fall into the coverage gap by January 2021. Recent analysis shows that by January 2021,
when unemployment insurance (UI) benefits cease for most people, an estimated
1.9 million could fall into the coverage gap. People who lose ESI and find
themselves in the coverage gap by January 2021 are concentrated in Georgia
(21%), Texas (20%), and Florida (18%).
If all states adopted the
expansion, 1.9 million newly uninsured adults who otherwise would fall into the
coverage gap would instead be eligible for Medicaid (Figure 2 and Table 2). If all states adopted the expansion, these
individuals would be eligible for Medicaid. In addition, an estimated 1.2
million individuals with incomes between 100-138% FPL who otherwise would be
eligible for marketplace subsidies would also become eligible for Medicaid if
all states expanded. Counting the 1.1 million adults in non-expansion states
who are already eligible for Medicaid even without expansion (and whose
eligibility would not change), the total number of newly-uninsured adults who
could be eligible for Medicaid in non-expansion states would be 4.2 million.
Figure 2: Nonelderly
Adults Who Became Uninsured Due to Pandemic Job Losses (March 1 – May 2) and
Would Be Medicaid Eligible if Their State Expanded, January 2021
In total, if non-expansion states expanded Medicaid under the ACA,
about 4.7 million adults who would otherwise fall into the coverage gap by 2021
would gain eligibility (Table 3). An additional 3.3 million adults would become
newly eligible for Medicaid coverage instead of marketplace coverage. Including
the small number of currently eligible non-elderly adults in these states, the
total reach of Medicaid among uninsured nonelderly adults in non-expansion
states could be nearly 10 million.
Looking Ahead
Given the health risks
facing all Americans right now, access to health coverage after loss of
employment provides important protection against catastrophic health costs and
facilitates access to care. This is the first economic downturn during which
the ACA will be in place as a safety net for people losing their jobs and
health insurance. Without it, many more people would likely end up uninsured as
the U.S. heads into a recession. However, if all states adopted the expansion,
more people would have options for affordable coverage and not fall into the
coverage gap. These estimates show increases in eligibility but do not account
for take-up or enrollment in coverage. Individuals currently in the coverage
gap as well as those who may be newly eligible for coverage due to job loss may
not know they are eligible for ACA coverage or may need assistance in applying
to enroll in coverage. The federal government covers 90% of the cost of
coverage for Medicaid expansion enrollees, leaving states with 10% of the expense,
an amount that could grow if job losses increase. However, some research that
pre-dates the pandemic shows that states may experience net budget savings
following Medicaid expansion after accounting for resulting reductions in the
cost of other state programs.
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Methods
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This analysis
draws on KFF’s estimates of the number of adults that fall into the Medicaid coverage gap as
well as ACA eligibility among people losing
employer-sponsored insurance (ESI) due to the coronavirus
pandemic. Detailed methods underlying both those analyses, both of which are
based on the 2018 American Community Survey, are available via the links
above. Notably, in contrast to previous coverage gap estimates, the estimates
in this brief are based on estimated 2020 population. In order to estimate
the 2020 population within each state, we linearly extrapolated 2020 state
population estimates based on 2018 and 2019 population estimates from
the U.S. Census Bureau to determine a population increase factor between 2018
and 2020 within each state. We then applied this multiplier to the weight of
each individual in the microdata to approximate state population sizes in
mid-2020 rather than mid-2018. Coverage gap numbers in this analysis also
differ from previous KFF estimates in that they include people who, absent
the pandemic and estimated related job loss/loss of income, were uninsured
but eligible for marketplace premium subsidies; with the loss of jobs and
income, they instead fall into the coverage gap.
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