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Report: 5.2 Million Adults Will Fall Into ACA Coverage Gap Next Year

By Phil Galewitz

October 16th, 2013, 5:37 AM

About 5.2 million poor, uninsured adults will fall into the “coverage gap,” created by 26 states choosing not to expand Medicaid under the federal health law next year, according to a study released today by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

These people are projected to have incomes too high to qualify for their state’s existing Medicaid programs, but below the federal poverty level (nearly $11,500 for an individual) required to be eligible for federal subsidies to buy private coverage on the new online insurance marketplaces set up by the Affordable Care Act. Medicaid is the state-federal health insurance program for the poor.

“Millions of adults will remain outside the reach of the ACA and continue to have limited, if any, options for health coverage,” the study concludes.

The law provides full federal funding for three years to states that expand Medicaid to cover residents under 138 percent of the poverty level (or just under $15,900 for an individual). But the Supreme Court made that requirement effectively optional for states, and most Republican led-states have opted against expanding the program.

There is no deadline by which states must opt to expand Medicaid, and a few states are still considering it.

Nearly half of the uninsured in the coverage gap live in Texas (1 million), Florida (763,980) and Georgia (409,350) — largely because those states have the most uninsured and limited Medicaid eligibility today.

Alabama, Mississippi and Louisiana also will be especially hard hit, with more than a third of their uninsured adults falling into the coverage gap next year, the study shows. These states will feel the pinch because they have higher rates of poor uninsured adults and their existing Medicaid programs have some of the nation’s the tightest eligibility rules. Nationally, about 27 percent of uninsured adults in states not expanding Medicaid will find themselves in that gap, the study said.

The study excludes illegal immigrants because they would not have been eligible for coverage under the law. The study was based on  Census data from 2012 and 2013 as well as on state Medicaid eligibility rules for 2014.

13 Responses to “Report: 5.2 Million Adults Will Fall Into ACA Coverage Gap Next Year”

  1. Bob Foster says:

    Mr. Galewitz describes the people in the gap as having income “below” the FPL. Medicaid expansion was to take the upper income limit for Medicaid from roughly there up to 135% of the FPL, as well as eliminating the requirement that recipients be aged, disabled or blind, effectively opening Medicaid up to anyone in the applicable income range. My comment is that these are not people BELOW the FPL, but those just above it. Perhaps I’m missing something or perhaps he meant above the FPL, but I’d be interested to know which. And the group may, in fact, be about 5.2M.

  2. Lesley says:

    This is exactly why coupon sites such as http://www.medicationcoupons.com are so important these days. I would NEVER buy a medication if it was not covered by insurance, I did not have a coupon for it, or I couldn’t get it for $4. And I would not consider myself “below” FPL but still could never afford so many of the medications I am meant to be on.

  3. Andrew says:

    Bob,

    The reason Mr. Galewitz talks about people below the FPL is that, while the Medicaid expansion will cover all adults up to 138% of FPL, only those whose income is 100%-400% of FPL are eligible for advance premium tax credits and cost-sharing reductions.

    In states that have not chosen to expand Medicaid, those who might otherwise have been eligible (i.e. those whose income is below 138% FPL) can still get those other insurance subsidies through their Marketplace, so long as their income is at least 100% FPL.

    Those below 100% FPL are not eligible for any of those subsidies, and in states that do not expand Medicaid, will not be eligible for anything.

  4. Bob Foster says:

    Thanks Andrew for your input. I thought the traditional Medicaid coverage went up to 100% of FPL. Does it stop short of that in some states? If so, how much short and in how many states?

  5. Michelle says:

    The author is actually correct in saying those BELOW the FPL are those who will fall in the coverage gap. Depending on what state you’re in, the income qualifications (without Medicaid expansion) for Medicaid for adults may be far below 100% FPL. In Texas, where I live, if you are not pregnant, disabled or a child you are essentially ineligible for Medicaid (parents can qualify, but income must be below 15% FPL). So the coverage gap is for those adults who fall below 100% FPL. If their income is above 100%, they are eligible for a subsidy to purchase insurance in the Health Insurance Marketplace. But if they are under 100% FPL, without Medicaid expansion, they don’t qualify for anything. This table from CMS contains 2014 income eligibility information by state: http://www.medicaid.gov/AffordableCareAct/Medicaid-Moving-Forward-2014/Downloads/Medicaid-and-CHIP-Eligibility-Levels-Table.pdf

    Hope that helps!

  6. Alan says:

    I would appreciate a clarification. I am a physician with 3 children. Two have jobs that cover their medical insurance. The third is 30 years old, too old to be covered under my policy. He is a musician and barely earns a living. He has no steady employer but to qualify for the ACA in NY, you have to show proof of employment of $16,000 a year. He has no such proof and yet Medicaid, which I don’t care for has a cutoff of between 9-10,000 a year-proven. Is he in this wonderful gap as NY has decided to discontinue Healthy NY as of Dec 30?
    Any ideas of how to proceed. The ACA defeats what it was intended to do and physicians are opting out of both ACA and possibly even Medicare because rules set down by bureaucrats for treatment or even academicians are far from reality.

  7. Mary says:

    We are in that gap and very angry about it. And we currently HAVE health insurance. It is not a great plan, but we are self-employed and PAY for it monthly. It is far more reasonable and has better coverage than anything being offered. Our plan will disappear with ACA. We had a terrible year last year and it is reflected on our tax return. I have 4 years to go before medicare. I could continue to pay for myself and two sons in their 20′s if we could continue as is. That, of course, is not possible. One son has a condition. Our state did not expand medicaid and we don’t even want it. We would just like to be able to participate in subsidies and buy a plan comparable to what we have now. Our income is too low and there is no such plan. To put it bluntly, we are screwed!

  8. Jennifer Hu says:

    Oh quit your whining and talk to you legislators. The have all your answers. If business is so bad perhaps you shouldn’t be running one. Get a real job.

  9. Eva says:

    Mary: Why will your plan disappear with the ACA? If it is an individual plan that you buy directly from an insurance company, what is causing it to go away when ACA starts?

    Or are you currently buying through a government-sponsored plan that is being replaced by ACA?

    That’s what’s happening in my state. I currently buy my health insurance through Oregon’s high-risk pool (OMIP), which will end when the ACA program begins in January. I haven’t signed up for ACA yet, but I’ve looked at the rates, and it looks like I’ll be paying the same through ACA that I was paying through OMIP.

  10. Eva says:

    And Alan: You say, “…to qualify for the ACA in NY, you have to show proof of employment of $16,000 a year.” My understanding is that the $16k requirement is for the *subsidy*, not for the ACA. It sounds like the gap your son is in is that he makes too much money for Medicaid, but not enough to get the federal tax credit for his health insurance premiums.

    What does your son do for health insurance currently? Is he eligible for any of the NY state programs? I looked on the NY web site, and there is a huge amount of (not particularly clear) information about maintaining benefits in the conversion to the ACA. I’m sure the process will be fraught with red tape, but inasmuch as NY is one of the states that does support the principle of the ACA, I suspect it has a program to fill the gap your son is in.

    And if there weren’t, wouldn’t you consider helping your son pay his health insurance premiums? As a physician in New York, you must have a comfortable income, and surely paying his insurance is the best way to avoid the risk of having to pay hundreds of thousands of dollars for the care he would need if he had a serious accident or illness.

    If you wanted to game the system, on the other hand, you could put your son to work in your office, pay him enough to raise his income to $16k, and deduct the money you pay him as a business expense.

  11. Elise says:

    Mary: Why will your plan disappear with the ACA? If it is an individual plan that you buy directly from an insurance company, what is causing it to go away when ACA starts?

    I buy insurance, as an individual, from BC/BS in NJ. BC/BS is discontinuing my plan as a result of the ACA. As I understand it, it’s not that the ACA prohibits insurers from offering certain plans to individuals; it’s that many individual plans currently offered do not qualify as acceptable coverage under the ACA. This means that if BC/BS continued to offer my current plan and I continued to buy it, the Federal government would not find my plan good enough and I would still have to pay the fine/tax for being “uninsured”.

    BTW, my current plan is excellent. From what I can figure out (which isn’t much), it fails to meet ACA standards because it requires me to pay for preventive care (e.g., $30 for a visit to my PCP).

  12. Don Lafferty says:

    Jennifer Hu seems to be one of those “caring Liberals” we hear so much about. Yikes!

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