Tuesday, March 31, 2015

1.9 million private plan enrollees on Healthcare.gov would have been eligible for Medicaid if their states had accepted the expansion

In a post on healthinsurance.org, I report that almost 2 million of the private plan enrollees on Healthcare.gov would have qualified for Medicaid if their states had embraced the ACA Medicaid expansion.

That is, about a third of the six million-plus private plan enrollees in non-expansion states and about 22% of all ACA private plan signups would have been in Medicaid if the Supreme Court had not made the expansion optional or if every state had embraced it voluntarily. In that case, there would probably be fewer than 10 million signups in the "Qualified Health Plans" (QHPs) offered on the exchanges today.

In their furious rejection of everything associated with the ACA, and cruel denial of insurance to millions of their constituents, red state governors and legislatures gave the QHP markets in their states a vital boost.

In the healthinsurance.org post, I explore the weakness in exchange offerings that these statistics imply. In brief, because exchange offerings are so much cheaper and offer such dramatically better coverage at the lower end of the subsidy-eligible income range, takeup is dramatically better among the lowest-income eligible uninsured than among the uninsured in higher subsidy-eligible income bands, as Avalere recently concluded.

Here I just want to add some support to my calculation that about 1.9 QHP enrollees in non-expansion states had incomes in the 100-138% FPL range, which would have put them in the Medicaid pool in expansion states.

In the QHP enrollment report released earlier this month, HHS broke out enrollees by income for the very first time. But the income band that's relevant to this post is a frustratingly broad 100-150% FPL. In the states that expanded Medicaid, that band effectively equates to 138%-150% FPL, because 138% is the point at which Medicaid eligibility ends and subsidized QHP eligibility begins (with one low-volume exception*). In states that refused the expansion, QHP eligibility begins at 100% FPL

More than 70% of all QHP signups, or 5.97 million for whom income data was available**, were in nonexpansion states. Of those, 47%, or 2.8 million, were in the 100-150% FPL income band. My problem was to figure out what portion of those 2.8 million had incomes from 100-138% FPL, which would have qualified them for Medicaid if their states had accepted the expansion.

The main clue is HHS's comparison of income distribution in the expansion vs. nonexpansion states. In the nonexpansion states, 22% were in the 100-150% FPL band -- which in those states effectively meant 138-150% FPL. My calculation is based on the assumption that if the non-expansion states had embraced the expansion, they too would have had 22% of signups in this income band -- 22%, that is, of a much smaller overall pool. To get that number, I took the total number of signups in all other income bands in the non-expansion states and asked what number in the 100-150% would have been 22% of a total excluding the Medicaid-eligibles (that is, the Medicaid should-have-been-eligibles). The answer is about 895 million. Subtract that from 2.8 million and you have about 1.9 million who should have been Medicaid-eligible.

The questionable assumption here is that people in the 138-150% FPL range enrolled in QHPs at about the same rate in non-expansion states as in expansion states. To test that, my son Benjamin provided some support. Taking the problem from the other end, he added enough 100-150% FPL enrollees to the total in the expansion states to make signups in that income band 47% of the whole, matching the percentage in nonexpansion states. He then compared the percentages of enrollees in each income bracket. Here's what he came up with:

The proportions are close enough to infer that the 895,000 estimate for signups 138-150% FPL and 1.9 million 100-138% FPL in the nonexpansion states is close to target.

Of course, HHS/CMS could settle the question by providing a tally in the 138-150% FPL range. I've... asked them.

* The "exception is legally present immigrants who have not been in the country long enough to qualify for Medicaid. In most states, legally present immigrants are not eligible for Medicaid until they have lived in the U.S. for 5 years; some states have even higher eligibility bars, such as 40 quarters of gainful employment. The ACA allows legally present immigrants barred from Medicaid to buy subsidized private plans on the exchanges, regardless of their income level. Hence about 3% of buyers on healthcare.gov have incomes under 100% FPL, and a small percentage of buyers between 100 and 138% FPL in expansion states may be legally present immigrants as well.  Immigrants of course may also make up  small numbers of buyers at every income level -- but in expansion states, immigrants would be the only subsidized QHP buyers in the 100-138% FPL range.

**HHS total enrollment figures include 530 million for whom income data is not available. On the advice of Larry Levitt of the Kaiser Family Foundation, I assume that the vast majority of those earned too much to qualify for subsidies and so did not report income. I take income band percentages from the totals of plan selections with available data on household income -- 5.97 million in nonexpansion states and 2.35 million in expansion states.

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