Wednesday, September 26, 2018

A small refuge from the Trump administration's public charge cruelty

The Trump administration's proposed new rule jeopardizing the immigration status of legally present noncitiizens who tap non-cash benefits like Medicaid or food stamps is a travesty -- of public health, economics and human rights. If finalized, it will kill people by denying them medical care, harm the life prospects of millions of children, and put us one more long step down the road toward discriminatory treatment of a class of people demonized by the federal government. About 27 million people who are noncitizens themselves or live in a family including a noncitizen could be subject to the vastly expanded "public charge" rule.

There is one class of benefits left out of the demerit dragnet: ACA marketplace subsidies.  And ironically, a previous immigrant-bashing provision in federal law insulates a few hundred thousand immigrants from the proposed expansion of the public charge rule.

The provision in question is the so-called 5-year bar to Medicaid eligibility, imposing a five-year waiting period for most legally present noncitizens. It's a provision of the "welfare reform" bill, the so-called Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) that Bill Clinton signed into law in 1996. Some states have even more stringent waiting periods, such as 40 quarters (10 years) of employment history.

The ACA provides that adults with incomes up to 138% of the Federal Poverty Level (FPL) are eligible for Medicaid -- a provision that the Supreme Court rendered optional for states and that 34 have adopted so far (though the implementation year in Maine remains uncertain). While the ACA did not repeal the five-year bar, it provides that legally present noncitizens who are subject to it are eligible for marketplace subsidies, even if their incomes are below the eligibility threshold -- 138% FPL in expansion states, and 100% FPL in nonexpansion states.

For those with incomes below 138% FPL, the premium for a benchmark silver plan (second cheapest) is capped at 2% of income. If a cheaper silver plan is available in their area, it may be all but free. At this income level, Cost Sharing Reduction (CSR) raises the actuarial value of a silver plan to 94%, which generally translates to an average deductible of $255 as of 2017.  The highest allowed annual out-of-pocket maximum for a CSR-enhanced plan at this income level is $1,250. These are high out-of-pocket costs for low income people -- much higher than Medicaid's -- but much lower than what most people with commercial insurance are subject to.

In 2016, HHS reported that 3% of marketplace enrollees had incomes below 100% FPL. That was the last year that enrollment totals for this income category were broken out separately, but they probably haven't changed dramatically. Enrollment statistics produced annually by Covered California, the golden state's ACA marketplace, suggest that about two thirds of enrollees below the Medicaid eligibility threshold are subsidized -- i.e., that they are legally present noncitizens subject to the 5-year bar.

It therefore seems a reasonable inference that about 2%, of marketplace enrollees --roughly 200,000 as of now -- are legally present noncitizens with incomes below the Federal Poverty Level paying no more than 2% of income for CSR silver. Another group of unknown size (unknown to me, anyway) would be those with incomes in the 100-138% FPL range in expansion states, for whom the premium for benchmark silver (at 94% AV) is likewise capped at 2% of income. Elderly immigrants who don't qualify for Medicare (which requires 10 years of work history) comprise some of this group (96,000 marketplace enrollees in 2018 were over age 65).  And an unknown number of legally present noncitizens are subsidized in the marketplace at higher income levels.

There is one more substantial group of noncitizens insulated from the proposed rule by the five-year bar (with respect to health insurance only). New York is one of just two states to act on an option created by the ACA, implementing a Basic Health Program (BHP) for residents with income up to 200% FPL who are ineligible for Medicaid. The BHP, called the Essential Plan in New York, is a program very like managed Medicaid. Enrollees with incomes in the 138-200% FPL range pay just $20 per month for a plan with very low copays (and a narrow network). Those with incomes below 138% FPL -- legally present noncitizens who would otherwise be in Medicaid -- pay no premium.
The program was a windfall for New York, which previously was enrolling noncitizens  subject to the federal five-year bar in Medicaid on its own dime (in response to a court order).  The state transferred 225,000 of these Medicaid enrollees into the BHP -- where the federal government pays 95% of the premium --  in April 2015. In 2018, 303,000 Essential Plan enrollees (41%)  are legally present noncitizens who would otherwise be eligible for Medicaid.

All told, probably somewhere shy of a million marketplace enrollees are legally present noncitizens subsidized in the marketplace. That's probably about 3% of those who could be harmed by the public charge rule, relatively insulated with respect to one benefit. Thank unintended consequences for small favors.

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