CARES Act may reduce ACA "coverage gap" in states that refused Medicaid expansion

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The enhanced unemployment benefits provided by the CARES Act, the emergency COVID-19 relief bill signed into law on March 27, count as income for those seeking subsidized health insurance in the ACA marketplace (the income does not count in consideration of Medicaid/CHIP eligibility).

As I noted last week, that's going to vastly reduce premium subsidies and likely wipe out Cost Sharing Reduction subsidies for many newly unemployed people who seek coverage.  On the plus side, however, the rush of temporary income should also narrow the "coverage gap" in states that have refused to enact the ACA Medicaid expansion, including Florida and Texas.

Enhanced unemployment benefit will skew ACA marketplace/Medicaid enrollment

The enhanced unemployment benefits provided in the CARES Act, the massive COVID-19 response bill that passed the Senate 96-0 last night, looks likely to create some strange incentives for the newly uninsured seeking health insurance.

For anyone who qualifies for unemployment insurance, the bill adds an extra $600 week to the normal benefit for four months. That's more than $10,000 for anyone who stays unemployed for that long (as millions likely will: a staggering 3.3 million new jobless claims were entered this week).  For the first time, UI benefits are available to the "self-employed, independent contractors, those with limited work history, and others who are unable to work as a direct result of the coronavirus public health emergency."

As noted last night by the Brookings Institute's Loren Adler, the extra $600 per week will not be counted for the purposes of determining eligibility for Medicaid and CHIP, but will be counted for determining subsidy eligibility for private plans in the ACA marketplace. If that holds, some fairly high earners will likely end up eligible for Medicaid but not for subsidized marketplace coverage.  That's all the more likely because while Medicaid eligibility is determined on a monthly basis, marketplace subsidies are determined on the basis of annual income -- so income earned up to the time of layoff counts along with the enhanced UI benefit.*

Others may be eligible both for Medicaid and for weak marketplace subsidies. In that case, Medicaid should be the clear choice for most. Let's look at the math.

Unemployed alert: When NOT to seek health insurance through the ACA marketplace

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The expected economic fallout from the coronavirus pandemic is shocking. Morgan Stanley forecasts that the unemployment rate will approach 13% next quarter. We're talking Depression.

That onrush will put enormous strain on the enrollment infrastructure established by the ACA for the private plan marketplace and Medicaid, at a time when our healthcare infrastructure will also be under tremendous strain and flux. Thank God the core ACA programs, Medicaid expansion and the subsidized marketplace, are intact and funded. But the enrollment machinery is balky.

I am particularly concerned about one complication that could flummox a lot of newly uninsured people: the mismatch between marketplace and Medicaid income assessments. While subsidy eligibility and subsidy size in the marketplace is determined on the basis of annual income, Medicaid eligibility is determined on the basis of monthly income.  While the HealthCare.gov application prompts applicants to report both estimated annual and current monthly income, and should find Medicaid eligibility on the basis of monthly income if it's below the threshold, several experienced enrollment assisters have told me that in this circumstance they prefer to apply directly through a state Medicaid office or website.*


It also suggests that some people may actually have a choice of marketplace or Medicaid, since a newly unemployed person, or a self-employed person whose income drops abruptly, has to estimate income for the year. Let's say you're a single adult whose job pays $4,000 per month,and you're laid off at the beginning of April, when you've earned $12,000 to date. Estimate your income for the full year at $17,000, and you're on Medicaid. Estimate it at $18,000, and you're in the marketplace, and eligible for the highest level of Cost Sharing Reduction, which will put your deductible in the $0-500 range. A benchmark silver plan will cost you $56 per month at that income.  At a $20,000 annual income, the benchmark premium will go to $77/month and the deductible (under the second strongest CSR level level) will probably be in the $500-1000 range.

Because the ACA Medicaid expansion established no asset test for Medicaid eligibility -- anyone in a household with income under 138% of the Federal Poverty Level qualifies -- high earners could become Medicaid-eligible even if their year-to-date income at the time of unemployment exceeds the threshold for subsidy eligibility in the marketplace (400% FPL, or $49,960 for an individual, $103,000 for a family of four). That assumes no unemployment insurance income, or a level below Medicaid eligibility.  High self-employed earners may find themselves in this category if their sources of income dissolve. [Update, 4/26: The CARES Act renders the self-employed and others not ordinarily eligible for unemployment benefits eligible -- and adds a $600/wk extra UI benefit for up to four months. See note at bottom.]

The experience of people I've helped apply for Medicaid suggests that enrollment is often slow and balky. State Medicaid offices and enrollment websites will likely be flooded with new applicants. A lot will depend on the prevailing attitude in a given state government. In a disaster, states can seek Medicaid waivers to streamline eligibility determinations -- essentially to enroll anyone who declares an income that renders them eligible, and suspending eligibility redeterminations for the duration of the crisis.* In recent years states have gone the other way, stepping up their technological ability to detect income increases that disqualify people from Medicaid.

So the question now for state governments is what do you want to do? Minimize your uninsured population during a pandemic, or minimize state expenditure on Medicaid?

In a pandemic, you want low income people on Medicaid.** No premium, no cost sharing, no balance billing, no muss no fuss once you've located providers who accept the insurance. In fact we should always want low income people on Medicaid -- say, to 200% FPL. But that's a tale for a different day, unless the pandemic changes our legislative dynamics beyond recognition.

Related: Uninsured in a pandemic? Seek help -- it's likely available
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*  Update, 4/26: I had originally written that HealthCare.gov might not recognize Medicaid eligibility based on current monthly income if the actual or estimated annual income exceeded the annual eligibility threshold. That was an error -- though several experienced navigators told me that they prefer applying directly through state Medicaid departments in this circumstance.

One further complication: The CARES Act, the Covid-19 relief bill signed into law on March 27, provides a $600/week boost to ordinary unemployment income for up to four months, which comes to a maximum of $10,200. This income counts in the determination of marketplace subsidy eligibility but does not count toward Medicaid eligibility. While CMS has promised to enable HealthCare.gov to recognize the extra $600/week unemployment benefit as income for marketplace purposes while discounting it when determining Medicaid eligibility, that capability is not yet in place.

** On March 22, the president declared a national emergency under the Stafford Act. That clears the way for states to seek Section 1135 Medicaid waivers, which enables these measures, among others:

- Temporarily suspend prior authorization requirements;

- Extend existing authorizations for services through the end of the public health emergency;

- Modify certain timeline requirements for state fair hearings and appeals;

- Relax provider enrollment requirements to allow states to more quickly enroll out-of-state or other new providers to expand access to care, and

- Relax public notice and submission deadlines for certain COVID-19 focused Medicaid state plan amendments, enabling states to make changes faster and ensure they can be retroactive to the beginning of the emergency. 

 CMS has encouraged Section 1135 waivers, and in fact published blanket waivers available for the asking; 13 states have had such waivers approved.  But a different kind of waiver -- a Section 1115 waiver -- is required to ease eligibility procedures. Under a Section 1115 waiver, New York after 9/11 offered four months of Medicaid coverage to eligible New York City residents through a simplified application. After Hurricane Katrina, via a Section 1115 waiver, evacuees unable to provide documentation were allowed to self-attest to Medicaid eligibility criteria.

The ACA marketplace in year 7: The navigators' view

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The Affordable Care Act's health insurance marketplace, born on January 1, 2014, isn't a baby any more. In fact you might say it's reached maturity.

Like many children, it's disappointed its parents somewhat, insuring about half as many people as the Congressional Budget Office forecast when the ACA was passed. It's withstood multiple legislative and administrative assaults from Republicans and survived a half dozen near-death experiences via  repeal bills and court challenges to its constitutionality, one of which still looms. The marketplace's lower-profile twin, the ACA Medicaid expansion, has been more successful -- insuring more people more thoroughly for less money.

But the individual market for health insurance reshaped by the ACA is beginning its seventh year of offering comprehensive health insurance to anyone who lacks access to other insurance without regard to their medical history or current health. The ACA-compliant market serves about 13 million people, about three quarters of them subsidized, with the federal government paying about 86% of subsidized enrollees' monthly premium on average.

As the nation is faced with a major pandemic-induced recession, the marketplace and ACA Medicaid expansion stand poised to insure millions who lose employer-based insurance.

Call the midwife

There is a set of marketplace midwives who were in at the birth and have continued their intimate engagement: enrollment assisters, including nonprofit navigators established by the ACA; nonprofit and often volunteer Certified Application Counselors (CACs); and for-profit brokers who work in the individual market.

Emergency Special Enrollment Periods in 12 state ACA marketplaces: How easy?

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Update, 4/7/20: Early emergency SEP data collected by Charles Gaba indicates that states that require a phone call to begin the SEP application are seeing slower enrollment than states where an emergency SEP application can be completed online.

Twelve of the thirteen states (including D.C.) that run their own ACA marketplaces have announced emergency Special Enrollment Periods to help the uninsured get covered while the Coronavirus rages. Washington state was first to announce a SEP,  on March 10. CMS is "evaluating" following suit for the 38 states using the federal platform, HealthCare.gov. Idaho is the only holdout (and only red state) among the SBEs.

Kudos to the states that have taken the plunge. May it go smoothly operationally. Some began with some messaging confusion, e.g., info about the emergency SEP that seemed contradicted by older messaging about conventional SEPs, granted only to individuals for life changes such as job loss instead of to anyone seeking insurance. Most of those have been straightened out, but some mixed messaging lingers.  Below, a sampling of clear and not-so-clear home page messaging.

The ACA as recession insurance, revisited

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Almost a year ago, I noted that the ACA marketplace has never operated in a shrinking employment market -- job growth has been steady since the marketplace launched in January 2014.  That's created a (fortunate) headwind for enrollment, and

Conversely, the marketplace -- along with the ACA Medicaid expansion -- stands in reserve as a shock absorber when the next recession or financial crisis hits.

That's now. Goldman Sachs projects that after a 30% spike in jobless claims last week, to 281,000, new claims will hit 2.25 million this week -- an unprecedented surge. Mnuchin, Trump's Treasury Secretary, warned Republican senators this week that unemployment could go to 20%, a level not seen since the Great Depression. In the Great Recession of 2008-9, 9 million people lost their jobs; losses this time around could far exceed that total.

Millions of people are going to lose access to employer-sponsored insurance. The ACA machinery to get them insured is knobbly, but functional and funded. I have a post at healthinsurance.org to help the newly uninsured navigate their options. The basics:

The ACA wars through a pandemic lens: Nicholas Bagley looks back

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I spoke to Nicholas Bagley, health law professor at the University of Michigan, about measures to limit Americans' out-of-pocket exposure for coronavirus treatment -- assuming that in the U.S., simply covering all OOP for everyone treated for the disease at government-set payment rates to providers is not going to happen.

My thought was that Bagley could speak to avoiding legal pitfalls in any such measures. But his sense is that in the current crisis, legal concerns pertain mainly to potential administrative actions  (for example,  Can the CDC Pay for Everyone's Coronavirus Testing?).

Given normal U.S. legislative sclerosis, seeking regulatory authority to do what needs to be done is often fertile ground for legal analysis. Right now, though, the cards may line up for decisive legislative action, as they do in this country when (and only when) Republican political survival depends on it. And while there are multiple constraints to regulatory action, "there are fairly few constraints on Congress's legislative power," Bagley said. "Congress doesn't quite have carte blanche, but close to it. The question is not what does the Constitution allow Congress to do. We should be asking, 'what do we think ought to happen?' And then we should do it."

Limit Americans' out-of-pocket exposure for Coronavirus treatment

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The bill passed by the House yesterday to ease the economic impact of the coronavirus pandemic, H.R. 6201, purports to make coronavirus testing available at no cost to all Americans. That includes office visits, urgent care center visits, and emergency room visits that lead to an order for testing.* It does not, however, include treatment for those who become seriously ill.

David Anderson and Nicholas Bagley are calling for Congress to rise to the crisis by protecting Americans against balance billing -- either by passing comprehensive consumer protection that's been stalled since last fall or, at a minimum, passing a bill to limit out-of-network billing for Coronavirus treatment.

That's vital. I've worried since late February that fear of balance billing would inhibit some Americans from seeking treatment. I've also noted a closely related problem: Americans' huge exposure to out-of-pocket costs for in-network care:

How about a national reporter hotline for Coronavirus balance billing?

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It's been a running joke on healthcare Twitter for some time that Americans' best defense against egregious surprise billing and relentless hospital debt collection is to call a reporter.

With Sarah Kliff (now at the NYT) crowd-sourcing outrageous emergency room bills at Vox and Kaiser Health News maintaining a Bill of the Month series, there's been saturation coverage of these practices that render health insurance effectively illusory for tens for millions of Americans.

With almost comic frequency, ERs caught out billing patients thousands for minimal work and hospital systems exposed for suing thousands of low income patients have forgiven bills or announced that they are changing their dunning practices after being exposed in the national press. For example....

Zuckerberg San Francisco General rolls back a $20,000 ER bill sent to an insured patient after a bicycle accident -- then reviews its practice of balance-billing every privately insured patient brought to its doors. A behemoth dialysis provider cancels a half-million dollar bill. A week after KHN's Jay Hancock reports that University of Virginia has sued 36,000 patients, garnished thousands of paychecks and put liens on homes, the hospital admits it was too aggressive and revamps its financial aid guidelines. Just today we learn that another predatory debt collector in Virginia, VCU Health, will stop garnishing wages and putting liens on people's houses.

Coronavirus alert: How about an emergency Special Enrollment Period for the ACA marketplace?

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Update, 3/12: As noted in the updates at bottom, as of now five state-based marketplaces are running Special Enrollment Periods open to all, two of them triggered by the coronavirus emergency. CMS should do it for the healthcare.gov states. 3/14: Rhode Island makes six. 3/16: New York comes on board. 3/17: Nevada is in. 3/18: Connecticut announces SEP. And Colorado will announce imminently. 3/20: Covered California, already open via a tax-season SEP, available to anyone who affirms they were not aware of the state's new individual mandate, today makes it unconditional with an emergency SEP open to all. And it's open through June 30, by far the longest emergency SEP. 3/20 II: MNSure announces a SEP running March 23 - April 1. 3/20 III: Vermont comes on board, sort of.

Every SBE except Idaho now has enrollment open to the uninsured.

If the coronavirus causes major economic disruption, as now seems likely, the ACA marketplace (including Medicaid enrollment) is likely to get a major stress test.

As I've noted previously, the marketplace has never experienced a recession; the unemployment rate has dropped steadily since it launched in 2014, and enrollment has been basically flat since 2016. It stands ready as a shock absorber when people are laid off.  Those who lose insurance through their jobs are eligible for a Special Enrollment Period.  The machinery for processing SEP requests had better be smooth.

Since subsidy eligibility depends on annual income, the earlier in the year layoffs begin, the more people will qualify for marketplace subsidies (annual income up to $49,960 for an individual) or Medicaid ($17,236). In Medicaid expansion states, even those who have crossed those earnings thresholds should be eligible for Medicaid one month forward if their income is below the monthly Medicaid threshold.* Under various emergency authorities, governors and the president can extend Medicaid eligibility and expedite enrollment, as was done in the wake of 9/11, Hurricane Katrina, and the Flint water crisis.

The marketplace also might be put to more immediate use.  CMS should declare a national Special Enrollment Period for the marketplace (Medicaid enrollment is year-round).

Employer-sponsored insurance is deteriorating. What about fixing it rather than replacing it?

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Medicare for All's main political liability, as the presidential campaign has made clear, is loss aversion: most Americans are insured,  most are reasonably satisfied with their coverage, and a significant minority consider their top-drawer coverage a major asset. Americans also have ample cause to doubt their government's capacity to completely remake the country's healthcare system and serve as the sole source of major medical insurance to everybody.

At the same time, Medicare for All speaks to a current reality: employer-sponsored insurance (ESI), which covers the majority of Americans under age 65, is deteriorating, and Americans know it.  Kaiser Family Foundation tracking poll results released last week neatly capture the core household worries related to healthcare:

About two-thirds of Americans say they are either “very worried” (35%) or “somewhat worried” (30%) about being able to afford unexpected medical bills. This is larger than the share that say they are worried about affording a variety of expenses, including other types of health care costs as well as other household expenses. About half of insured adults say they worry about being able to afford their health insurance deductible (49%) and four in ten (40%) worry about being able to afford their premiums. More than four in ten adults overall worry about affording prescription drug costs (45%).

The ACA at 10: The navigators' tale (preview)

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As the tenth anniversary of the ACA's passage approaches, Health Affairs is out with a landmark series of articles examining the law's history and impact.

To mark the occasion myself, I have interviewed five "navigators" -- nonprofit enrollment assisters chartered by the ACA -- who were in at the birth of the marketplace and have been helping people enroll since fall 2013.

These veterans have assisted thousands of mostly low income people in need of affordable health insurance and have been integral to the enrollment assistance infrastructure of their states -- Florida, South Carolina, West Virginia and Texas, which together account for 28% of all marketplace enrollment. All of these states use the federal HealthCare.gov platform and so have been subject to the Trump administration's 84% cut to navigation funding.

I have completed my writeup of the debriefing of these resilient, tough, devoted professionals and am currently shopping the article draft, which may yet end up here on xpostfactoid. It's a slow process. To ease my impatience, I'm here offering a snippet view of key points.

The ACA at 10: Resilient, yes, but...

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To mark the ACA's tenth anniversary, Sabrina Corlette, Linda Blumberg and Kevin Lucia - three of the nation's leading scholars and architects of healthcare policy -- have written a detailed and entertaining account of the tumultuous history of the ACA marketplace and its impact to date.

Strap in and relive the rough ride through grandmothered pre-ACA plans, the risk corridor massacre, the market correction of 2017, the repeal drive of 2018, the individual mandate repeal and promotion of the medically underwritten short-term market...and relative enrollment stability through it all.

The authors' conclusions are fair but, perhaps necessarily, oversimplify a bit. Let's take the catalog of successes one at a time.