Wednesday, May 13, 2020

Getting insured after job loss: Just how complicated?

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About 27 million of the newly unemployed and their family members have likely lost health insurance, according to a new Kaiser Family Foundation estimate.

The ACA offers a leaky but not entirely unseaworthy lifeboat. According to Kaiser estimates, 79% of the newly uninsured are at present likely eligible for ACA-subsidized coverage -- 12.7 million for Medicaid and CHIP and 8.4 million for subsidized private plans in the ACA marketplace.

The basic buckets that those seeking insurance should find themselves sorted into shouldn't in principle be that complicated. Here's the breakdown:
  • Medicaid: monthly income up to 138% FPL ($1468 for an individual, $3013 for a family of four) -- except in the 15 states (soon to be 14) that have refused to implement the ACA medicaid expansion. There, thresholds vary and are usually much lower.
  • Marketplace: Subsidized at annual incomes of 138-400% FPL in expansion states ($49,960/individual, $103,000/family of four) and 100-400% FPL in nonexpansion states. 
  • COBRA or (for younger adults) unsubsidized marketplace coverage for those with incomes over 400% FPL.
Many who are eligible for aid won't find their way to coverage. The worst enemy is ignorance, exacerbated by the Trump administration's gutting of federal funding for advertising and enrollment assistance in the 38 states that use the federal exchange,  Historically, too, many who do view a menu of the subsidized marketplace offerings available at their income have found the coverage too expensive, particularly if their income is over 200% FPL, the threshold for strong Cost Sharing Reduction (CSR) subsidies. 

Complexities in the application process, some new to the Covid-19 crisis, may also trip people up:
  • Medicaid eligibility is determined on the basis of current monthly income; marketplace subsidy eligibility and subsidy size are determined on the basis of estimate annual income. 
  • The $600/week extra unemployment benefit made available through July 31 by the CARES Act does not count toward Medicaid eligibility but does count toward marketplace subsidy calculation; it will weaken marketplace coverage and takeup
  • Annual income estimates may be quite complex, potentially comprising a) pre-layoff job income; b) enhanced unemployment income; and c) un-enhanced unemployment or renewed employment income.
  • Choice among marketplace plans can be complex, although the choice is often simplified de facto by cost.
  • State Medicaid offices, like state unemployment offices, may be overwhelmed and backlogged; that will vary by state. 
  • Undocumented immigrants get nothing in our cruel system. Applications for those in "mixed households," where some have legal status, are all the more complex. Trump's vicious expansion of the public charge rule deters legally present immigrants from seeking services to which they're entitled
At the American Prospect, Jon Walker offers a decision tree that lampoons the system's complexity:

Every factor in this chart is real, and it's valuable as a reductio (or expansionem!) ad absurdum. But in most cases, the decision isn't that complex. Consider:
  • Where possible, getting picked up by your spouse's employer-sponsored insurance is almost surely a no-brainer.
  • You'd have to be highly politically conscious, and extremely risk tolerant, to factor in the possibility of the federal government picking up your COBRA costs (though 100% COBRA subsidy is in the current House wish-list legislation). 
  • Factoring in money already spent toward the deductible and out-of-pocket maximum in an employer plan could be important for some, but not most. Average annual  out-of-pocket spending in employer plans was $907 in 2018, according to the Health Care Cost Institute. Most people who qualify for substantial marketplace subsidies will choose the marketplace over COBRA -- though the narrow networks prevalent in marketplace plans will indeed make the choice fraught for some.*
  • For half the uninsured, both the winnowing and enrollment process should be relatively simple: monthly income will qualify them for Medicaid.
On the plus side, too, (and some of the state-based exchanges) have developed some pretty decent decision support tools since the 2014 ACA launch. In particular, if you choose "find out if you're eligible for Medicaid" from 3 options after clicking "see if I can enroll" on the home page, after entering your zip code you come to an admirably simple screening tool:

The separate "see plans and prices" screening tool for the marketplace is also simple and fast - answer a handful of questions and you'll see what you'll pay for the plans available in your zip code (if  you enter an accurate income estimate).  This screener can also indicate Medicaid eligibility -- but it does so on the basis of an annual income estimate, which means you may miss your Medicaid eligibility. And therein lies a key remaining weakness -- in the potential disjunct between estimated annual and current monthly income.

It seems to me there's a simple solution. Use just one screener, and prompt for current monthly income first. If that apparently qualifies the user for Medicaid, stop there, and prompt the user to begin an application. If the monthly income estimate is  above the Medicaid threshold, show a figure that multiplies the monthly estimate by 12 and ask if that's an accurate estimate of annual income (the actual application does this). If the answer is no, ask for an annual income estimate, and continue the process from there.

None of this is to excuse the system's weaknesses: the complexity of the application process, the inadequacy of marketplace subsidies, the oversensitivity to small changes in income, the uncertainty of forward-looking income estimates. Nor should Congress be excused for failing in the crisis to vastly increase help available and simplify application by one means or another. But the ACA programs are in place, and good enough to provide substantial coverage to tens of millions. We should do everything in our power to get people enrolled if Congress continues to fail to improve what's on offer.

* One further complication re out-of-pocket costs: while marketplace plans generally have higher deductibles and out-of-pocket maximums for enrollees with income over 200% FPL, some states have required insurers to provide Covid-19 treatment as well as testing without cost-sharing. State laws do not apply to self-funded employer plans, which cover the majority of people covered by employers, but they do apply to marketplace plans.  

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