In nonexpansion states, what percentage of near-poor adults (100-138% FPL) enroll in marketplace coverage?

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Update, 5/4/21: New data via the CMS state-level public use files for 2021 shows that enrollment at 100-138% FPL in nonexpansion states increased dramatically in 2021. See this post for an update.

In a brief estimating how many people remain in the "coverage gap" -- uninsured poor adults in states that have refused to enact the ACA Medicaid expansion -- the Kaiser Family Foundation also sheds a sidelight on a question I've been pondering.

It's this: In nonexpansion states, what percentage of those in the 100-138% FPL income bracket, who would be eligible for Medicaid had their states enacted the expansion, enroll in the marketplace coverage that's available on relatively favorable terms?

In expansion states, eligibility for marketplace subsidies begins at 138% FPL; people below that income level are eligible for Medicaid. In nonexpansion states, marketplace subsidy eligibility begins at 100% FPL. People with incomes in the 100-138% FPL income range, who "should" be in Medicaid, can purchase a benchmark silver plan with strong Cost Sharing Reduction for 2% of income, or a maximum of $29 per month at the high end. The actuarial value of silver at that income level is 94%; the average deductible is around $200, and the average annual out-of-pocket maximum is about $1100.

In addition to estimating the number of people in the coverage gap, who are eligible for no aid at all under the ACA, KFF, parsing 2019 American Community Survey data, estimates the number of uninsured people at 100-138% FPL in each state that has refused to enact the expansion.  That number can be set against the number of enrollees in the 100-138% FPL bracket in each state as of the end of Open Enrollment for 2020 (CMS has not yet broken out enrollment by income for 2021). 

There's one catch: CMS breaks out income at 100-150% FPL, not 100-138% FPL. In 2016, however, in a one-time analysis, CMS did provide enrollment figures at 100-138% FPL, and Charles Gaba charted the percentage of enrollees in the larger bracket (100-150% FPL) who were also in the narrower should-have-been-in-Medicaid bracket (100-138% FPL). Those percentages are unlikely to have changed much. Putting it all together, then, here are the results

   Takeup of ACA marketplace coverage at 100-138% FPL in nonexpansion states

Sources: CMS State-level Public Use Files, 2020 (enrollment); KFF (uninsured estimate); Charles Gaba (enrollment at 138% FPL).*

Two facts stand out here. First, takeup of marketplace coverage among the near-poor in nonexpansion states is depressingly low -- much lower than takeup of Medicaid in the 100-138% FPL income range in states that have enacted the expansion. Second, Florida, the state with the highest marketplace enrollment in the country, is in a category by itself, with an estimated 72% of potentially eligible residents at 100-138% FPL enrolling in coverage.  In Florida, both commercial and nonprofit channels of outreach and enrollment assistance are highly developed -- perhaps uniquely so, and almost certainly without peer in nonexpansion states. Take Florida out of the equation, and takeup drops to 43.3% for the remaining states.

The overall estimated takeup rate at this income level -- 53% -- is apparently in line with takeup at all subsidy-eligible income levels: I recently came up with 52% takeup in the whole subsidy-eligible population on the basis of updated KFF estimates of the subsidy-eligible uninsured.  In a March 2021 analysis of survey and enrollment data, Matthew Fiedler of the Brookings Institute similarly found takeup nearly flat (and near 50%) across subsidy-eligible income brackets:

These estimates cut against an older perception that takeup is significantly higher at lower income levels, where CSR is strong and the percentage of income required for a benchmark silver plan is relatively low.  In 2015, Avalere Health reported a conclusion along those lines:

as of the close of the 2015 open enrollment period, exchanges using HealthCare.gov had enrolled 76 percent of eligible individuals with incomes between 100 and 150 percent of the federal poverty level (FPL) or $11,770 to $17,655. However, participation rates declined dramatically as incomes increase and subsidies decrease. For instance, only 16 percent of those earning 301 to 400 percent FPL picked coverage through an exchange, even though they may be eligible for premium subsidies.

Changes since 2015 in total marketplace enrollment (basically null) and income distribution cannot explain such a stark difference in conclusions. Survey-based data reflecting insurance status and household composition and income is fraught with uncertainties, as both KFF's technical appendices and Fiedler's analysis make amply clear. By this point, though, it seems clear that takeup of marketplace coverage at low incomes is far below takeup of Medicaid, which exceeds 90% across all categories if KFF's estimate that 7.2 million of the Medicaid-eligible are uninsured is accurate. Medicaid enrollment has almost certainly topped 80 million in the pandemic. About 8 million Medicaid enrollees are dually eligible for Medicare, leaving a nonelderly enrollment population in excess of 70 million (half of all enrollees are children).

The American Rescue Plan Act, signed on March 11, has made benchmark silver marketplace coverage free at incomes up to 150% FPL*, while also ramping up spending on outreach and enrollment assistance. Whether marketplace takeup under these new conditions approaches Medicaid levels at low incomes remains to be seen.

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A few notes on sources and estimates: Given the 5% marketplace enrollment increase in 2021, plus the extended emergency Special Enrollment Period launched on Feb. 15 this year and continuing through August, current effectuated enrollment is likely to be comparable to 2020 total plan selections as of the end of Open Enrollment. The 2021 increases probably roughly offset the yearly gap between plan selections recorded in the PUF as of the end of OE and enrollment actually effectuated as of February, a total not yet reported for 2021. As to the percentage of enrollees in the 100-150% FPL bracket who are also in the 100-138% FPL range, that is unlikely to have changed significantly since the one-time snapshot in 2016. Finally, KFF left Oklahoma and Missouri out of its analysis of the coverage gap, as both were presumed to be primed to enact the expansion in July 2021. The Missouri legislature recently balked at funding that referendum- and state constitution-mandated expansion, however.

* Corrected, 4/12, from 200% FPL. At 150-200% FPL, benchmark silver coverage now costs 0-2% of income.

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