As I have noted repeatedly (1, 2, 3) the ACA's notorious coverage gap -- the unavailability of subsidized insurance for adults with incomes below 100% FPL in states that have refused to enact the ACA Medicaid expansion -- is exacerbated by ignorance.
Few low income applicants in the 11 remaining "gap" states* know that they must estimate a minimum income for the coming year to qualify for coverage. HealthCare.gov, the application venue for all applicants potentially subject to the gap, does not spell out in the application or in the plan preview tool that a minimum income is required. People who are told that they do not qualify for aid because their income is too low are rightly incredulous.
Since fall 2018, however (during Open Enrollment for 2019), HealthSherpa, a commercial online health insurance brokerage used by thousands of brokers, has spelled out that vital information.
Previewing options on HealthSherpa -- that is, the plans available, at premiums net of estimated subsidy at a given zip code, household size, age(s), and income -- takes less than a minute. Try it with a zip code in one of the remaining nonexpansion states -- say, Texas or Florida, which between them account for more than half of enrollment in nonexpansion states (and more than a quarter of enrollment nationwide). Punch in an income below 100% FPL for an individual -- say, $11,000. This notice comes up (my emphasis).
Specifying the threshold -- and raising the possibility that a detailed look at income may lift a person above it -- is crucial information. ACA subsidy calculations are based on an estimate of future income, and the application, as I have detailed elsewhere, allows for considerable wiggle room. Tell people what income they need to estimate to qualify for subsidies, and a substantial number will find that "by providing more detailed information you may find that you're eligible for financial help," as the HealthSherpa message so delicately puts it. Moreover, the premium subsidies, once granted, will not be clawed back if income ultimately proves to be below the threshold, and the exchanges will not demand verification of an income estimate simply because outside data sources indicate an income below 100% FPL.
HealthSherpa is not HealthCare.gov -- but it is, effectively, a huge part of it. As a Direct Enrollment (DE) platform, it taps directly into the software powering the federal exchange to fully process applications. During Open Enrollment for 2021, HealthSherpa processed a staggering 1.9 million enrollments -- just shy of a quarter of all on-exchange enrollment in HealthCare.gov states (most of them through brokers who use its interface). As its client base skews heavily toward low income, it probably accounts for a higher percentage of enrollment among those with incomes near the 100% FPL eligibility threshold.
ACA marketplace enrollment in nonexpansion states has surged during the pandemic. From August 2019 to August 2021, enrollment in the thirteen states that had coverage gaps through through June 2021* increased by 44%. As of the end of Open Enrollment for 2021, more than 51% of enrollees in nonexpansion states (including Nebraska, which launched a Medicaid expansion in October 2020) had incomes under 150% FPL, compared to 45% in 2018 (see chart below). That percentage likely increased somewhat further during the emergency Special Enrollment Period that ran from Feb. 15 -- Aug. 15 of this year, as the American Rescue Plan Act had rendered benchmark silver plans with strong Cost Sharing Reduction free to enrollees with incomes up to 150% FPL. In all HealthCare.gov states, including expansion states, 45% of enrollees during the SEP had incomes below 150% FPL. The percentage in nonexpansion states would be considerably higher.
Enrollment growth and enrollment at low incomes in "coverage gap" states, 2018-2021
Source: CMS state-level public use files
There are a lot of reasons for the marketplace enrollment surge at the lowest qualifying income levels, particularly in nonexpansion states, where eligibility begins at 100% FPL instead of the 138% FPL threshold that obtains in expansion states (in those states, Medicaid is available below that threshold). The pandemic itself was a motivator. The emergency supplemental unemployment income provided by the CARES Act in late March 2020 ($600/week for up to 4 months) doubtless pushed many incomes over the 100% FPL threshold. The American Rescue Plan Act then provided free marketplace coverage to anyone who received any unemployment insurance income in 2021. The emergency SEP in 2021 smoothed enrollment.
It's possible, though, that HealthSherpa's messaging for site visitors who estimate an income below 100% FPL was a contributing factor. To test that would require a look at HealthSherpa data -- whether there was a jump in reported incomes slightly above the 100% FPL threshold once the messaging began, and whether the percentage of HealthSherpa enrollees at very low incomes -- say, 110% or 120% FPL -- is notably higher than on HealthCare.gov.
The broader point is that pandemic conditions have likely eased a substantial number of low income people out of the coverage gap, and that HealthCare.gov could help that process along if it were to adopt messaging like HealthSherpa's, highlighting the eligibility threshold.
The point will be moot, at least through 2025, if the temporary coverage gap plug currently written into the Build Back Better bill becomes law. BBB would eliminate the 100% FPL threshold through 2025 and reduce cost sharing to Medicaid levels beginning in 2023. But passage of the BBB as we currently know it is far from guaranteed. And renewal of the benefit beyond 2025 by a Congress likely to be under at least partial Republican control is dubious. Meanwhile, with BBB still on the drawing board, applicants with incomes below 100% FPL in 11 states are still being denied subsidies. They deserve to know why -- and to deploy every legal tool available to "find that they're eligible for financial help"..."by providing more detailed financial information."
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* The current gap states are Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, and Wyoming. A twelfth nonexpansion state, Wisconsin, provides Medicaid eligibility to adults with incomes up to 100% FPL (rather than the ACA expansion threshold of 138% FPL), and thus has no coverage gap. Nebraska enacted the expansion in October 2020; Oklahoma, in July 2021; and Missouri, in October 2021.
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