ACA enrollment under ARPA: The view from near 100% FPL (and San Antonio)

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The ACA's tragic coverage gap confronts poor people in the 12 states that have refused to date to enact the ACA Medicaid expansion with a cruel logical absurdity: they may earn too little to qualify for government-supported health coverage.  Adults in households with incomes below the Federal Poverty Level (100% FPL) do not qualify for subsidized coverage in the ACA marketplace.

A few weeks ago, I noted that on May 5 CMS put a modest patch on the coverage gap by rescinding a Trump era policy of demanding income verification from marketplace applicants in nonexpansion states if "trusted data sources" indicated that the applicant's income was likely below 100% FPL -- i.e., ineligible for subsidies -- and the applicant had estimated an income above that threshold. (Since HHS's computer systems can't be retooled instantly, CMS explained, the exchanges will continue to request documentation in these circumstances for some time -- but in followup communication, they will "notify those consumers that they need not provide the requested information.")

In effect, a low-income applicant can make a good faith estimate of a household income in the coming year above 100% FPL and qualify for subsidized coverage (now free through 2022, if income is below 150% FPL, thanks to the subsidy boosts in the American Rescue Plan enacted on March 11). Documentation will not be required (though awkwardly, it will be requested for some time).  If income for the year in question ultimately proves to fall below the 100% FPL threshold, there is no clawback of subsidies granted, unless the applicant's income estimate is made with "intentional or reckless disregard for the facts."* 

The opportunity for low-income applicants to estimate their way into free coverage is the sort of regulatory forbearance that inspires high moral dudgeon from conservative adversaries of the ACA. In fact, though, poor or near-poor people in nonexpansion states who get as far as applying for health coverage - many don't, as ignorance of ACA programs is pervasive -- are likelier to underestimate their income than overestimate it. 

The American Rescue Plan Act makes free coverage available to many below 100% FPL in nonexpansion states

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An odd provision  the American Rescue Plan Act that President Biden signed yesterday provides that anyone who receives any unemployment insurance income this year will be deemed to have income of no more than 133% of the Federal Poverty Level (FPL), qualifying them for a free silver plan in the ACA marketplace. 

Silver plans at that income come with the highest Cost Sharing Reduction (CSR), raising the plan's actuarial value to 94%, which translates to an average deductible of about $200 and an average cap on annual out-of-pocket costs of about $1100. The plan is free because ARPA zeroes out premiums for a benchmark silver plan at incomes up to 150% FPL.

When I first read about this provision, I thought that maybe it was intended in part as one more way to chip away at the "coverage gap" in the twelve remaining states that have refused to enact the ACA Medicaid expansion (rendered optional to states by the Supreme Court in 2012). In those states, eligibility for ACA marketplace subsidies begins at 100% FPL, and families with incomes below that threshold get no help obtaining coverage. The Kaiser Family Foundation estimates that about 2.2 million people in nonexpansion states (chief among them Texas, Florida, Georgia and North Carolina) are in the coverage gap.