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Estimates of Eligibility for ACA Coverage among the Uninsured in 2016

The Affordable Care Act (ACA) extends health insurance coverage to people who lack access to an affordable coverage option. Under the ACA, as of 2014, Medicaid coverage is extended to poor and near poor adults in states that have opted to expand eligibility, and tax credits are available for low and middle-income people who purchase coverage through a health insurance Marketplace. Millions of people have enrolled in these new coverage options, and the uninsured rate has dropped to the lowest level ever recorded.1 However, millions of others are still uninsured. Some remain ineligible for coverage, and others may be unaware of the availability of new coverage options or still find coverage unaffordable even with financial assistance.

This analysis updates national and state-by-state estimates of eligibility for ACA coverage options among those who remained uninsured. It is based on Kaiser Family Foundation estimates based on the 2016 Current Population Survey, combined with other data sources. We estimate coverage and eligibility as of 2016. An overview of the methodology underlying the analysis can be found in the Methods box at the end of the data note, and more detail is available in the Technical Appendices available here.

Background: How Does the ACA Expand Health Coverage?

The ACA fills historical gaps in Medicaid eligibility by extending Medicaid to nearly all nonelderly adults with incomes at or below 138% of the federal poverty level (FPL) ($27,821 for a family of three in 2016).2 With the June 2012 Supreme Court ruling, the Medicaid expansion essentially became optional for states, and as of July 2016, 31 states and DC had expanded Medicaid eligibility under the ACA. Under rules in place before the ACA, all states already extended public coverage to poor and low-income children, with a median income eligibility level of 255% of poverty in 2016.3 The ACA also established Health Insurance Marketplaces where individuals can purchase insurance and allows for federal tax credits for such coverage for people with incomes from 100% to 400% FPL ($20,090 to $80,360 for a family of three in 2015).4,5 Tax credits are generally only available to people who are not eligible for other coverage.

Because the ACA envisioned low-income people receiving coverage through Medicaid, people with incomes below poverty are not eligible for Marketplace subsidies. Thus, in the 19 states not implementing the Medicaid expansion, some adults fall into a “coverage gap” of earning too much to qualify for Medicaid but not enough to qualify for premium tax credits. In addition, undocumented immigrants are ineligible for Medicaid coverage and barred from purchasing coverage through a Marketplace. In most cases, lawfully present immigrants are subject to a five-year waiting period before they may enroll in Medicaid, though they can purchase coverage through a Marketplace and may receive tax credits for such coverage.

How Many Uninsured Are Eligible for Assistance under the ACA?

We estimate that, as of 2016, approximately 27 million nonelderly people lacked health coverage in the U.S. Nationally, we estimate 43% of this population, or 11.7 million people, is eligible for financial assistance to gain coverage through either Medicaid or subsidized Marketplace coverage (Figure 1). Nearly a quarter are either adults eligible for Medicaid6 (3.8 million, or 14%) or children eligible for Medicaid or the Children’s Health Insurance Program (CHIP) (2.6 million, or 10%). Those who are Medicaid eligible include people who were previously eligible as well as those newly eligible under the ACA. One in five (5.3 million, or 19%) of the nonelderly uninsured is eligible for premium tax credits to purchase coverage through the Marketplace.7, 8

Figure 1: Eligibility for ACA Coverage Among Nonelderly Uninsured as of 2016

Figure 1: Eligibility for ACA Coverage Among Nonelderly Uninsured as of 2016

One in ten uninsured people (2.6 million) falls into the coverage gap due to their state’s decision not to expand Medicaid, and 20% of the uninsured (5.4 million) are undocumented immigrants who are ineligible for ACA coverage under federal law.

The remainder of the uninsured either has an offer of ESI (4.5 million, or 16%) or has an income above the limit for premium tax credits but could purchase unsubsidized Marketplace coverage (3.0 million, or 11%). We cannot determine from available survey data if the offer of ESI would be considered unaffordable under the law, which would make the individual eligible for a Marketplace premium subsidy.

Patterns of eligibility vary by state, depending on state decisions about expanding Medicaid, premiums in the exchange, and underlying demographic factors such as poverty rates and access to employer coverage. In states that expanded Medicaid, 35% of the nonelderly uninsured population is eligible for Medicaid, versus just 13% in states that have not expanded Medicaid (Figure 2). No one in Medicaid expansion states falls into a coverage gap; in non-expansion states, nearly one in five (19%) uninsured people falls into the coverage gap, a larger share than the share who are eligible for Medicaid under pathways in place before the ACA. Because adults with incomes from 100% to 138% of poverty in non-expansion states can receive tax credits for Marketplace coverage, a larger share of the uninsured population in those states is eligible for Marketplace tax credits than in expansion states (23% versus 16%).

Figure 2: Eligibility for ACA Coverage Among Nonelderly Uninsured as of 2016, by State Medicaid Expansion Status

Figure 2: Eligibility for ACA Coverage Among Nonelderly Uninsured as of 2016, by State Medicaid Expansion Status

For state-by-state estimates, see the table below.

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Number of Nonelderly People Eligible for ACA Coverage Among those Remaining Uninsured as of 2016

Data component not available
NOTES: Numbers may not sum to totals due to rounding. Medicaid/Other Public also includes CHIP and some state-funded programs for immigrants otherwise ineligible for Medicaid. Tax credit-eligible population in Minnesota and New York include uninsured adults who are eligible for coverage through the Basic Health Plan. Wisconsin covers adults up to 100% FPL in Medicaid under a waiver but did not adopt the ACA expansion. Cells marked “N/A” indicate that point estimates do not meet minimum standards for statistical reliability.
SOURCE: Kaiser Family Foundation analysis based on 2016 Medicaid eligibility levels and 2016 Current Population Survey.
Data component not available
NOTES: Numbers may not sum to totals due to rounding. Medicaid/Other Public also includes CHIP and some state-funded programs for immigrants otherwise ineligible for Medicaid. Tax credit-eligible population in Minnesota and New York include uninsured adults who are eligible for coverage through the Basic Health Plan. Wisconsin covers adults up to 100% FPL in Medicaid under a waiver but did not adopt the ACA expansion. Cells marked “N/A” indicate that point estimates do not meet minimum standards for statistical reliability.
SOURCE: Kaiser Family Foundation analysis based on 2016 Medicaid eligibility levels and 2016 Current Population Survey.

Though millions of people have gained coverage under the ACA and the uninsured rate has dropped to the lowest level ever recorded, many remain uninsured.9 The ACA provides new coverage options across the income spectrum for low and moderate-income people, and more than four in ten of the uninsured population appear to be eligible for Medicaid or subsidized Marketplace coverage. For these individuals, outreach and education about coverage and financial assistance may be important to continuing coverage gains that were seen in the first two years of full ACA implementation. Data from other sources indicate that misperceptions about cost, lack of awareness of financial assistance, and confusion about eligibility rules were barriers to gaining coverage for some eligible uninsured.10,11,12 Others report that they found coverage to be too expensive, even with the availability of financial assistance.

Nearly a third of the remaining uninsured population is outside the reach of the ACA due to either their immigration status or their state’s decision not to expand Medicaid. People in the coverage gap would be eligible for Medicaid should their state opt to expand Medicaid but are otherwise likely to remain uninsured, as they have limited incomes, are unlikely to have an affordable offer of coverage from an employer, and do not have access to affordable coverage options under the ACA. Many undocumented immigrants also will likely remain uninsured.13 As more eligible people enroll in coverage over time, those ineligible for coverage will account for a larger share of the remaining uninsured.

Approximately a quarter of the uninsured population is not eligible for any assistance under the ACA because they have access to employer coverage that may be considered affordable or have incomes too high to qualify for Medicaid or Marketplace subsidies. Some of these people may face a financial penalty under the ACA’s so-called “individual mandate.” It is possible that, upon facing these penalties when filing their 2016 tax returns, more people will opt to purchase coverage.

As the beginning of open enrollment for 2017 Marketplace coverage approaches, there are still substantial opportunities to increase coverage by reaching those who are eligible for help under the ACA, particularly among children and the low-income population, who are eligible for the greatest assistance. However, many of those who remain without coverage may be difficult to reach and could still remain uninsured.

Rachel Garfield, Cynthia Cox, Gary Claxton, and Larry Levitt are with the Kaiser Family Foundation. Anthony Damico is an independent consultant to the Kaiser Family Foundation.

Table 3: Number and Distribution of Nonelderly Uninsured Ineligible for Financial Assistance due to Income, Offers of Employer Coverage, or Citizenship Status as of 2016, in States with Sufficient Sample Size
State Number of Nonelderly Uninsured Ineligible due to: % of Nonelderly Uninsured Ineligible due to:
Total Ineligible Due to Income, ESI Offer, or Citizenship Income Employer Offer Citizenship Total Ineligible Due to Income, ESI Offer, or Citizenship Income Employer Offer Citizenship
US Total 12,876,000 3,003,000 4,462,000 5,411,000 47% 11% 16% 20%
Alabama 182,000 65,000 94,000 23,000 37% 13% 19% 5%
Arizona 335,000 67,000 112,000 156,000 43% 9% 15% 20%
Arkansas 99,000 29,000 38,000 33,000 40% 12% 15% 13%
California 1,494,000 316,000 279,000 898,000 54% 11% 10% 32%
Colorado 221,000 68,000 68,000 85,000 51% 16% 16% 20%
Florida 1,082,000 255,000 353,000 473,000 45% 11% 15% 20%
Georgia 619,000 119,000 244,000 257,000 46% 9% 18% 19%
Idaho 86,000 14,000 43,000 30,000 49% 8% 24% 17%
Illinois 417,000 105,000 127,000 184,000 56% 14% 17% 25%
Indiana 215,000 64,000 91,000 60,000 38% 11% 16% 11%
Louisiana 153,000 41,000 79,000 34,000 33% 9% 17% 7%
Massachusetts 185,000 58,000 90,000 36,000 68% 21% 33% 13%
Nevada 162,000 33,000 49,000 80,000 55% 11% 17% 27%
New Jersey 399,000 88,000 92,000 219,000 60% 13% 14% 33%
New Mexico 100,000 27,000 29,000 44,000 44% 12% 13% 19%
New York 545,000 128,000 201,000 216,000 46% 11% 17% 18%
North Carolina 400,000 63,000 157,000 180,000 38% 6% 15% 17%
Pennsylvania 289,000 108,000 128,000 54,000 44% 16% 19% 8%
South Carolina 188,000 64,000 86,000 38,000 38% 13% 18% 8%
Tennessee 310,000 87,000 114,000 109,000 46% 13% 17% 16%
Texas 2,310,000 418,000 699,000 1,192,000 56% 10% 17% 29%
Utah 132,000 37,000 51,000 45,000 46% 13% 18% 16%
NOTES: States not included above do not have sufficient sample size to show distribution of uninsured nonelderly ineligible for financial assistance in at least one of the three categories (income, ESI, and/or citizenship). Numbers may not sum to totals due to rounding.
SOURCE: Kaiser Family Foundation analysis based on 2016 Medicaid eligibility levels and 2016 Current Population Survey.

Methods

This analysis uses data from the 2016 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC). The CPS ASEC provides socioeconomic and demographic information for the United Sates population and specific subpopulations. Importantly, the CPS ASEC provides detailed data on families and households, which we use to determine income and household composition for ACA eligibility purposes.

Medicaid and Marketplaces have different rules about household composition and income for eligibility. For this analysis, we calculate household membership and income for both Medicaid and Marketplace premium tax credits for each person individually, using the rules for each program. For more detail on how we construct Medicaid and Marketplace households and count income, see the detailed technical Appendix A available here.

Undocumented immigrants are ineligible for federally-funded Medicaid and Marketplace coverage. Since CPS data do not directly indicate whether an immigrant is lawfully present, we draw on the methods underlying the 2013 analysis by the State Health Access Data Assistance Center (SHADAC) and the recommendations made by Van Hook et. al.14,15 This approach uses the Survey of Income and Program Participation (SIPP) to develop a model that predicts immigration status; it then applies the model to CPS, controlling to state-level estimates of total undocumented population from Department of Homeland Security. For more detail on the immigration imputation used in this analysis, see the technical Appendix B available here.

Individuals in tax-filing units with access to an affordable offer of Employer-Sponsored Insurance are still potentially MAGI-eligible for Medicaid coverage, but they are ineligible for advance premium tax credits in the Health Insurance Exchanges. Since CPS data indicate whether a worker held an offer of ESI at the time of interview (for the 2016 CPS, February, March, or April 2016) but not during the prior year (which serves as our basis for type of insurance coverage), we developed a model that predicts offer of ESI for any individuals with a change in employment status across the period. For more detail on the offer imputation used in this analysis, see the technical Appendix C available here.

The CPS asks respondents about coverage at the time of the interview as well as throughout the preceding calendar year. People who report any type of coverage throughout the preceding calendar year are counted as “insured.” Thus, the calendar year measure of the uninsured population captures people who lacked coverage for the entirety of 2015 (and thus were uninsured at the start of 2016). We use this measure of insurance coverage in 2015, rather than the measure of coverage at the time of interview, because the latter lacks detail about coverage type that is used in our model. Based on other survey data, as well as administrative data on ACA enrollment, it is likely that a small number of people included in that population gained coverage in 2016; therefore, we controlled our uninsured estimates to CDC early release statistics from the National Health Interview Survey for 2016. For more detail on how we calibrated our uninsured counts, see detailed technical Appendix D available here.

As of January 2014, Medicaid financial eligibility for most nonelderly adults is based on modified adjusted gross income (MAGI). To determine whether each individual is eligible for Medicaid, we use each state’s reported eligibility levels as of January 1, 2016, updated to reflect state Medicaid expansion decisions as of September 2016 and 2016 Federal Poverty Levels.16 Some nonelderly adults with incomes above MAGI levels may be eligible for Medicaid through other pathways; however, we only assess eligibility through the MAGI pathway.17

An individual’s income is likely to fluctuate throughout the year, impacting his or her eligibility for Medicaid. Our estimates are based on annual income and thus represent a snapshot of the number of people in the coverage gap at a given point in time. Over the course of the year, a larger number of people are likely to move and out of the coverage gap as their income fluctuates.

Appendix A: Household Construction

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.