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New Estimates of Eligibility for ACA Coverage among the Uninsured « » The Henry J. Kaiser Family Foundation

New Estimates of Eligibility for ACA Coverage among the Uninsured

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 low-income adults in states that have opted to expand eligibility, and tax credits are available for middle-income people who purchase coverage through a health insurance Marketplace. Millions of people have enrolled in these new coverage options, but 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 provides national and state-by-state estimates of eligibility for ACA coverage options among those who remained uninsured. It is based on Kaiser Family Foundation analysis of the 2015 Current Population Survey, combined with other data sources. We estimate coverage and eligibility as of early 2015, which is prior to the end of the 2015 Marketplace open enrollment period. 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) ($27,724 for a family of three in 20151). With the June 2012 Supreme Court ruling, the Medicaid expansion essentially became optional for states, and as of September 2015, 30 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 2015.2 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 ($19,790 to $79,160 for a family of three in 2015).3,4 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 20 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?

As of the beginning of 2015, 32.3 million nonelderly people lacked health coverage in the U.S. Nationally, we estimate that nearly half (15.7 million, or 49%) of this population is eligible for financial assistance to gain coverage through either Medicaid or subsidized Marketplace coverage (Figure 1). More than a quarter are either adults eligible for Medicaid (5.4 million, or 17%) or children eligible for Medicaid or the Children’s Health Insurance Program (CHIP) (3.2 million, or 10%). Those who are Medicaid eligible include people who were previously eligible as well as those newly eligible under the ACA. About one in five (7.1 million, or 22%) of the nonelderly uninsured are eligible for premium tax credits to purchase coverage through the Marketplace.5

Figure 1: Eligibility for ACA Coverage Among Nonelderly Uninsured as of 2015

One in ten uninsured people (3.1 million) fall into the coverage gap due to their state’s decision not to expand Medicaid, and 15% of the uninsured (4.9 million) are undocumented immigrants who are ineligible for ACA coverage under federal law.

The remainder of the uninsured either has an offer of ESI (4.9 million, or 15%) or has an income above the limit for premium tax credits but could purchase unsubsidized Marketplace coverage (3.7 million, or 12%). We cannot determine from available survey data if the offer of ESI would be considered affordable under the law, which would make the individual ineligible for a Marketplace premium subsidy.

Figure 2: Eligibility for ACA Coverage Among Nonelderly Uninsured as of 2015, by State Medicaid Expansion Status

Figure 2: Eligibility for ACA Coverage Among Nonelderly Uninsured as of 2015, by State Medicaid Expansion Status

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, 40% 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, while about two-thirds as many 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 (27% versus 17%).  For state-by-state estimates, see the table below; additional detail is available here.

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Distribution of Nonelderly Eligibility for ACA Coverage Among Those Remaining Uninsured as of 2015:

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Number of Nonelderly Eligibility for ACA Coverage Among Those Remaining Uninsured as of 2015:

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Though millions of people have gained coverage under the ACA, many remain uninsured. The ACA provides new coverage options across the income spectrum for low and moderate-income people, and nearly half 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 indicates that misperceptions about cost, lack of awareness of financial assistance, and confusion about eligibility rules were barriers to some eligible uninsured gaining coverage.6 Others report that they found coverage to be too expensive, even with the availability of financial assistance.7

A quarter 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.8

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. Increased penalties under the ACA’s so-called “individual mandate” in 2016 may encourage some of them to obtain coverage.

As the beginning of open enrollment for 2016 Marketplace coverage approaches, there are still substantial opportunities to increase coverage by reaching those who are eligible for help under the ACA, but the breakdown of who the remaining uninsured are suggests that many may be difficult to reach and will 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.

This analysis uses data from the 2015 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 for ACA eligibility purposes.

The CPS asks respondents about coverage at the time of the interview (for the 2015 CPS, February, March, or April 2015) 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 2014 (and thus were uninsured at the start of 2015). We use this measure of insurance coverage, 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 this analysis gained coverage in 2015.

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 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.9,10 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 do not directly indicate whether workers have access to ESI, we draw on the methods comparable to our imputation of authorization status and use SIPP to develop a model that predicts offer of ESI, then apply the model to CPS. For more detail on the offer imputation used in this analysis, see the technical Appendix C 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, 2015, updated to reflect state implementation of the Medicaid expansion as of September 2015 and 2015 Federal Poverty Levels.11 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.12

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 in and out of the coverage gap as their income fluctuates.