A Closer Look at the Uninsured Marketplace Eligible Population Following the American Rescue Plan Act

The American Rescue Plan Act (ARPA) was passed by Congress and signed into law by President Biden in March 2021. The ARPA includes provisions that increase subsidies for Marketplace shoppers who were already eligible for financial assistance and removes the upper income cap on subsidy eligibility, eliminating what was known as the “subsidy cliff.” As a result, KFF estimated that roughly 3.7 million more Americans, more than a third of whom are uninsured, are newly eligible for financial assistance to buy their own coverage on the exchanges, and millions more are eligible for increased financial assistance.

As of April 30, nearly 1 million people had enrolled in a HealthCare.gov plan during the ongoing special enrollment period, which lasts through August 15. The Centers for Medicare and Medicaid Services (CMS) announced an outreach campaign to inform people about Marketplace enrollment opportunities and the enhanced financial assistance. For 2021 and 2022, CMS released over $80 million in grants to Navigators and related organizations that help consumers enroll in coverage and provide outreach and educational services. The Trump administration had made substantial cuts to ACA marketing activities and Navigator programs, which received just $10 million in grants in both 2018 and 2019.

In this analysis, we examine key demographic characteristics of the 10.9 million uninsured people who are eligible for Marketplace subsidies, including 6 million uninsured individuals eligible for tax credits that cover the full cost of a Marketplace plan. We exclude people who are eligible for Medicaid, Medicare, or affordable employer coverage, as well as those who are undocumented immigrants. We also exclude people who fall into the Medicaid coverage gap, since Marketplace coverage is generally unaffordable to people with incomes below poverty.

We find that relatively large shares of uninsured people eligible for significant assistance to buy Marketplace coverage are young adults without college educations, Hispanic, non-native English speakers, and working in the fields of entertainment, recreation, and construction. Most people eligible for free Marketplace coverage are concentrated in a handful of states (Texas, Florida, North Carolina, and Georgia). These findings can inform marketing, outreach, and enrollment assistance activities as the 2021 special enrollment period continues and consumers begin shopping for 2022 coverage later this year.

Findings

We estimate there are approximately 12.1 million¹  uninsured potential Marketplace shoppers, of whom the vast majority (10.9 million) are eligible for subsidies under the ACA and ARPA to help lower the cost of coverage.

Nationally, certain groups are overrepresented among the uninsured who are eligible for Marketplace subsidies following the enactment of the ARPA. We find that 30% of uninsured people eligible for Marketplace subsidies are Hispanic (compared to 20% of non-elderly people in the U.S.), 59% have a high school diploma or less (compared to 36% of non-elderly adults in the U.S.), and 42% are young adults ages 19 to 34 (compared to 25% of non-elderly people in the U.S.). In total:

• 10.9 million uninsured people could purchase Marketplace coverage for a reduced premium. Although subsidies for this group may not cover the full premium, they can significantly lower the premium and/or out-of-pocket liability. Even so, some people in this group may still find Marketplace coverage unaffordable or unattractive due to high deductibles.
• At least 6.0 million uninsured people could get a free Marketplace plan (with a $0 premium payment, after accounting for subsidies). As explained in our earlier brief and in some detail below, people in this group would clearly benefit from getting Marketplace coverage rather than continuing to go without coverage.
• Of uninsured people who are eligible for $0 premium plans, 1.3 million have incomes below 150% of poverty, which makes them eligible for a free benchmark silver plan and substantial cost-sharing reductions (CSRs) that would make their plan more similar to platinum level coverage (which an average deductible of $177 in 2021). Some people with incomes just above 150% of poverty may also qualify for zero-premium silver plans depending on the gap in price between the benchmark (second-lowest cost) silver plan and the lowest-cost silver plan in their area.
• In addition, under the ARPA, any person who qualifies to purchase a Marketplace plan and receives unemployment compensation in 2021 is similarly eligible for a benchmark silver plan with a $0 premium and cost-sharing assistance. Therefore, our estimate of the number of uninsured people eligible for zero-premium plans is likely an undercount.

Subsidy ELigible uninsured: key characteristics

We estimate that 10.9 million non-elderly uninsured people in the U.S. are eligible for some level of subsidy to help purchase a Marketplace plan. Relative to the general non-elderly population in the U.S., uninsured people eligible for Marketplace subsidies are more likely to be:

• High school educated: 59% of subsidy eligible adults have a high school education or less, compared to 36% of non-elderly adults in the U.S.
• Young Adults: 42% of subsidy eligible uninsured people are ages 19-34, compared to 25% of the non-elderly U.S. population.
• Hispanic: 30% of subsidy eligible uninsured people are Hispanic, compared to 20% of the non-elderly U.S. population.
• Living in rural areas: 16% of subsidy eligible uninsured people live in non-metro areas, compared to 13% of the non-elderly U.S. population.
• Lacking internet access: 11% of subsidy eligible uninsured people do not have internet access at home, compared to 6% of the non-elderly U.S. population.

uninsured eligible for Zero premium plans: key characteristics

We estimate that at least 6.0 million uninsured people in the U.S. could get a bronze or silver plan on the ACA Marketplace with a $0 premium contribution, after accounting for their subsidy. Compared to the total subsidy-eligible uninsured population and the general U.S. population, uninsured people eligible for free Marketplace plans are more likely to be:

• High school educated: 62% of free bronze eligible uninsured adults and 65% of the free silver eligible uninsured people have a high school education or less, compared to 59% of all subsidy-eligible uninsured people and 36% of all non-elderly adults in the U.S.
• Hispanic: 32% of free bronze eligible uninsured people and 41% of the free silver eligible uninsured people are Hispanic, compared to 30% of all subsidy eligible uninsured people and 20% of the total non-elderly population.
• Lacking internet access: 13% of the free bronze eligible uninsured people and 15% of free silver eligible uninsured people do not have internet access at home, compared to 11% of all subsidy eligible uninsured people and 6% of the total non-elderly population.
• Non-English speaker at home: 35% of free bronze eligible uninsured people and 46% of free silver eligible uninsured people speak a language other than English at home, compared to 23% of the U.S. non-elderly population.

In addition to the 1.3 million uninsured people who qualify for zero-premium benchmark silver plans because their income is less than 150% of poverty, there are likely many more uninsured people who qualify for free silver plans because the ARPA ensures that any enrollee receiving unemployment insurance at some point in 2021 is eligible for zero-premium platinum-like coverage. As noted above, there are also some uninsured people with incomes just above 150% of poverty who would have to pay a small premium for a benchmark silver plan, but may receive enough in subsidies to cover the full cost of the lowest-cost silver plan in their area. Further, there are many counties in the U.S. where the lowest-cost gold plan is cheaper than the lowest-cost silver plan. Lower-income Marketplace shoppers in these areas could potentially purchase a free gold plan with lower cost-sharing and more financial protection than plans in lower metal levels.

As we have explained in earlier analyses, many people who are eligible for a free bronze plan are also eligible for a low-cost silver plan with a substantially lower deductible due to CSRs. The average annual deductible for people with incomes between 150-200% of poverty who choose to enroll in a silver plan with a CSR is $800. Many people in this group, therefore, could be better off buying a silver plan with a small premium than a zero-premium bronze plan.

Even so, all of the uninsured eligible for a free bronze or a free silver plan would be better off taking advantage of that $0 premium coverage instead of remaining uninsured. People in this group may need help understanding the tradeoff between silver and bronze coverage (i.e. affordability of the premium and deductible), as well as help understanding the benefits that even a high-deductible bronze plan offers over being uninsured (i.e. free preventive care, limited out-of-pocket liability, lower negotiated payment rates to providers, and often at least some covered benefits before having to meet the deductible).

Almost half of the uninsured who could get a free bronze plan live in Texas, Florida, North Carolina, or (Figure 1). A detailed table in the appendix provides demographic characteristics of people eligible for free Marketplace coverage in each state.

Discussion

The findings of this analysis can inform government agencies, insurers, or Navigators tasked with outreach and marketing responsibilities, helping them to target specific groups that are more likely to be uninsured but eligible for significant financial assistance. The Department of Health and Human Services has announced concerted efforts to reach historically uninsured communities during the ongoing special enrollment period. Relatively large shares of uninsured people eligible for significant assistance to buy Marketplace coverage are young adults without college educations, Hispanic, non-native English speakers, and working in the fields of entertainment, recreation, and construction. Most people eligible for free bronze or silver coverage are concentrated in a handful of states (including Texas, Florida, Georgia, and North Carolina).

In addition to the findings highlighted above, the appendix of this brief provides detailed demographics about the uninsured population eligible for fully-subsidized coverage in each state.

2021 Premiums come from KFF analysis of premium data from Healthcare.gov and state rating filings. Data on population, income, and eligibility for subsidies come from KFF analysis of the Census Bureau’s 2019 American Community Survey (ACS). The ACS includes a 1% sample of the US population and allows for precise state-level estimates. The ACS asks respondents about their health insurance coverage at the time of the survey. Respondents may report having more than one type of coverage; however, individuals are sorted into only one category of insurance coverage. The 2019 ACS collected income and coverage data from respondents before the pandemic, but there are various reasons that the data are still a reasonable basis for current uninsured eligibility analyses. First, the national uninsured rate has stabilized in recent years and expectations are that it has remained relatively flat thus far during the pandemic. Second, at least prior to enhanced subsidies outlined in the ARPA, the number of uninsured people eligible and ineligible for subsidies have also stayed generally consistent. Under the previous ACA subsidy structure, KFF estimated the number of uninsured people eligible for free bronze plans had fluctuated between 4.0 and 4.7 million the past three years.

This analysis does not include individuals who are over the age of 65, who are eligible for Medicaid in 2021, who have incomes below poverty, or are undocumented immigrants. We exclude individuals who are uninsured but have an affordable offer of employer-based coverage. Under the current ACA structure, workers and their family members are ineligible for tax credits if any worker in the household is offered “affordable” health insurance through their employer. Employer coverage is considered affordable if the worker’s premium contribution for self-only amounts to less than 9.83% of household income.

Unsubsidized premiums used in this analysis are the full price of plans, rather than specifically the portion that covers essential health benefits (EHB). Since premium tax credits can only be used to cover the EHB portion of premiums, some of the individuals denoted as having access to a “free” bronze plan might actually have to pay a very small premium for non-essential health benefits if they enrolled in a bronze plan with added benefits. The ACA does not permit federal subsidies to pay for abortion coverage and requires plans to collect no less than $1.00 per month for this coverage. In CA, IL, NY, ME, OR, and WA, state law requires that that all state regulated plans include abortion coverage. Policyholders who live in these states must pay the abortion surcharge even though they may qualify for subsidies that provide the full cost of premiums if they select a bronze plan. Providence Health Plans in OR and WA have a religious exemption allowing them to exclude abortion coverage.

1. This estimate includes people who are subsidy eligible and people who are ineligible for subsidies because their premiums are too low relative to their incomes. It excludes people who are eligible for Medicare, Medicaid, or affordable employer coverage, as well as those who are undocumented immigrants. People who fall into the Medicaid coverage gap are also excluded because Marketplace coverage is generally unaffordable for people with incomes below poverty. If we include people with affordable employer offers of coverage, there are approximately 15 million uninsured people who are eligible to purchase ACA Marketplace plans. ↩︎