A Closer Look at the Remaining Uninsured Population Eligible for Medicaid and CHIP
Recent policy attention on efforts to reduce the number of people uninsured has focused on expanding eligibility for coverage assistance, including enhanced premium subsidies in the Affordable Care Act (ACA) marketplace and filling the Medicaid “coverage gap.”
In particular, as Congress considers a budget measure to temporarily expand coverage to the more than two million uninsured people in the “coverage gap” due to state decisions not to expand Medicaid, there an additional 7.0 million nonelderly uninsured people who are eligible for Medicaid or the Children’s Health Insurance Program (CHIP) (more than a quarter of the 27.4 million uninsured in 2020). Although millions of more people are covered through Medicaid as a result of the economic effects of the coronavirus pandemic as well as the continuous coverage requirements tied to access to temporary enhanced Medicaid matching funds, many people eligible for Medicaid remain uninsured due to lack of knowledge of coverage options, difficulty signing up, or other reasons. Policies in the Build Back Better Act as well as outreach for the current open enrollment period for the Health Insurance Marketplaces could help reduce that number. This issue brief examines the characteristics of the remaining uninsured population who are eligible for Medicaid or CHIP.
How many uninsured people are eligible for financial assistance for coverage?
A majority of people who remained uninsured in 2020 are eligible for financial assistance for coverage either through Medicaid/CHIP or the Marketplace. More than a quarter or 7.0 million of the total 27.4 million nonelderly people who remained uninsured in 2020 are eligible for Medicaid or CHIP. Just under four in ten (38.1%) are eligible for subsidized coverage through the health care Marketplace. Among the remaining uninsured, 7.5% fall into the “coverage gap” because they live in one of the 12 states that have not adopted the Medicaid expansion, and the ACA does not provide financial assistance to people below poverty for other coverage options (Figure 1).
Who are uninsured people eligible for Medicaid/CHIP?
Most of the 7.0 million uninsured and eligible for Medicaid or CHIP (referred to as the uninsured and eligible for the rest of this brief) are adults. Of the 7.0 million uninsured and eligible 4.2 million are adults and 2.8 million are children (Figure 2). Adults include those made eligible for the program by expansion and individuals who were already eligible under pre-ACA rules but had not enrolled.
Across all nonelderly uninsured and eligible, nearly two-thirds are people of color and nearly three out of four live in working families (Figure 2). Nonelderly Hispanic people account for 40.0% of those uninsured and eligible, and Black people account for another 15.8%. More than a quarter (26.9%) are in families with no workers and nearly six in ten (58.4%) are in families with one or more full-time workers. Both full- and part-time low-wage workers are less likely to report having an offer of coverage from their employer or the coverage offered is too expensive.
Three quarters of the 7.0 million uninsured and eligible (5.2 million people) reside in expansion states, which have more people living in them and have higher income eligibility for adults than non-expansion states (Figure 2). The remaining 1.8 million people are in states that have not expanded Medicaid, but are eligible for Medicaid or CHIP under traditional (not ACA expansion) pathways. Most of the uninsured and eligible in expansion states are adults, while children make up the majority of the uninsured and eligible in non-expansion states (Figure 2). Eligibility for adults was expanded to 138% of poverty ($17,774 for an individual and $30,305 for a family of three in 2021) while in non-expansion states eligibility is limited for adults, often to below half of the federal poverty level. Most states (both expansion and non-expansion) have opted to set eligibility thresholds for children in Medicaid at higher levels, in most states above 200% of poverty. The differences in eligibility for adults across expansion and non-results in the variation in the shares of children and adults uninsured but eligible for Medicaid for these states.
What are key policy issues to watch looking ahead?
A KFF survey of consumers most likely to use or benefit from consumer assistance found that many people lack basic information about the ACA and available coverage options. Fewer than four in ten (38%) were aware that Medicaid enrollment is available year-round. In addition, only one in five people knew whether their state had expanded Medicaid. Another report cited lack of awareness of the programs, uncertainty about their eligibility, administrative hurdles in applying for coverage or renewing eligibility, or resistance to reliance on government programs as reasons for why those who are eligible for free or low-cost coverage including Medicaid may not enroll.
Understanding the reason why people do not enroll as well as the characteristics of those who are uninsured but currently eligible for Medicaid can help inform outreach efforts as well as policy changes designed to expand coverage and reduce the uninsured. Enhanced funding for outreach, advertising, and in-person assistance during the current Marketplace open enrollment period can raise awareness of Medicaid and promote Medicaid enrollment. For the 2022 open enrollment period, the Biden administration has launched expansive advertising and outreach campaigns to educate consumers on the availability of both Marketplace and Medicaid coverage. It has also increased funding for Navigators in the federal Marketplace seven-fold from $10 million in 2020 to $80 million in 2021. The enhanced Navigator funding will mean more staff to assist both Marketplace and Medicaid applicants.
The Build Back Better Act currently under consideration in Congress includes a number of policies that could reduce the uninsured and boost Medicaid coverage among those currently eligible, including additional funding for outreach and requirements for states to provide 12 month continuous coverage for children and for pregnant women. The legislation includes rules for states about unwinding the current maintenance of eligibility (MOE) or continuous coverage requirements that have been in place during the public health emergency to help ensure that individuals who remain eligible for coverage are not disenrolled. The legislation also includes a penalty (a restriction in the federal match rate) for states that implement eligibility or enrollment restrictions through 2025. More broadly, the legislation also would reduce the number of uninsured by allowing those in the coverage gap to temporarily access subsidized coverage in the Marketplaces beginning in 2022, though outreach will be particularly important to reach this newly-eligible population.