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Estimates of Eligibility for ACA Coverage among the Uninsured in 2016

Despite historic coverage gains under the Affordable Care Act (ACA), more than 27 million people in the United States remain without insurance coverage.1 Recent debate over the future of the ACA has led to uncertainty about whether and how ACA coverage will be maintained. The public reports confusion about the future of the law, and outreach to help inform people about coverage options is more limited than in past years. Still, millions of currently uninsured people are eligible for ACA coverage under current law, and given upcoming open enrollment, it is helpful to understand how many people could potentially gain ACA coverage. In addition, the administration has indicated to states that it is open to state Medicaid waiver proposals, which may lead some states that have not yet expanded Medicaid under the ACA to develop Medicaid expansion waivers and further extend coverage. Understanding how many people might be eligible for coverage under the ACA or could be reached with policy changes can inform these policy discussions.

This analysis provides national and state-by-state estimates of eligibility for ACA coverage options among those who remained uninsured. An overview of the methodology underlying the analysis can be found in the Methods box at the end of the data note and in the Technical Appendices.

Background: How Does the ACA Expand Health Coverage?

Under the ACA, Medicaid coverage is extended to nearly all nonelderly adults with incomes at or below 138% of the federal poverty level (FPL) ($28,180 for a family of three in 20172) in the 32 states (including DC) that opted to expand as of October 2017. Under rules in place before the ACA, all states extend 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 ($20,420 to $81,680 for a family of three in 2017).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?

In 2016, 27.5 million nonelderly people lacked health coverage in the U.S. Nationally, we estimate 53% of this population, or 14.6 million people, is eligible for financial assistance to gain coverage through either Medicaid or subsidized Marketplace coverage (Figure 1). One quarter are either adults eligible for Medicaid6 (4.1 million, or 15%) or children eligible for Medicaid or the Children’s Health Insurance Program (CHIP) (2.7 million, or 10%). Those who are Medicaid eligible include people who were previously eligible as well as those newly eligible under the ACA. Nearly a third (7.9 million, or 29%) of the nonelderly uninsured is eligible for premium tax credits to purchase coverage through the Marketplace.7

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

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

Nearly one in ten uninsured people (2.4 million) falls into the coverage gap due to their state’s decision not to expand Medicaid. These individuals have incomes below poverty but do not qualify for Medicaid in their state, nor do they qualify for Marketplace tax credits. An additional 14% of the uninsured (3.9 million) are undocumented immigrants who are ineligible for ACA coverage under federal law.

The remainder of the uninsured either has an offer of ESI (3.7 million, or 13%) or has an income above the limit for premium tax credits but could purchase unsubsidized Marketplace coverage (2.9 million, or 10%). 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, 37% 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 (17%) 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 (35% versus 23%).

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 and Table 3 later in the brief.

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Distribution of Nonelderly Eligibility for ACA Coverage Among Those Remaining Uninsured as of 2016:

NOTES: Numbers may not sum to 100% due to rounding. *LA’s Governor signed an Executive Order to adopt the Medicaid expansion on 1/12/16, but coverage under the expansion is not yet in effect. For purposes of this analysis, LA is considered an expansion state. ^ 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. Estimates of subsidy eligibility of uninsured nonelderly in DC, HI, KY, MA, and OR are “N/A” because point estimates do not meet minimum standards for statistical reliability.

SOURCE: Kaiser Family Foundation analysis based on 2015 Medicaid eligibility levels updated to reflect state Medicaid expansion decisions as of January 2016 and 2015 Current Population Survey data.

Number of Nonelderly Eligibility for ACA Coverage Among Those Remaining Uninsured as of 2016:

NOTES: Numbers may not sum to 100% due to rounding. *LA’s Governor signed an Executive Order to adopt the Medicaid expansion on 1/12/16, but coverage under the expansion is not yet in effect. For purposes of this analysis, LA is considered an expansion state. ^ 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. Estimates of subsidy eligibility of uninsured nonelderly in DC, HI, KY, MA, and OR are “N/A” because point estimates do not meet minimum standards for statistical reliability.

SOURCE: Kaiser Family Foundation analysis based on 2015 Medicaid eligibility levels updated to reflect state Medicaid expansion decisions as of January 2016 and 2015 Current Population Survey data.

Discussion

Going without health insurance has adverse implications for people’s health and financial well-being and also has negative consequences for providers and the health system. Survey results indicate that a very small share of the uninsured population—about 2% in 2016—say that the reason they go without insurance is because they don’t want coverage.8 Rather, people remain uninsured due to limits on eligibility, ongoing concerns about cost, or lack of awareness of affordable options.

The ACA extended health insurance to millions of previously uninsured Americans and, despite ongoing debate about the future of the ACA, has the potential to reach more uninsured people. We estimate that more than half of the uninsured population are eligible for Medicaid or subsidized Marketplace coverage. For these individuals, outreach and education about coverage and financial assistance will be important to continuing coverage gains that were seen in the early 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 initial barriers to gaining coverage for some eligible uninsured.9,10,11 Others report that they found coverage to be too expensive, even with the availability of financial assistance.  Recent policy changes and debate, such as cuts to funding for ACA enrollment assistance, uncertainty about federal payments for cost-sharing reductions, and debate over the future of Medicaid coverage, may exacerbate these challenges and make continued coverage gains difficult.

Nearly one in ten of the remaining uninsured population is outside the reach of the ACA due to 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. While there is no deadline for states to expand Medicaid under the ACA, several non-expansion states have reported that consideration of the Medicaid expansion is on hold due to uncertainty about the future of the Medicaid expansion option.

In addition, 14 percent of the uninsured population is ineligible for coverage due to their immigration status. Most uninsured undocumented immigrants will likely remain without coverage, though there are some state or locally-funded programs that provide coverage or assistance to immigrants regardless of immigration status.12 Recent actions by the Administration to increase immigration enforcement activities could deter people from enrolling in these programs. They also have spillover effects of deterring eligible immigrants in mixed status families from enrolling in coverage.

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.” However, notable shares of uninsured adults are either unaware that the mandate is in effect or are misinformed about its scale, and a minority of those who have purchased ACA coverage say the mandate was a major motivating factor.13

As the beginning of open enrollment for 2018 Marketplace coverage approaches, there are still substantial opportunities to increase coverage by reaching those who are eligible for help under the ACA. However, given confusion and misinformation about the ACA, many may be difficult to reach without targeted and effective outreach to explain coverage options and assist with enrollment.

Rachel Garfield, Julia Foutz, 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  10,450,000  2,873,000  3,658,000  3,920,000 38% 10% 13% 14%
Arizona  320,000  58,000  117,000  145,000 39% 7% 14% 18%
Arkansas  100,000  35,000  33,000  33,000 45% 15% 15% 15%
California  1,343,000  317,000  322,000  705,000 46% 11% 11% 24%
Florida  964,000  306,000  318,000  340,000 40% 13% 13% 14%
Georgia  429,000  84,000  153,000  192,000 35% 7% 12% 16%
Illinois  375,000  126,000  100,000  149,000 41% 14% 11% 16%
Indiana  149,000  49,000  54,000  47,000 35% 11% 13% 11%
Louisiana  121,000  32,000  48,000  41,000 26% 7% 10% 9%
Mississippi  111,000  36,000  57,000  18,000 32% 10% 16% 5%
Nevada  111,000  41,000  23,000  48,000 44% 16% 9% 19%
New Jersey  336,000  75,000  119,000  143,000 50% 11% 18% 21%
New York  433,000  122,000  111,000  200,000 40% 11% 10% 19%
North Carolina  369,000  92,000  107,000  170,000 35% 9% 10% 16%
South Carolina  110,000  32,000  44,000  34,000 25% 7% 10% 8%
Tennessee  215,000  64,000  98,000  53,000 29% 9% 13% 7%
Texas  1,657,000  440,000  450,000  767,000 40% 11% 11% 18%
Utah  93,000  25,000  40,000  28,000 25% 7% 11% 8%
Vermont  13,000  6,000  7,000  – 39% 18% 21% 0%
Virginia  280,000  68,000  114,000  98,000 35% 8% 14% 12%
Washington  226,000  73,000  73,000  79,000 45% 15% 15% 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 2017 Medicaid eligibility levels and 2017 Current Population Survey.

Methods

This analysis uses data from the 2017 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.

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 Pew Research Center. For more detail on the immigration imputation used in this analysis, see the technical Appendix B.

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 2017 CPS, February, March, or April 2017) 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.  Additionally, for families with a Marketplace eligibility level below 250% FPL, we assume any reported worker offer does not meet affordability requirements and therefore does not disqualify the family from Tax Credit eligibility on the Exchanges. For more detail on the offer imputation used in this analysis, see the technical Appendix C.

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 2016 (and thus were uninsured at the start of 2017). We use this measure of insurance coverage in 2016, 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.

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, 2017, updated to reflect state Medicaid expansion decisions as of October 2017 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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