2021 Hero ACA Low Income Coverage Gap Affordable Care Act

How to close the low income coverage gap and expand access to care for millions

At a time when every American needs access to high-quality, affordable health care, many have been left without coverage because they fall within the low income “coverage gap.” Specifically, in 2019, more than four million adults fell into this coverage gap because they earned too much money to qualify for Medicaid coverage, but too little to qualify for Affordable Care Act (ACA) premium subsidies—making health care unaffordable.

These uninsured Americans face significant barriers to receiving care. They are also disproportionately likely to be people of color and to live in communities that have faced long-standing, systemic racism and discrimination. Factor in persistent public health and economic crises due to the COVID-19 pandemic, and the situation could not be more severe.

Medicaid expansion increases coverage

Under the ACA, Medicaid coverage was expanded to everyone with a household income up to 138 percent of the Federal Poverty Level (FPL), but in 2012, the U.S. Supreme Court ruled that each state has the right to decide whether to expand their Medicaid programs. Today, 39 states (including the District of Columbia) have expanded Medicaid under the ACA, but 12 have not.

The American Rescue Plan Act of 2021 incentivized states that have not expanded Medicaid by offering a temporary increase to the Federal Medical Assistance Percentage (FMAP)—the share of Medicaid costs that the federal government pays in each state. Specifically, the law provides a 5 percent FMAP bump to the state’s traditional Medicaid population, then an ongoing 90 percent FMAP match for the Medicaid expansion population, which aligns with current expansion state programs. If all Medicaid non-expansion states were to expand under this program and the ACA, it is estimated an additional 10 million people would have health insurance.

Research has also shown that states that expanded Medicaid under the ACA saw improvement in their fiscal budgets, reduced average premiums in the individual market and improved the health of those who became newly insured.

See the BCBSA proposals for expanding access to care, lowering costs and creating a more equitable health care system.

 

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