Workers in states that embraced Medicaid expansion would have a better chance of accessing healthcare coverage assistance if unemployment compensation were not included in the eligibility determinations, a recent Kaiser Family Foundation study found.
The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, the fourth coronavirus stimulus package, recently passed in the House and is under consideration in the Senate. It proposed extending the additional unemployment compensation through to the end of the year.
In light of the pending legislation, the study looked at the impacts of Medicaid expansion on healthcare coverage in four different scenarios. It observed the current eligibility of vulnerable workers in Medicaid expansion and nonexpansion states. Then, the study compared this to three scenarios in which workers received:
- State income only without federal income
- Federal unemployment compensation through the end of 2020
- Both state and federal unemployment compensation and these were not included in the income eligibility calculation
CURRENT LAW: 16 WEEKS OF FEDERAL ADDITIONAL INCOME INCLUDED IN ELIGIBILITY
At present, vulnerable workers who become unemployed can receive $600 in additional federal income for 16 weeks. This federal unemployment compensation is included in income eligibility determinations for ACA marketplace eligibility but not for Medicaid and CHIP eligibility.
“Eligibility for assistance of any kind is not substantially different between expansion and nonexpansion states when all the cash assistance available is received,” the researchers stated.
However, workers in expansion states are seven times more likely to be eligible for Medicaid, the researchers found. This is a critical metric because Medicaid usually has limited additional out-of-pocket healthcare spending for beneficiaries, as opposed to health plans on the ACA federal or state health insurance marketplace. This would make healthcare more affordable for Medicaid-eligible workers in Medicaid expansion states.
In both Medicaid expansion and nonexpansion states, under the current law, a similar percentage of vulnerable workers are not eligible for any federal funding (around 30 percent). The percentage is slightly lower in Medicaid expansion states.
WORKERS RECEIVE ONLY STATE UNEMPLOYMENT COMPENSATION
If workers did not receive any federal assistance, the researchers found that eligibility would not be much different compared to if they did receive federal assistance.
However, when broken down by expansion status, the researchers found that nonexpansion state workers were significantly less likely to be eligible for assistance acquiring healthcare if they did not receive the additional federal compensation.
A little under 60 percent of nonexpansion state workers who did not receive federal compensation would be eligible for assistance, while 70 percent of nonexpansion state workers who did receive federal compensation would be eligible.
“The estimates in this section are also consistent with a policy change that excluded the additional federal compensation from the calculation of marketplace subsidy eligibility,” the researchers noted.
ADDITIONAL FEDERAL INCOME EXTENDED THROUGH 2020, INCLUDED IN ELIGIBILITY
If the additional federal compensation was extended from the current 16 weeks through to the end of 2020 and still included in the income eligibility calculations, the population of workers eligible for subsidies would be lower than if policymakers did not make any changes at all. Eligibility would drop for both expansion and nonexpansion states. However, the decline would be sharper for expansion states.
Expansion states would have no workers that would be eligible for both ACA marketplace premium tax credits and cost-sharing reductions. Instead, its populations would be divided nearly into thirds, with 35 percent eligible for Medicaid, 29 percent eligible for ACA marketplace premium tax credits, and 36 percent not eligible for any assistance.
Nearly half of all nonexpansion state vulnerable workers (47 percent), on the other hand, would be eligible for ACA premium tax credits. Meanwhile, a third would have no assistance available.
NEITHER STATE NOR FEDERAL INCOME INCLUDED IN ELIGIBILITY
If, however, neither state nor federal compensation could be counted in the income eligibility determination, then expansion states would have more workers eligible for federal- or state-funded assistance.
In this case, the Medicaid expansion states would see 83 percent of their workers be eligible for some form of assistance, with 67 percent of their vulnerable populations being eligible for Medicaid. This would leave 17 percent unable to rely on any assistance.
In comparison, nearly half of vulnerable workers in nonexpansion states (48 percent) would not be eligible for any assistance. Those who were eligible would mainly be able to access both ACA marketplace premium tax credits and cost-sharing reductions (23 percent) or ACA marketplace premium tax credits (16 percent). Only 13 percent would be eligible for Medicaid.
The KFF researchers clarified that while extending federal unemployment compensation to the end of the year would reduce eligibility in both expansion and nonexpansion states, it would not hurt workers and workers’ families. Having additional cash on hand and access to large marketplace subsidies and cost-sharing reductions could be very useful to unemployed workers in nonexpansion states.
Extending eligibility for financial assistance above 400 percent FPL would allow workers to both receive extra cash to meet needs like housing and food while also having healthcare coverage security, the researchers added.
“It is undeniable, however, that the Medicaid eligibility gap in the 15 nonexpansion states puts adults in those states at a serious disadvantage in accessing affordable, adequate insurance coverage in times of extreme financial distress,” the researchers found. “Marketplace subsidies fill in a portion of the gap created by those 15 states’ refusal to expand their Medicaid programs, but until financial assistance is extended to those with lower incomes in those states, many of their residents will be left in highly vulnerable situations when medical needs arise.”