Bridging the Gap: How to establish a path toward 100 percent health coverage

In August 2022, the U.S. Department of Health and Human Services (HHS) released a new report showing that in early 2022 the national uninsured rate reached an all-time low of 8 percent, half the rate (16 percent) in 2010 when the landmark Patient Protection and Affordable Care Act (ACA) became law.

The reduction is a feat worthy of celebrating because, in the United States, health insurance coverage is essentially a prerequisite to access to health care. While Emergency Medical Treatment & Labor Act (EMTALA) stipulates that most hospitals treat all patients requiring emergency care, the law does not apply to doctors’ offices or clinics. Therefore, uninsured individuals do not have access to preventive or primary care.

So how did we get here? More importantly, what will it take to go further? Can we achieve 100 percent coverage?

The ACA included several historic provisions that expanded coverage options for low-income people. First and foremost, it expanded Medicaid coverage to nearly all adults with incomes up to 138 percent of the Federal Poverty Level (FPL)[1]. It also gave states an enhanced federal matching rate (FMAP) for their expansion populations.

Additionally, the ACA instituted premium tax credits that help people and small businesses purchase health insurance who otherwise would not have it. Premium credits cap contributions as a share of income for families between 100 and 400 percent of the FPL.

[1] $17,774 for an individual in 2021

In 2021, the American Rescue Plan Act (ARPA) increased the size of the credits and expanded their eligibility criteria for the 2021 coverage year. Under ARPA’s more generous premium tax credits, people with incomes below 150 percent of the FPL became eligible for zero-premium plans. Subsequently, the Inflation Reduction Act extended these enhancements through the end of the 2025 coverage year.

While these advancements are credited for achieving the landmark 8 percent uninsured rate, there are notable outliers. Texas has the nation’s highest uninsured rate, 18.4 percent, and Georgia, Florida, and Mississippi are all above 13 percent. There are also racial disparities: the uninsured rate for Black Americans (12 percent) is still higher than that for White Americans (9 percent), according to a 2022 report from the Assistant Secretary for Planning and Evaluation (ASPE).

This disparity can be attributed partly to the Supreme Court’s decision on the National Federation of Independent Business et al. v. Sebelius. The ruling upheld many provisions of the ACA but restricted the federal government’s ability to withhold federal Medicaid funds if a state elects not to institute the expansion, effectively giving states a choice of whether to expand coverage.

The ASPE report shows that states that have not expanded Medicaid have the highest percentage of uninsured children and adults who are Black. If the 12 remaining states (Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming) were to expand Medicaid, an estimated 957,000 Black Americans without insurance would become eligible for Medicaid coverage.

The Commonwealth Fund examined five policy options that could continue to make coverage more accessible and affordable.

1. Fill the Medicaid gap in the non-expansion states by making marketplace premium subsidies available to most individuals with incomes above traditional Medicaid eligibility levels and below 100 percent of poverty. Because of the large gap between traditional Medicaid eligibility levels and 100 percent of FPL, many uninsured adults could gain coverage if the gap were filled.
2. Reduce the employer affordability threshold to 8.5 percent so more individuals could enroll in a marketplace plan.
3. Add a $10 billion reinsurance fund to cover the cost of medical expenditures above a certain threshold, thus reducing risk for insurers and making nongroup insurance more affordable for people in all states who are ineligible for subsidies. Some states have used 1332 waivers to implement reinsurance.
4. Increase the federal Medicaid matching rate for the expansion population to 100 percent. This may serve as an additional incentive to the non-expansion states.
5. Increase and expand cost-sharing subsidies, also known as cost-sharing reductions (CSRs), for subsidized ACA plans for low-income people.

The Biden administration is attempting to support people obtain coverage through the marketplace by dramatically increasing funding for navigators – individuals who help consumers and small employers browse and select health coverage, prepare applications to establish eligibility for financial aid, and refer consumers to assistance programs if needed. In August 2022, the Centers for Medicare & Medicaid Services (CMS) announced $98.9 million in grant awards to navigator organizations that help connect patients to coverage, including those who need to transition from Medicaid to marketplace plans when the COVID-19 Public Health Emergency (PHE) ends.

THS will be watching a few anticipated developments in the coming months. One is how the end of the PHE will impact coverage. Currently, states have suspended Medicaid redeterminations and cannot disenroll anyone on Medicaid until the end of the PHE, which was recently extended through October 13, 2022. If the PHE is not extended again, up to 14 million people could lose coverage as many states restart eligibility checks.

Another is that the Biden administration has signaled a shift in policy to emphasize 1115 waivers that expand, rather than restrict, Medicaid coverage and access to care. To date, CMS has approved at least 46 waivers to expand eligibility and enrollment, and 29 waivers are pending approval, including some in non-expansion states.

Ultimately, to reach 100 percent coverage, we need to find a way to incentivize the non-expansion states to change course. Most states have found that Medicaid expansion has a negligible impact on state budgets or even results in net savings. There is also evidence that Medicaid expansion improves health outcomes. I hope states that have resisted Medicaid expansion can put aside partisan views and seize opportunities to maximize the marketplaces as essential to reducing health disparities and improving the health of underserved populations.