The Affordable Care Act gave 20 million Americans new access to quality health insurance, and guaranteed access to the 135 million more with preexisting conditions who otherwise could have been denied affordable new coverage after losing their jobs. The ACA’s Medicaid expansion covers anyone with income up to 138 percent of the federal poverty line (current income at or below $35,535 for a family of four). The law also provides insurance subsidies through its marketplaces for those with higher incomes — up to 400 percent of the poverty line (up to $103,000 annual income for a family of four) — and the subsidies increase the lower one’s income falls.
Obamacare will significantly soften the blow for many, but coverage gaps remain — many of which, unfortunately, are based on the politics of where someone lives. Those who live in the 37 states (including D.C.) that expanded Medicaid or in the 13 states (including D.C.) that run their own ACA insurance marketplaces—those states have reopened their doors for enrollees, even as the Trump administration refuses to do so for the rest of the marketplaces—will have more options to get affordably insured.
But Congress can address these inequalities in its next covid-19 bill as well as close coverage gaps that put everyone, even those with insurance, at risk. A big gap is the danger that those who are treated for covid-19 — even with insurance — will be asked to make potentially bankrupting cost-sharing payments (the part one covers that the insurer does not — co-pays, coinsurance and deductibles) or receive surprise bills from out-of-network providers that are unpaid by insurance.
More than half of Americans have private health insurance, which many obtain through their employers, who usually subsidize their plans. Many will lose that coverage as unemployment skyrockets. Others purchase insurance on the ACA’s individual insurance marketplaces, but some may be priced out of those markets — even with subsidies — as incomes fall.
Most others are insured by Medicare, the national program for seniors and the disabled, or Medicaid, the joint state-federal program for those with lower incomes. Unfortunately, in 2012, the Supreme Court ordered that the ACA’s Medicaid expansion be optional for the states. Fourteen states still have not expanded, leaving about 2 to 4 million people without an option for affordable insurance now. Altogether, 28 million people remain uninsured — mostly because they never signed up, did not know their options, or are priced out.
People who lose their jobs may have difficulty navigating our complex health-care system — and may also discover gaps that remain. People who live in a state that expanded Medicaid, and who are under the income threshold, can get covered now — it does not matter what you made last month. What matters for Medicaid is current income. But those 2 to 4 million who might otherwise get Medicaid but live in a state that did not expand may be out of luck.
Another option is to purchase insurance through the ACA marketplaces. Insurance marketplaces have only one annual “open enrollment period” for new customers. Luckily, those who previously had insurance that met the ACA’s requirements fall into an exception and can buy insurance on the marketplaces now, although there is substantial paperwork. But everyone else — those who didn’t have insurance before or who had the kind of skimpy plan that does not comply with the law but that President Trump has promoted — desperately need an administrative fix. They need a new special enrollment period to allow people onto the rolls. Otherwise, they cannot get insurance coverage until 2021, unless their incomes fall low enough for Medicaid.
Twelve of the 13 states that run their own ACA marketplaces have opened special enrollment periods for their residents. The insurance industry urged Trump to do the same for the 38 marketplaces the federal government runs. Trump refused, a decision compounded by the fact that all 14 states that have refused to expand Medicaid are in the federal marketplace, which leaves those states’ residents with fewer options.
The Trump administration is litigating in the Supreme Court to wipe Obamacare off the books, which is probably why the president opposes special enrollment; it would increase the ACA’s coverage numbers, making it even harder politically for the court to get rid of it. Instead, Trump has suggested that the $100 billion hospital rescue fund recently enacted by Congress be used to cover covid-19 treatment for uninsured people, which could cost up to $40 billion. That’s a substantial chunk of a fund that hospitals need for other priorities. It also would seem to unfairly divert that rescue money from states that have expanded Medicaid and insurance marketplace enrollment to states that have been less generous.
What’s more, Trump’s idea would cover only covid-19 treatment — it wouldn’t offer the complete health coverage that all of those people need. Why raid the fund when the insurance markets and Medicaid stand ready to offer complete coverage? To be sure, there are some, including many immigrants, who won’t find coverage elsewhere. The hospital fund is an important backstop but it is indefensible as the first-line policy response.
Others might be able to continue the insurance plan from the jobs they lost, with COBRA coverage. But COBRA can be very costly: Enrollees must pay 102 percent of the full cost of coverage, including the employer’s share, and COBRA is difficult to navigate and doesn’t apply to very small employers. The average cost of family coverage for families last year was $20,576, according to the Kaiser Family Foundation, which means that the average cost of a COBRA plan would be about $1,750 a month.
Finally, even those who have, or get, private insurance still face financial risks that could bankrupt them during this pandemic. Congress’s earlier covid-19 legislation waives cost-sharing only for testing, but many people are being evaluated without a test, and the cost-sharing for treatment can be incredibly expensive, even in the thousands of dollars. Patients in seriously affected cities also may be sent — without being consulted — to non-network specialists or hospitals or have to pay ambulance fees, which can result in daunting surprise bills for the balance above the insurance payment.
Congress is working on its fourth covid-19 bill, and it must address these coverage gaps. It should overrule Trump and create a special enrollment period for all ACA marketplaces and increase the subsidies offered. The bill also should incentivize the 14 remaining states to expand Medicaid, by putting it all on the federal government’s tab — that is, without states paying any portion of the costs for a period. And Congress should subsidize COBRA payments for those who qualify and eliminate all surprise bills and cost-sharing for covid-19-related expenses.
There should be bipartisan support for these recommendations — most are already widely shared. Joseph Antos and James Capretta at the conservative American Enterprise Institute have also recommended a special enrollment period and Medicaid expansion in the remaining 14 states.
The pandemic places unprecedented pressure on the health-care system and the economy. It also reveals the inequities that result from certain states, and the president himself, not taking advantage of all levers the ACA has — including Medicaid expansion and allowing marketplace enrollment — to protect Americans during this crisis.