A Look at Early ACA Implementation: State and National Medicaid Patterns for Adults in 2014

A Look at Early ACA Implementation: State and National Medicaid Patterns for Adults in 2014ACA Implementation—Monitoring and TrackingSeptember 2016Genevieve M. Kenney, Jennifer Haley, Clare Pan, Victoria Lynch, and Matthew Buettgens 2ACA Implementation—Monitoring and TrackingWith support from the Robert Wood Johnson Foundation (RWJF), the Urban Institute is undertaking a comprehensive monitoring and tracking project to examine the implementation and effects of the Patient Protection and Affordable Care Act of 2010 (ACA). The project began in May 2011 and will take place over several years. The Urban Institute will document changes to the implementation of national health reform to help states, researchers and policymakers learn from the process as it unfolds. Reports that have been prepared as part of this ongoing project can be found at www.rwjf.org and www.healthpolicycenter.org. The quantitative component of the project is producing analyses of the effects of the ACA on coverage, health expenditures, affordability, access and premiums in the states and nationally.INTRODUCTIONThe Affordable Care Act (ACA) included an expansion of Medicaid aimed at reducing uninsurance among poor and near poor adults under age 65. It was anticipated that Medicaid enrollment would increase under the ACA due to both the expansion of eligibility and the greater take-up of Medicaid among already eligible groups because of the ACA’s individual mandate and outreach and enrollment efforts (Kenney et al. 2013). However, the Supreme Court decision of 2012 de facto made the Medicaid expansion optional for states (Rosenbaum and Westmoreland 2012). By mid-2014, 26 states (including the District of Columbia, which for ease of discussion is considered a state in this analysis) had extended Medicaid eligibility to adults below 138 percent of the federal poverty level (FPL), many of whom had not previously qualified for Medicaid coverage (Kaiser Family Foundation 2016). In the remaining states, Medicaid eligibility for adults tended to be much more limited, particularly for adults without dependent children, though changes in rules for determining eligibility under the ACA could affect Medicaid eligibility in those states. Historically, Medicaid eligibility levels for adults have been quite low, and apart from coverage related to disability or pregnancy, Medicaid eligibility has been more expansive for parents living with dependent children than for other adults (Heberlein, Brooks, Alker, et al. 2013; MACPAC 2012).1 Due in part to federal minimum requirements, at least some low-income parents were eligible in every state, and the median threshold for working parents was 61 percent of FPL in 2013. There was considerable variation across states, with eligibility thresholds ranging from below 25 percent of FPL in three states to 200 percent of FPL or higher in four states as a result of federal options available before the ACA (Heberlein et al. 2013). In contrast, because few states provided Medicaid to nondisabled, nonpregnant childless adults regardless of income before the ACA, a higher share of parents than childless adults were eligible for Medicaid (Kenney, Lynch, Haley, and Huntress 2012). Because of state options and waivers, Medicaid eligibility thresholds for parents and childless adults were already higher in the states that expanded in 2014 than in nonexpansion states. For example, for working parents, expansion states had a median eligibility limit of 106 percent of FPL compared with a median of 48 percent of FPL in nonexpansion states. For childless adults, although the median eligibility threshold was zero in both expansion and nonexpansion states, six expansion states had provided comprehensive Medicaid to nonelderly childless adults without disabilities before 2014 (Heberlein, Brooks, Alker, et al. 2013). States that have taken up the ACA’s Medicaid expansion have done so for all nonelderly adults, with the same thresholds and immigration rules for parents and childless adults. The 2014 threshold is at least 138 percent of FPL (133 percent of FPL plus a 5 percent income disregard) in the 26 participating states (because of their pre-ACA levels, thresholds are higher than 138 percent of FPL for parents in Connecticut, the District of Columbia, and Minnesota and for childless adults in the District of Columbia and Minnesota).2 Meanwhile, parents’ eligibility thresholds were below FPL in almost all of the 25 remaining nonexpansion states in 2014, with a median threshold of 47 percent of FPL. Only one nonexpansion state, Wisconsin, offered Medicaid to nondisabled childless adults. Although adults 3ACA Implementation—Monitoring and Trackingin nonexpansion states with incomes between 100 percent and 138 percent of FPL could be eligible for subsidies for marketplace coverage, those with incomes below 100 percent of FPL who are not eligible for Medicaid do not qualify for any public coverage options (Blumberg et al. 2016; Buettg