Determining Eligibility for Insurance Affordability Programs

Dates of Project: October 2010 through April 2012

Field of Work: Expanding health insurance coverage under the Affordable Care Act (ACA)

Problem Synopsis: The ACA requires states to use “modified adjusted gross income”—as defined by the IRS—to determine whether nondisabled, nonelderly people qualify for Medicaid, as well as cost-sharing reductions and tax credits for purchasing private insurance. This is a change in federal rules, and will require states to make major adjustments in their policies and information systems.

Synopsis of the Work: Researchers at Mathematica Policy Research analyzed the impact of new rules for determining eligibility for insurance affordability programs as well as government subsidies for private health insurance, on state governments and prospective enrollees.

Key Findings

  • Nearly two-thirds (64.3%) of nonelderly adults with incomes at or below 400 percent of the federal poverty level will become income-eligible for Medicaid or cost-sharing reductions or tax credits for private health insurance.
  • Basing eligibility for Medicaid on current income, but eligibility for cost-sharing reductions and tax credits on annual income, could leave some low-income people without any insurance, either public or private.
  • Determining Medicaid eligibility based on current income will be particularly difficult for applicants—especially the self-employed—who cannot determine their exact income until they file their yearly tax return.

“It is certainly possible that people could fall between the cracks,” said John Czajka, project co-director.

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Under #ACA, nearly 66% of lower-income nonelderly will qualify for Medicaid or aid to buy private health insurance.