Medicaid and the Young Invincibles Under the Affordable Care Act: Who Knew? Timely Analysis of Immediate Health Policy Issues November 2013 Lisa Dubay, Genevieve M. Kenney and Elena Zarabozo Summary There has been tremendous policy focus on getting the so- receiving Supplemental Nutrition Assistance Program (SNAP) called “young invincibles” to purchase coverage in the new or Unemployment Insurance (UI) could reach as many as half of health insurance exchanges being built under the Affordable these uninsured young adults. An estimated 4.3 million uninsured Care Act (ACA). While enrolling these uninsured young adults young adults with incomes below 138 percent of the Federal in exchange plans is important, even more uninsured young Poverty Level (FPL) will not be eligible for Medicaid in January adults—5.4 million in total—will be eligible for Medicaid in 2014. Although the young adults who will be eligible for Medicaid of 2014, because they live in states that are not planning on under the ACA are a heterogeneous group, efforts targeted at expanding Medicaid. Most will likely remain uninsured, given the parents of Medicaid-covered children and at households their lack of access to affordable coverage. Introduction Much media and policy attention is moniker, but many have critical physical characteristics and the extent to which currently focused on getting the “young and mental health care needs, especially other government programs could be used invincibles” to purchase coverage in the as they transition from adolescence to to reach and enroll these young adults in new health insurance exchanges that are adulthood. Reproductive health services Medicaid beginning in January of 2014. being built as part of the Affordable Care are particularly important among young With one exception, the estimates presented Act (ACA).1 Much less attention has adults, given that more than 90 percent in the text define Medicaid eligibility based been given to the fact that young adults are sexually active and that they have on state decisions made by September constitute 52 percent of the uninsured who the highest birth rates among those of 30, 2013 as reported by the Centers for could become newly eligible for Medicaid.2 childbearing age.3,4 In addition, relative Medicare and Medicaid Services (CMS). Under the ACA, exchange subsidies will to older adults, young adults, particularly While Michigan is reported as expanding, be available to young adults with incomes those age 19 to 24, are more likely to be the expansion will not take effect until between 138 and 400 percent of the FPL smokers, to be heavy or binge drinkers, April of 2014, so for the purposes of this who do not have access to affordable and to have substance abuse problems.5,6 paper we consider Michigan to be not employer- sponsored insurance (ESI) as They are also more likely than other adults expanding. defined by the statute. Uninsured young to have a mental health disorder or to have adults with incomes below 138 percent a serious mental health disorder and their Data and Methods of the FPL will be eligible for Medicaid mortality rate is more than three times Data for this analysis are from the 7 if they live in one of the states that are that of adolescents. These circumstances March 2011 Annual Supplement on expanding Medicaid under the ACA. If highlight the importance of access to Economic Conditions (ASEC) to the they live in a state that is not expanding preventive and curative care for young Current Population Survey (CPS) and Medicaid, they will only qualify for adults. Moreover, since many young adults represents circumstances in 2010. Young assistance with health insurance coverage who are poor remain poor as they age, adults are defined as those age 19 to 34. under the ACA if they already meet the providing them with access to needed care Medicaid eligibility is determined based eligibility requirements for Medicaid or if may yield some savings in the Medicaid on a comprehensive eligibility simulation 8 they have incomes between 100 and 138 program over time. model that was developed by Dubay and percent of the FPL and do not have access 9 This brief examines the extent to which Cook. The eligibility model includes to affordable ESI. uninsured young adults could be covered estimates of those already eligible for Young adults generally report being in by Medicaid under the ACA and explores Medicaid as well as those who could be 10 excellent or very good health, hence their their demographic and socioeconomic eligible under the ACA. The analysis Urban Institute relies on health insurance coverage edits developed by Lynch et al. (2011) to refine Exhibit 1: Uninsured Young Adults Targeted by Medicaid 11 1 the estimates of coverage status. States and Exchange Subsidies in 2014 Under the ACA are categorized with respect to their Medicaid eligibility policies for January Newly Eligible for Medicaid in Expanding States (2.4 million) 2014 based on information presented on the CMS website that reflects state decisions Currently Eligible for Medicaid (3.0 million) and CMS actions as of September 30, Not Eligible for Medicaid or Subsidies in States Not 12 2013. Estimates of exchange eligibility Expanding Medicaid (MAGI <138 FPL) (3.5 million) are derived from the Urban Institute’s Eligible for Exchange Subsidies in States not Expanding Health Insurance Policy Simulation Model Medicaid (MAGI 100-138 FPL) (0.8 million) model.13,14 Eligible for Exchange Subsidies (MAGI >138% FPL) (2.6 million) The demographic and socioeconomic characteristics that are examined include gender, race/ethnicity, living circumstances, marital status, student status, work status, health status, and the presence of a physical work limitation. Participation by the young adult or their household in the social safety net programs examined here, including receipt of SNAP, Medicaid coverage of a child in the family, and unemployment compensation, are under-reported on the CPS.15 As a result, our estimates of the share of uninsured young adults eligible for Medicaid who are participating in social programs provide a lower bound. The results section also draws on supplemental information to provide insights about Source: Urban Institute analysis of the 2010 Annual Supplement on Economic Conditions to the Current Population Survey. outreach strategies through schools and 1 Note: Medicaid eligibility as of January 2014 is modeled in accordance with information released by employers that might be particularly CMS on September 30, 2013 http://medicaid.gov/AffordableCareAct/Medicaid-Moving-Forward-2014/ Downloads/Medicaid-and-CHIP-Eligibility-Levels-Table.pdf effective for reaching young adults targeted by Medicaid under the ACA. exchange subsidies because their state did adults are age 19 to 24 and 57 percent are Results not expand Medicaid and they do not have age 25 to 34. (Appendix Table 1 shows an “affordable” offer of coverage. Finally, estimates of the characteristics of uninsured Eligibility Under the ACA in 2014. An an estimated 2.6 million uninsured young young adults living in states that have not estimated 5.4 million uninsured young adults with incomes between 138 and 400 committed to expanding Medicaid but who adults age 19 to 34 will be eligible for percent of the FPL will be eligible for could be made eligible if their states decide Medicaid in January 2014. Of these, 2.4 exchange subsidies.17 The remainder of the to expand.) million are new eligibles who live in states paper focuses on the estimated 5.4 million Living and Working Circumstances. that have expanded Medicaid under the uninsured young adults who will be eligible Twenty percent of uninsured young adults ACA and 3.0 million are eligible under for Medicaid January 1, 2014. current rules, but not enrolled, living in who will be eligible for Medicaid in 2014 both states that have and have not adopted Demographic Characteristics. Young are married and 16 percent are married the Medicaid expansion (Exhibit 1). An adults who will be eligible for Medicaid with children; 80 percent are unmarried and 18 additional 4.3 million uninsured young in 2014 are quite diverse along a number 22 percent are unmarried with children. adults could become eligible for Medicaid of dimensions (Exhibit 2). Overall about Not surprisingly, uninsured young adults if their state implemented the Medicaid half are male, 43 percent are white, 17 who would be newly eligible for Medicaid expansion under the ACA. Of this 4.3 percent are black, 31 percent are Hispanic, are less likely than those who are currently million, 3.5 million have incomes below 6 percent are Asian or Pacific Islanders, eligible to be married and to have children. 138 percent of the FPL and will not be and 3 percent are of mixed or other races. Eligible young adults have a wide range of eligible for either Medicaid coverage or Relative to the uninsured young adults living arrangements: 22 percent are living exchange subsidies.16 Another 800,000 who meet the current eligibility criteria with their parents; 11 percent are living have incomes between 100 and 138 for Medicaid, more of the new eligibles with non-parent relatives; 32 percent are percent of the FPL and will be eligible for are white and fewer are Hispanic. Forty- living with their spouse and/or child; 11 three percent of these uninsured young percent are living with a spouse and/or Timely Analysis of Immediate Health Policy Issues 2 child in the home of others; 9 percent are Exhibit 2: Characteristics of Uninsured Young Adults cohabiting; and 14 percent are living alone 1 or with a non-relative. Twenty-one percent Targeted by Medicaid in 2014 Under the ACA of the uninsured young adults who will All Currently Newly Eligible In be eligible for Medicaid are either full- or Eligible Eligible Expanding States part-time students.