Texas Health Coverage and the Affordable Care Act: A Comprehensive Overview
The ACA expanded health insurance coverage to millions of Americans, including low-income people. It also changed how the federal government provides for affordable coverage.
In addition, the ACA introduced subsidies to help lower-income individuals purchase affordable health insurance on the ACA Marketplace. It also expanded Medicaid and created protections for people with pre-existing conditions.
Texas is the state with the highest uninsured population in the nation. Whether that is measured in numbers or as a percentage of the population, the number of people without health insurance in Texas is larger than in any other state.
That is why it is so important to ensure that all Texans have access to quality health care. And that is why we need to continue to work to make the ACA Marketplace more affordable and expand Medicaid coverage.
We also need to look at how education, income and citizenship status impact health insurance coverage. For example, poor adults are much more likely to be uninsured than those making more money. In addition, low-income families have a tougher time buying insurance on the Marketplace than those with higher incomes. Lastly, undocumented immigrants are nearly three times as likely to be uninsured as US native citizens.
Under the Affordable Care Act, Texas has the option to extend Medicaid eligibility to adults making less than 133 percent of the federal poverty line. This would cover about 1.4 million uninsured Texans, according to a February Kaiser Family Foundation fact sheet.
The state could also receive around $5.4 billion from the federal government in funding for new enrollees, a study by researchers at the Bush School of Government & Public Service at Texas A&M University found. However, the study does not account for multiplier effects — how this income could influence spending and income in other parts of the economy.
That could change if Republican leaders in Texas were to get behind expansion like Phil Berger did in North Carolina, where he overcame years of opposition to expand his state’s Medicaid program. Whether Abbott or Patrick will change their minds is another question, but the evidence is clear that most people in this red state support expanding enrollment.
Subsidies for Individuals
For individuals covered by Texas Health Coverage and the Affordable Care Act, subsidies are available to reduce the cost of premiums and out-of-pocket costs. These include premium tax credits (PTCs) and cost sharing reductions (CSRs).
The subsidies are based on a household’s income. The federal government sets yearly guidelines for income levels that determine eligibility for subsidies.
Families with higher incomes pay a larger percentage of their income toward premiums, while families with lower incomes pay less. The ACA eliminates the so-called “subsidy cliff,” allowing households with incomes below 250% of the poverty level to pay no more than 8.5% of their income on premiums.
For individuals with low-incomes, subsidy improvements are a critical step to increase coverage and lower the cost of insurance. Several legislative proposals would significantly improve the ACA’s subsidies. These improvements could extend coverage to several million Americans at a cost of hundreds of billions of dollars over ten years.
The ACA provides many different coverage options for Texas consumers, including subsidized private plans purchased in the marketplaces and Medicaid expansion. The law also imposes a financial penalty on people who do not have insurance.
While some individuals may pay high premiums, they can still qualify for cost-sharing reductions and premium tax credits that help LOWER their total costs. These savings opportunities can help make health coverage more affordable for middle-income and lower-income families.
Individuals who earn below 138 percent of the federal poverty level (about $16,000 for an individual or $32,000 for a family of four) can enroll in Medicaid if their income qualifies them for the program. Alternatively, they can purchase a subsidized private plan through the federal Marketplace.
Regardless of where they buy their insurance, all Texans must be offered the same essential health benefits, as required by federal law. These essential health benefits benchmark plans include the following: