What You Need to Know About Closing the Coverage Gap
What is the Coverage Gap? About 1 million uninsured Texans are in the Coverage Gap, meaning they have no affordable health insurance options but would be covered if the state accepted new federal health care funds intended for them. They do not receive health insurance from their employers. They make less than $24,000 for a family four, so they do not qualify for financial assistance on healthcare.gov. They do not qualify for the state’s barebones Medicaid program, which is not currently designed for “able-bodied” working-age adults except for a few parents earning less than $3,600 per year for a family of four. Ninety-six percent of the state’s Medicaid beneficiaries are poor children, seniors, people with disabilities, and pregnant women. (An illustration of the Coverage Gap is available here.)
Who is in the Coverage Gap?
The majority of Texans in the Coverage Gap are working. They cook our food, build our houses, take care of our young children or elderly parents, launch small businesses in our communities, and hold other jobs. Others include college students, people with mental health challenges, parents who are raising their young children while a spouse works, and older Texans who don’t qualify for Medicare yet but are having trouble competing with younger workers for new jobs. (More information on the occupations of Texans in the Coverage Gap is available here.)
How is the federal government helping states close the Coverage Gap?
The federal government has set aside Medicaid funding for 90% of the cost of covering Texans in the Coverage Gap, but state leaders have not accepted the money yet. The federal government will keep the funding if Texas continues to turn it down. The funding is designed to replace the previous federal funding stream that offsets hospitals’ unpaid medical bills for uninsured patients. States can accept the funding and then opt out later if they choose. (More information on the reduction in uncompensated care costs in states that accept the Medicaid funding is available here.)
How can Texas close the Coverage Gap?
Texas could use the funding for a traditional Medicaid expansion. Alternatively, Texas could craft its own plan to use the funding to connect these Texans with an insurance option. A number of other conservative states have developed approaches with co-pays, private insurance plans, and other market-based components. Despite some misconceptions, the Arkansas plan, to name one example, is working well and could serve as a model. (Updated information on the Arkansas model is available here.)
Who supports closing the Coverage Gap?
Twenty-five Texas business groups have called on the Legislature to either expand Medicaid or develop an alternative plan to cover more workers. Doctors, pastors, health clinics, hospitals, a health care task force appointed by then-Governor Perry, and many others Texans have joined them in calling for a solution. (A list of current supporters is available here.)
How would closing the Coverage Gap help uninsured Texas families?
A solution would benefit those Texans in the Coverage Gap and their families by ensuring they have access to cancer treatment, mental health care, preventive care that saves lives and money, and other care that is not available in the ER or in the patchwork of other services for the uninsured. More women would be able to access health care during the critical pre-pregnancy time, leading to healthier pregnancies and children. More families would avoid bankruptcy and financial instability resulting from health problems. (More information about the lack of access to health care for the uninsured is available here.)
How would closing the Coverage Gap help the Texas economy?
A solution would also provide significant economic benefits. It would create up to 230,000 jobs over three years, according to an estimate by former Deputy Texas Comptroller Billy Hamilton. It would help small businesses that can’t afford to offer insurance or have their employees out sick. It would reduce the pressure on property taxes and insurance premiums to cover unpaid hospital bills for the uninsured. It would help hospitals stay in business and avoid cutting jobs. (An illustration of the benefits is available here and information on the benefits for each county is available here.)