One Million Low-Income Texans Fall Into ACA ‘Coverage Gap,’ With No Help in Sight

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“Sorry. I’m sorry. Sorry.”

This is Ruben Garza’s refrain when it comes to the Affordable Care Act (ACA) rollout in South Texas, where he works as a community organizer with the Texas Organizing Project (TOP), educating Texans in the Rio Grande Valley about the benefits of the new federal health-care law.

The trouble is, he says, those benefits don’t apply to two-thirds of the residents in Hidalgo County, where most people are not poor enough to enroll in Texas’ Medicaid program but also do not make enough to qualify for subsidized insurance through the ACA. Because Texas continues to refuse funds for a federal Medicaid expansion that would have paid to cover those Texans who make up to 100 percent of the federal poverty level, the point at which federal subsidies are available for health insurance coverage, an estimated one million Texans are ineligible both for Medicaid and a federal insurance subsidy.

This is the so-called coverage gap. Think of the ACA as a free federal car that states have to drive, but they can opt out of getting one with seat belts. The seat belts are paid for, just as the Medicaid expansion is paid for. But the State of Texas wants the car without seat belts, because state leaders believe seat belts would limit their freedom.

The Medicaid expansion, which would have covered Texans who make up to 138 percent of the federal poverty level, is an integral part of Obamacare’s design, says Anne Dunkelberg, associate director at the Center for Public Policy Priorities.

“The ACA is written with the assumption that the poorest uninsured really need to have a different kind of system,” Dunkelberg told RH Reality Check, “because they can’t afford the kind of cost sharing that a traditional insurance model requires.”

Back in 2012, when Gov. Rick Perry first started making noises about refusing the expansion, public health experts had a hard time believing Perry wouldn’t ultimately take the federal funds, saying it was just too good a deal to pass up.

“If you smooth it out over time, it’s a 90 percent federal match for services for a huge amount of low-income residents, but it’s also for city and state governments, nonprofits, health-care agencies, hospitals,” the University of Chicago’s Dr. Harold Pollack told RH Reality Check in the summer of 2012.

But now the health insurance marketplace is live, and Texas has adamantly refused not only the Medicaid expansion, but a modified so-called Texas Solution to the Medicaid problem that was proposed during the last legislative session by one of its most conservative state lawmakers.

In a state that already has some of the most stringent Medicaid eligibility requirements, and where nearly a quarter of residents are uninsured (Texas has the highest rate of uninsured adults in the entire country), Texans are swiftly falling into the coverage gap.

In numbers, this means families of three who make more than about $3,700 per year but less than about $20,000 per year will see no change in their ability to afford health insurance under Obamacare. And Texas won’t enroll any childless adults under 65 in Medicaid, period. That means any individual making less than about $11,500 per year qualifies neither for Medicaid nor for an ACA insurance subsidy. In fact, the only people who qualify for Medicaid in Texas are poor children, pregnant people, some disabled adults, and the state’s very, very poorest parents—parents who make no more than 15 percent of the federal poverty level.

That’s why Garza can only say, “Sorry.”

“People are confused,” said Garza. “When you explain why they don’t qualify, they say, ‘Wait a minute, I’m too poor to get help? That doesn’t make sense.'”

And indeed, financially it doesn’t make sense. From a public health policy perspective, it also doesn’t make sense. But politically, it makes plenty of sense to Gov. Perry, who has railed against what he calls the “Orweillian” ACA in an effort to cast himself as a right-wing hero fighting against the evils of federal government. If that means one million Texans continue to live without health insurance so Perry can tell his most conservative supporters he did all he could to keep the tide of Obamacare at bay, that is a price Perry and his fellow Republicans are willing to pay.

Who are the Texans who fall into the coverage gap? They’re folks who Anne Dunkelberg describes as “a lot of the people you think of as the real backbone of working Texas.”

Broadly, they are the people who take care of our grandparents in nursing homes. They are the restaurant cooks, servers, and dishwashers who make date nights possible. They are the construction workers who frame and roof our new homes. They are the housekeepers who pick up after us in hotel rooms. They are the people trying to make sense of our 2 a.m. burger orders at the drive-thru window. They drive us to work every morning on public buses, and they are the folks who ring up our new jeans at the mall. And an estimated 66,000 are veterans who have served in the United States armed forces.

They work the longest, hardest hours at some of the most physically demanding, and economically unrewarding, jobs in the state. They are people like 22-year-old Rio Grande Valley resident Ash Estevan, who lives in Pharr, a small town close to Reynosa, Mexico, where she says she’s been going for health care since she became uninsured at age 19.

Unable to get health insurance through her retail job, working overnights stocking merchandise, but too poor to qualify for an Obamacare insurance subsidy, Estevan told RH Reality Check that “every day is pretty much just a gamble” when it comes to health care. She lives at home with her parents, who she says cannot afford to include their entire family on the “ridiculously expensive” health insurance offered through their employers.

Texas families, especially single-parent households, are the ones who will be hardest hit by the coverage gap.

Imagine a 22-year-old single person with no dependents, working full-time, 52 weeks each year, for minimum wage in Texas. That person earns $15,080 before taxes, putting her at 131 percent of the federal poverty level. According to the Kaiser Family Foundation’s subsidy calculator, that person is eligible for bronze-level ACA coverage at no cost. Their health insurance, after a subsidy, would be free.

But again, Texas Medicaid will only cover certain adults, specifically some disabled people, pregnant women, and, only if they make no more than 15 percent of the federal poverty level, parents. To put that into perspective: A single adult raising one child in Texas who makes more than about $2,400 per year makes too much money to qualify for Medicaid in the state. That person’s child is covered through the Medicaid Children’s Health Insurance Program, but the parent is not.

So if a single-parent Texan making $2,500 per year seeks health insurance in the new marketplace, her yearly insurance premium is estimated to be $1,250, because she is not eligible for a government subsidy to purchase insurance. That’s almost exactly half of that person’s entire yearly income. And if that same single parent works full-time for minimum wage, she’ll make $15,080, but her premium will still be $1,250, for which she would receive no federal subsidy to purchase the same insurance that her single counterpart gets for free.

When coupled with the fact that conservative Texas lawmakers have spent the last two legislative sessions dramatically reducing access to affordable contraception and reproductive health care, the inequality that is manifest in the coverage gap becomes even more stark. Not only have Texas legislators put some of the state’s poorest parents in a terrible position—asking them to decide whether they’d like to spend $1,250 on health insurance or, say, diapers, day care, groceries, or rent—they have also explicitly and intentionally removed the best, most cost-saving, and efficient ways for Texans to be able to decide when and whether to have children by slashing family planning funds and cutting Planned Parenthood out of the hugely successful, and now effectively defunct, Medicaid Women’s Health Program.

“The single best way for us to ensure access to family planning for Texas women at all income levels is to make sure that they have comprehensive health care,” said Anne Dunkleberg at CPPP. “And the current Texas system doesn’t do enough to help women safely space their children.”

Down in the Rio Grande Valley, Ash Estevan says it’s the “disappointment, above all, that just eats at [her],” when she thinks about how simple it would be for Texas to take the Medicaid expansion. But she says state lawmakers don’t listen to people like her.

“It doesn’t matter how many emails you write, how many rallies you go to,” she said. “At the end of the day, when you see you’re not being helped by your government, it’s a big letdown.”

If Rick Perry continues to dig his boot heels in against Obamacare, refusing the $7 billion or so in federal funds that are on the table for his state, the poorest uninsured Texans will continue to do whatever they can do to get health care, whenever they can afford it. For Ash Estevan, that’ll mean crossing the border to see her doctor in Reynosa. For others, that will mean going to the emergency room, whether or not they can pay the bills, and costs will be passed on to Texas taxpayers.

Ruben Garza says many people in his community already feel forgotten by the rest of their sprawling state, especially by lawmakers in Austin, the state capital. The coverage gap is just the latest, most tangible manifestation of the ways in which Texas’ poorest citizens are pushed aside. Garza saw them frequently at workshops led by the Texas Organizing Project about the ACA.

“It’s something that is challenging for me as an organizer, knowing that most of the people I come into contact with aren’t going to qualify for these subsidies,” said Garza.

They ask themselves, says Garza, “Why did I show up to that workshop?” But because he says “there’s no logic” in Texas’ refusal of the Medicaid expansion, only politics at play, there’s little he can tell them.

“It’s just such an emotional toll that people go through, it’s really overwhelming,” he said. “In the state with the most demonstrated need, it really puts in perspective how massive this problem is. There’s nothing coming their way.”

But part of what the TOP does is voter education, and a change in top-level state leadership may be the only way to get the Medicaid expansion, or some similar “Texas Solution,” happening on the ground in the state. Ash Estevan says she’s counting on it and intends to volunteer with TOP in the future.

“It’s like a real ugly punch to your gut,” says Estevan, when state leaders “shrug their shoulders and be like, ‘Well, we don’t want [the Medicaid expansion].’ It’s not a matter of if they want it or not. It’s what the people need.”

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  • Cade DeBois

    I’m one. One million sounds WAY, WAY too conservative of an estimate.

    It’s so easy to blame the TX GOP for being the TX GOP, but I blame Obama & the Dems for not fighting for single payer, to make sure such gaps wouldn’t happen. They gave to state the option to opt out–and of course TX would. They let it happen. This is why I have been opposed to the ACA from the start. I knew this would happen and you know who shrugged their shoulders every time I have brough it up? Obama/Dem supporters. As far as I’m concerned they’re the ones who don’t give a crap. And damn have they resented people like me pointing out the failings of this bill, saying it’s not enough. But they’re just “But young people will get converage. More women will get coverage, Blah blah blah.” Which is great, but I honestly don’t think anyone, liberal or conservative, gives a damn about people like me who are left out in the cold…unless of course, they can some how use our situation to make the other party look bad.

    • John H

      As a radical Leftist, I was also very much opposed to the Heritage Foundation’s limited privatized health insurance voucher program (and even more opposed to its disingenuous billing as “Universal Health Care”) now called the ACA or Obamacare. I wanted something that would actually provide everyone access to health care (personal preference was a system of public hospitals and clinics, but single payer insurance would have been okay) and preferably not funnel public money to a private scam enterprise (private insurance). I can’t even begin to count how many fights I’ve had with Democrats and other supposed Liberals over the atrocious ACA. This is what we get when we have 2 Right-wing parties and political identity is more important to most voters than actual policy outcomes.

  • auntbec

    I am one in that million. My grown children (2), my three adult siblings (3), and their children (2 over 18) are also in that million. I sympathize completely with Cade. As much as I also blame the Dems and the president for this law not going far enough…seriously, the Republican hot bed of idiots in this state could care less if the whole lot of us put ourselves out on a train track and let the train come. The “majority” in this state are the most ignorant, selfish, bigoted, hypocritical (read male, pale, frail, and stale) legislators of our time. I fling emotionally between rage and sadness living here.
    Having worked in abortion care in this state, I can tell you first hand, you do not want to live in Texas if you can avoid it. Although I’ve been told Texas is where I should want to work because of the needs in the state, I can’t afford to. I am over 50, have had no health insurance for 15 years, and have a pre-existing condition, minor, but pre-existing nevertheless. I think it’s time I looked to a state where they actually care about their residents.

  • John H

    My state of Wisconsin is facing a similar issue, as our asshat governor has rejected money for medicaid expansion as well. The proximate fault definitely lies with the Right-wing governors. That said, the fact that the ACA allowed for this problem at all is just one of its many, many flaws. Single-payer insurance would not run into issues of a coverage gap, nor would a public medical system.

  • freonpsandoz

    So, find out what the minimum income for the ACA subsidy is, and put that down on the application. I have never heard of anyone ever being punished for overestimating his or her income. All the Administration would have to do is agree to allow the subsidy for anyone whose income falls short at the end of the tax year. That shouldn’t require new legislation, just an IRS decision.

  • iamthetruther8

    That is why I am forced to tell people who asked for my help to understand ACA, to move to the other 36 (?) states that have expanded Medicaid, like Nevada, California, New York and the rest.

  • freonpsandoz

    I think the coverage gap is a deal-killing problem everywhere, not just in states that failed to expand Medicaid. Covered California tells me that people making less than a certain amount (about $21,000 for a couple) are expected to be eligible for Medicaid, are therefore ineligible for ANY subsidy for plans on the exchange, and have to pay the full amount (over $1100/mo in my case) if they buy insurance through the exchange. Medicaid, however, has additional rules for eligibility. Unless the rules have changed, most personal assets, including retirement plans, cannot exceed $3000 in California. It appears that many, if not most, people past middle age who do not make enough money to qualify for exchange subsidies will have too much money in assets to qualify for Medicaid and will therefore receive NO healthcare assistance whatsoever!