HUGE! Washington State seeks to correct one of the most absurd shortcomings of the ACA

One of the most inane restrictions of the ACA in my view, as I noted in my "If I Ran the Zoo" wish list back in 2017, is that it doesn't allow undocumented immigrants to enroll in ACA marketplace health plans ("Qualified Health Plans" or QHPs).

I don't just mean that they aren't eligible for federal financial subsidies--that's a prohibition which I can at least understand, even if I don't agree with it. I mean that they aren't allowed to enroll in ACA exchange-based QHPs even at full price, as noted in Section 1312(f)(3):

(3) Access limited to lawful residents.--If an individual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified individual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange.

Again, this doesn't just mean that they can't get federal financial help; it means they can't enroll via ACA exchanges at all:

Undocumented immigrants aren’t eligible to buy Marketplace health coverage, or for premium tax credits and other savings on Marketplace plans. But they may apply for coverage on behalf of documented individuals.

On the surface, this may not sound like that big of a deal--after all, most ACA individual market policies (QHPs) are also available off-exchange (directly via the health insurance carriers or via private brokers). In some cases these are identical to the on-exchange plan in terms of coverage, provider network, formulary, co-pays and so forth; in other cases there are slight variants. ACA-compliant off-exchange plans are still regulated exactly like on-exchange plans (no annual/lifetime benefit caps; the same maximum out-of-pocket costs; and so forth).

While off-exchange enrollment data is a lot harder to pin down than on-exchange enrollment, last fall I estimated that there were somewhere between 2.3 - 3.0 million Americans enrolled in off-exchange ACA-compliant individual market policies.

For the most part, the only difference between on-exchange and off-exchange plans is that you have to enroll on-exchange in order to be eligible for federal ACA premium tax credits and/or cost sharing reduction assistance...and since undocumented immigrants aren't eligible for those anyway, you might wonder why there'd be any advantage to them enrolling on-exchange?

Well, there's actually several reasons:

• To avoid marketing/eligibility confusion: Every fall during the annual Open Enrollment Period, both the federal and state-based ACA exchanges launch big marketing/awareness campaigns urging Americans to visit HealthCare.Gov (or their state exchange) and #GetCovered. If you're an undocumented immigrant, you may do just that, only to discover that you're not eligible to enroll at any price, which no doubt confuses, upsets and discourages people. This may even lead them not to bother trying to enroll in an off-exchange ACA plan since they may falsely assume it means they aren't eligible to enroll in those either.

• To avoid confusion re. mixed-status households: Louise Norris goes into the healthcare coverage options for undocumented immigrants in detail and as you can see, some situations could get pretty confusing:

It’s important to understand that if you’re lawfully present, you can enroll in a plan through the exchange even if some members of your family are not lawfully present. Family members who aren’t applying for coverage are not asked for details about their immigration status. And HealthCare.gov clarifies that immigration details you provide to the exchange during your enrollment and verification process are not shared with any immigration authorities.

• To be eligible for state-based financial help: While the ACA prohibits federal ACA financial subsidies from being provided to undocumented immigrants, some states may choose to do so. This is already the case when it comes to Medicaid: California pays for Medi-Cal coverage for hundreds of thousands of undocumented immigrants themselves without any federal funding.

In short, there's really no logical reason I can think of, even from a "xenophobic/federal fiscal policy" POV, to prohibit undocumented immigrants from at least enrolling in on-exchange ACA plans (as long as they aren't receiving federal financial help to do so).

That brings me to the main point of this entry: Washington State, which operates their own ACA exchange, just submitted an ACA Section 1332 Waiver Application which would allow exactly this:

Washington state seeks federal approval to expand health insurance to previously uninsured

• State request will bring health coverage to individuals regardless of immigration status

In an effort to expand health coverage options to all residents, Washington state submitted a groundbreaking Section 1332 Waiver Application to the federal government for approval on Friday, May 13. The waiver, if approved, will allow all Washington residents regardless of immigration status to enroll in health and dental coverage through the state marketplace, Washington Healthplanfinder. If approved, the coverage will be available starting in 2024 to the newly eligible Washingtonians.

“Since the introduction of the Affordable Care Act we have been charting a course toward providing health insurance coverage for all Washingtonians,” Gov. Jay Inslee said. “This waiver comes at an important time in our health care journey and its approval would strengthen our ability to provide equitable access for historically marginalized and uninsured populations.”

In 2021, the Washington State Legislature directed the Washington Health Benefit Exchange (Exchange) to explore coverage pathways for Washington residents who do not currently qualify for state or federal coverage options. The Legislature authorized the Exchange to seek a federal Section 1332 waiver for this purpose and required a state-based solution no later than plan year 2024. If approved, the waiver will also allow newly eligible individuals and families to benefit from Cascade Care Savings, the state’s new premium assistance program, that will be starting this fall for plan year 2023.

“There are many in our state who have never had a chance to buy health insurance,” said CEO Pam MacEwan. “This waiver gives those individuals a chance to secure meaningful health coverage for themselves and loved ones. Additionally, this opportunity aligns with other initiatives, including Cascade Care and premium sponsorship programs, to further state efforts to strengthen the individual health insurance market and lower the rate of the uninsured.”

The Exchange conducted a state public comment period to gather feedback on the Section 1332 Waiver Application from March 31–May 2, 2022, and received overwhelming support. Comments in support of the waiver were submitted by 134 organizations representing local and national health insurance carriers; provider associations; community health clinics; consumer and immigrant advocacy organizations; state and local elected officials; and 365 individuals. All submitted public comments are available in the Washington Section 1332 Waiver Application.

Washington is requesting a Section 1332 waiver to ensure that comprehensive coverage and more affordable choices are available to uninsured Washington residents. More than 105,000 Washington state residents — nearly a quarter of the state’s total uninsured population — cannot access health insurance due to federal restrictions related to their immigration status. This adversely impacts individual health outcomes and finances, the health care sector (increasing bad debt and uncompensated care), and Washington’s economy. The waiver will enable individuals to purchase health and dental coverage through Washington Healthplanfinder and leverage state-funded affordability programs that help lower premium costs for all individual market consumers.

Section 1332 Waivers are subject to approval by the U.S. Department of Health and Human Services and the Department of the Treasury (the Departments). For a Section 1332 waiver to be approved, the Departments must determine that the waiver meets designated federal guardrails, to ensure the coverage offered under the waiver is comprehensive, affordable, results in coverage gains, and does not increase the federal deficit.

Next steps: The Departments have up to 45 days to conduct a completeness review and then will also conduct a 30-day federal public comment period. The Exchange has requested approval by Aug. 1, 2022. After the application is deemed complete, the Departments have up to 180 days to respond to the state’s waiver request. For more information about state innovation waivers and the approval process, visit the Centers for Medicare & Medicaid Services’ website.

The most important point here is that, if approved, this would make undocumented immigrants in Washington State not only eligible to enroll in on-exchange plans via the WAHealthPlanFinder, it would also make them eligible for the new Cascade Care Savings Program, which will provide up to $55 million in supplemental state-based premium subsidies for lower-income Washingtonians (i.e., those earning up to 250% of the Federal Poverty Level). $50 million of this fund is apparently allocated for "federally-subsidized" enrollees (i.e., documented residents); another $5 million is allocated for "non-federally subsidized" enrollees (i.e., undocumented immigrants).

The new Cascade Care Savings program will go into effect starting in 2023 for documented enrollees; it won't be expanded to undocumented immigrants until 2024, assuming the 1332 Waiver is approved.

I should note that WA already launched a stripped-down version of this last fall; it was limited to enrollees earning less than 300% FPL (higher than the Cascade Care program will) but was also limited to employees of licensed child-care facilities.

The exact formula for just how much different enrollees would receive in state-based subsidies in the new program doesn't appear to be locked in yet--it will be calculated later this summer based on enrollment projection, 2023 premium rate filings and so forth. Around 102,000 of the ~240,000 WA residents who enrolled in on-exchange QHPs during the 2022 Open Enrollment Period earn less than 250% FPL; $50 million would break out to an average of around $490/year apiece based on that, or $41/month.

I'm sure the actual formula will be based on a sliding scale, but this gives a general idea of how much help we're talking about. It's also important to keep in mind that there's still the looming question of whether or not Congress will extend the enhanced American Rescue Plan subsidies beyond the end of 2022; this could dramatically impact how the Cascade Care Savings funds are allocated.