Coverage Disruptions and Transitions Across the ACA’s Medicaid/Marketplace Income Cutoff

Abstract

Background: The Affordable Care Act takes a “patchwork” approach to expanding coverage: Medicaid covers individuals with incomes 138% of the federal poverty level (FPL) in expansion states, while subsidized Marketplace insurance is available to those above this income cutoff. Objective: To characterize the magnitude of churning between Medicaid and Marketplace coverage and to examine the impact of the 138% FPL income cutoff on stability of coverage. Design: We measured the incidence of transitions between Medicaid and Marketplace coverage. Then, we used a differences-in-differences framework to compare insurance churning in Medicaid expansion and non-expansion states, before and after the ACA, among adults with incomes 100–200% of poverty. Participants: Non-elderly adult respondents of the Medical Expenditure Panel Survey 2010–2018 Main Measures: The annual proportion of adults who (1) transitioned between Medicaid and Marketplace coverage; (2) experienced any coverage disruption. Key Results: One million U.S. adults transitioned between Medicaid and Marketplace coverage annually. The 138% FPL cutoff in expansion states was not associated with an increase in insurance churning among individuals with incomes close to the cutoff. Conclusions: Transitions between Medicaid and Marketplace insurance are uncommon—far lower than pre-ACA analyses predicted. The 138% income cutoff does not to contribute significantly to insurance disruptions.