Q. I’m a legal resident in the United States, but not a citizen. My job doesn’t offer health insurance, and I haven’t been able to afford individual coverage in the past. Does the Affordable Care Act help me?
A. Yes, the ACA makes coverage available to you, and you may be eligible for financial help that can lower the cost of your coverage and the out-of-pocket costs you’ll face if you need medical care.
Coverage, with subsidies based on income, is available to lawfully present U.S. residents
Legal U.S. residents have the same eligibility as citizens to receive subsidies for health insurance purchased in the exchange. Since you don’t have an option for coverage through your employer, you may be eligible to receive a subsidy to help pay your premiums (on any metal-level plan) and reduce the out-of-pocket costs (Silver plan only) for your policy. Eligibility for subsidies is based on your household income.
Although there is normally an upper income threshold of 400% of the poverty level (above which premium subsidies are not available), the American Rescue Plan has eliminated that upper income limit for 2021 and 2022. Instead, households with income above 400% of the federal poverty level can qualify for a premium tax credit if the cost of the benchmark plan would otherwise be more than 8.5% of their household income.
Lawfully-present recent immigrants can get premium subsidies even with income below the poverty level
The ACA also includes a provision to assist lawfully present recent immigrants who have incomes below the poverty level, even though premium subsidies aren’t normally available in that case. Since most legal permanent residents are not eligible for Medicaid until they have been in the U.S. for five years, many lawfully present individuals would have found themselves in a situation where they earned too little (less than the federal poverty level) to qualify for exchange subsidies but were also not eligible for Medicaid – even in states that expanded Medicaid – based on the amount of time they had been in the United States.
So lawmakers included a provision in the ACA that allows recent immigrants with household incomes under 100% of the poverty level to receive exchange subsidies at the level they would if their income was equal to 100% of the poverty level (see page 113).
Ironically, about 2.2 million Americans have ended up in the Medicaid coverage gap, in exactly the sort of scenario that lawmakers worked to prevent for lawfully-present recent immigrants. As the ACA was written, people with income up to 138% of the poverty level were to be eligible for Medicaid, and those with income above that level would be eligible for premium subsidies in the exchange instead (and premium subsidies aren’t available to people with income below the poverty level, unless they’re in the situation described above, for lawfully-present recent immigrants).
But two years after the ACA was enacted, the Supreme Court ruled that states could not be forced to expand Medicaid, and 13 states have not yet accepted federal funding to expand their Medicaid programs. In 12 of those states (all but Wisconsin), there’s a coverage gap: People with income below the poverty level aren’t eligible for premium subsidies, and they’re not eligible for Medicaid either, unless they meet the strict eligibility guidelines that the states impose.
Lawmakers created a special provision to allow for premium subsidies for recent immigrants with income below the poverty level, but they never imagined that Medicaid expansion would become optional and that some states — mostly in the south — would leave their poorest residents with no realistic options for health insurance. So there is no similar provision in the ACA to grant premium subsidies to impoverished Americans who aren’t eligible for Medicaid because their states won’t expand Medicaid.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.