Fact Checked

How Five Million Americans Got Trapped In the Coverage Gap

The Affordable Care Act (ACA), more commonly known as Obamacare, has gradually taken effect over the past few years.

In October, 2013, the government launched their healthcare website at healthcare.gov so now Americans can shop there for health insurance. Many people can find low-cost health plans through the website, but a change in the law in 2012 created a coverage gap that’s leaving many people still unable to afford insurance.

Going without insurance can be particularly difficult for people who rely on prescription medications to stay healthy.

The ACA originally included a mandate requiring every American household to have some kind of health insurance, be it through an employer, private insurance, Medicare or Medicaid. The law also included provisions to help people with the cost of healthcare.

Individuals or families in middle class income brackets could apply through the government’s health exchange website and receive financial aid in the form of a tax credit that can be automatically attached to their monthly insurance premium. People in lower income brackets who did not qualify for the tax credit would be covered by their state’s Medicaid plan. To ensure this, the original Obamacare law, as passed, required that all 50 states expand Medicaid as necessary to make sure that everyone who didn’t qualify for the tax credit was covered.

The coverage gap that now exists was created when the Supreme Court decided the fate of Obamacare in the summer of 2012. While the Court upheld most parts of the law, it decided that individual states could opt out of Medicaid expansion. As a result, about half of the states’ governors chose not to expand Medicaid. In those states, the coverage gap exists. Uninsured people who don’t have enough income to qualify for the tax credit but have too much income to qualify for Medicaid will either have to continue being uninsured, or pay full price for health coverage. In states that participated in Medicaid expansion, all middle and lower income individuals and families should be covered.

People who find themselves in the coverage cap are exempt from the mandate that requires a health plan for everyone. If they cannot afford health insurance, they aren’t required to purchase it and will not be fined. However, being uninsured can mean high costs when health problems arise, and necessary medications can sometimes be difficult to afford.

The health exchange web site suggests that people in the gap could seek medical care at free or low-cost clinics and apply for free prescription drug cards that can be used at pharmacies for savings on prescription medications.