NO Penalties for Texans in the Coverage Gap who are Uninsured

We told you in a recent post that over half of Americans without health coverage don’t know there is financial help available (discounted premiums, deductibles, co-pays)—even though nearly 9 in 10 enrollees last year got that help! Getting the word out can be tough.

Many Texans are eligible for financial help, but a large number are stuck in the “coverage gap.” These are uninsured adults who don’t qualify for assistance, but have been left behind because Texas has not accepted federal funds to expand Medicaid for these low-wage adults. Without financial help or Medicaid, it’s almost impossible for more than 1 million Texans to afford health insurance and comply with the law.

The Affordable Care Act requires everyone to be insured, and you can face a substantial fine if you don’t have health coverage. A small bit of good news for adults in the coverage gap: they will not face a fine for being uninsured in 2014.

Federal Medicaid authorities are concerned that many Americans left in the coverage gap don’t know that they are exempt from the fine, and that they don’t know how to apply for the exemption. As a result, Medicaid officials just announced a faster way to file for the exemption. Any folks who had incomes under 138 percent of poverty line, who were left out of Medicaid, and who lived in a state that did not expand Medicaid in 2014 will simply be able to report that they met those qualifications when they file 2014 taxes.

There are other possible hardship exemptions, and you can find the full list here.  So far, adults in the coverage gap are the first group to be able to claim the exemption on their taxes without making a special request, at least for 2014.

That’s important, because around 1 million Texas adults are in the coverage gap and could qualify for this hardship exemption. With this new guidance, Texans in the coverage gap will at least have less paperwork to do at tax time.

Next step?  We need our state leaders to accept the federal funds ($6 billion per year left behind, according to state agency estimates) and close the gap, like other red states have already done.

States can accept the funds by expanding traditional Medicaid to more adults (up to 138 percent of the federal poverty level), or with a special “waiver” that several Republican governors have negotiated with the federal Medicaid administration.

Written by Anne Dunkelberg, Center for Public Policy Priorities. Cross-posted from the Better Texas blog.