More than 2 million low-income people — half of them in Florida and Texas — are uninsured because they are stuck in a coverage gap: They earn too much to qualify for Medicaid, but because of a quirk of the Affordable Care Act, they earn too little to qualify for a subsidized ACA marketplace plan.
The problem affects people in 11 states that haven’t expanded Medicaid.
Some of these consumers, however, likely could get financial help to purchase a marketplace health plan. All they have to do is estimate in good faith that in 2023 they will earn at least as much as the federal poverty level, or $13,590 for an individual. That is the minimum income required to qualify for subsidies that help pay the premiums for marketplace plans.
If their 2023 income turns out to fall short of that estimate, they won’t face a financial penalty or have to pay back money to the government as long as the prediction was not made “with an intentional or reckless disregard for the facts,” said Eric Smith, a spokesperson for the IRS.
No one KHN interviewed is advising people stuck in this “coverage gap” to lie on their marketplace applications (which is a crime). But determining whether an income estimate is optimistic or fraudulent is a gray area. Forecasting income exactly is often impossible, particularly for people working part time or running small businesses.
“People need to be honest i …