Supreme Court Upholds ACA; Preserves Affordable Health Insurance, Prevents “Benefits Cliff” for Workers

Today’s Supreme Court decision upholding Affordable Care Act (ACA) subsidies in all states ensures millions of people will retain access to affordable health insurance coverage. The Supreme Court’s ruling makes it clear that subsidies are available regardless of whether states have chosen to operate their own marketplace or use the federal marketplace, allowing the more than six million people who receive subsidies through the federal marketplace to remain insured.

Subsidies through the federal and state marketplaces allow low- and moderate-income families to receive affordable health insurance, helping them remain healthy and in the workforce, preventing medical crises from leading to insurmountable debts, and providing financial peace of mind.

This morning, CLASP Executive Director Olivia Golden testified before a combined hearing of the House Ways and Means and Agriculture Committees on work incentives in safety-net programs.  Several witnesses raised concerns about potential “cliff effects” that occur when an increase in income results in a loss of benefits. As Dr. Golden testified, the ACA expansion of health insurance through Medicaid and ACA eliminates a significant cliff that families may have previously experienced.

In states that have elected to expand Medicaid, subsidies prevent a benefits cliff when a family’s income rises above the Medicaid eligibility threshold. Parents no longer have to take the enormous risk of going without health insurance if they add hours to a low-wage job and exceed a pre-ACA Medicaid eligibility ceiling that in many states was far below the poverty level.  Instead, with Medicaid coverage at the lowest income levels and then coverage through the health insurance exchange with a sliding scale of subsidy, a working parent can have peace of mind about health care, regardless of income level.  In states that have not elected to expand Medicaid, parents entering employment may still experience a cliff when their earnings exceed the low pre-ACA eligibility levels for Medicaid.  They will then regain health insurance coverage through subsidies if their income climbs above 100 percent of poverty.

The Supreme Court has now upheld two critical components of the Affordable Care Act. Five years after the ACA was passed and nearly two years into full implementation, it is time to shift the dialogue from whether the ACA should be law to making it work as well as possible.  The remaining states should adopt the Medicaid expansion and remove this benefit cliff for parents moving into low-wage work. 

In addition, all states should work to make ACA implementation seamless for low-income workers. One way to do this is to simplify and integrate Medicaid eligibility and enrollment procedures with other work support programs. For example, sharing a family’s income information between SNAP and Medicaid systems reduces the burden on both the applicant and state agencies. As states continue to move forward with ACA implementation, they should take advantage of opportunities, such as the enhanced federal  funding for information system upgrades, to integrate work supports—ensuring workers and families can access the full package of benefits for which they qualify and making it possible for them to succeed while working in low-wage jobs.