Maryland on verge of becoming 3rd state to fix one of the most absurd flaws in the ACA

One of the most inane restrictions of the ACA in my view, as I noted in my "If I Ran the Zoo" wish list back in 2017, is that, by default, it doesn't allow undocumented immigrants to enroll in ACA marketplace health plans ("Qualified Health Plans" or QHPs).

I don't just mean that they aren't eligible for federal financial subsidies--that's a prohibition which I can at least understand, even if I don't agree with it. I mean that they aren't allowed to enroll in ACA exchange-based QHPs even at full price, as noted in Section 1312(f)(3):

(3) Access limited to lawful residents.--If an individual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified individual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange.

Again, this doesn't just mean that they can't get federal financial help; it means they can't enroll via ACA exchanges at all:

Undocumented immigrants can't get Marketplace health coverage. They may apply for coverage on behalf of documented individuals.

On the surface, this may not sound like that big of a deal--after all, most ACA individual market policies (QHPs) are also available off-exchange (directly via the health insurance carriers or via private brokers). In some cases these are identical to the on-exchange plan in terms of coverage, provider network, formulary, co-pays and so forth; in other cases there are slight variants. ACA-compliant off-exchange plans are still regulated exactly like on-exchange plans (no annual/lifetime benefit caps; the same maximum out-of-pocket costs; and so forth).

For the most part, the only difference between on-exchange and off-exchange plans is that you have to enroll on-exchange in order to be eligible for federal ACA premium tax credits and/or cost sharing reduction assistance...and since undocumented immigrants aren't eligible for those anyway, you might wonder why there'd be any advantage to them enrolling on-exchange?

Well, there's actually several reasons:

  • To avoid marketing/eligibility confusion: Every fall during the annual Open Enrollment Period, both the federal and state-based ACA exchanges launch big marketing/awareness campaigns urging Americans to visit HealthCare.Gov (or their state exchange) and #GetCovered. If you're an undocumented immigrant, you may do just that, only to discover that you're not eligible to enroll at any price, which no doubt confuses, upsets and discourages people. This may even lead them not to bother trying to enroll in an off-exchange ACA plan since they may falsely assume it means they aren't eligible to enroll in those either.

It’s important to understand that if you’re lawfully present, you can enroll in a plan through the exchange even if some members of your family are not lawfully present. Family members who aren’t applying for coverage are not asked for details about their immigration status. And clarifies that immigration details you provide to the exchange during your enrollment and verification process are not shared with any immigration authorities.

  • To be eligible for state-based financial help: While the ACA prohibits federal ACA financial subsidies from being provided to undocumented immigrants, some states do so.

In short, there's really no logical reason I can think of, even from a "xenophobic/federal fiscal policy" POV, to prohibit undocumented immigrants from at least enrolling in on-exchange ACA plans (as long as they aren't receiving federal financial help to do so).

Since then, thankfully, a few states have stepped up and closed this pointless hole. The first to do so was Washington State, which recently started allowing undocumented immigrants to enroll via the Washington HealthPlan Finder. They've even started providing state-level financial subsidies to some enrollees, although not at nearly as generous a level as for documented/citizen enrollees at similar income levels.

Colorado has also started doing something similar via their OmniSalud program. They took a slightly different path,  however; instead of letting undocumented immigrants enroll directly through Connect for Health Colorado, they have a separate, second website set up specifically for that population to enroll in ACA-compliant individual market policies. Again, there are no federal subsidies involved, but the state is providing financial help to a limited number of those eligible (capped at 11,000 enrollees this year).

That brings me to today's news out of Maryland:

 The Maryland House approved a measure on Friday to enable people to buy health insurance through the state’s health care exchange regardless of their immigration status, with the approval of a federal waiver.

The House voted 101-34 for the bill, which now goes to the Senate, where similar legislation is under consideration.

The measure would require the Maryland Health Benefit Exchange to submit a federal waiver application by July 1, 2025, to implement the program. The waiver is needed because of federal restrictions on undocumented immigrants using the marketplace. Washington state received such a waiver from the Centers for Medicare and Medicaid Services in late 2022. The program in Maryland could start as early as 2026, if a waiver is granted.

...Of the state's remaining uninsured, about 256,000 of them are undocumented immigrants, Pena-Melnyk said. She pointed out that undocumented immigrants who sign up for health insurance through the exchange work in the state, pay taxes in the state and will pay for the plans.

I should note that according to the article, that's 73% of Maryland's total uninsured population.

It's also worth reiterating that (via an earlier article) in Maryland's case, there would be no financial aid included under HB 728:

The legislation does not permit federal or state funding to subsidize the health care coverage of undocumented residents, and federal law prohibits undocumented residents from participating in federal health care plans such as Medicaid.

...“This gives them an opportunity to purchase,” he said. “There’s no subsidies. There’s no cost to the state. This just says to the federal government ‘Give us a waiver to let these hard working individuals, these new Americans, an opportunity to purchase insurance.'”

Here's hoping it passes the MD Senate and becomes law there and in other states soon.

I admit to being a bit surprised that California hasn't already done this. They were actually the first state to begin the process of doing so back during the Obama Administration, but quickly withdrew their waiver request the day Donald Trump was sworn into office, with good reason:

Lawmakers in Sacramento have halted a first-in-the-nation effort by California to expand access to health coverage for immigrants living in the state without legal documents.

At the behest of the state Legislature, Covered California, the state’s insurance exchange, withdrew its request to sell unsubsidized health plans to people who are here illegally. The withdrawal was first reported by the Sacramento Bee.

...But the chances of federal approval dimmed considerably with the election of Donald Trump, who has pledged to deport immigrants in the country without official papers, and to repeal the Affordable Care Act.

...[State Senator Ricardo] Lara said in a written statement that he was withdrawing the plan because he feared the Trump administration might use information gleaned from it for the purpose of deporting undocumented immigrants.

The plan to sell to undocumented immigrants is “the first California casualty of the Trump presidency,” Lara wrote. “I take Trump at his words that anyone is subject to deportation at any time, and California will not be part of a wasteful and inhumane campaign against immigrants who are working hard and playing by the rules.”

Sure enough, the Trump Administration later did attempt to do exactly this via his "Public Charge" rule. However, this was reversed by the Biden Administration in September 2022, which is why I'm surprised they haven't foraged ahead with their own waiver since then...except, of course, that there's always the possibility of Trump getting into office again...