How one grandmother fell into the health insurance gap — and why the Build Back Better plan could help cover Texans like her

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Perla Rosalez, an unemployed grandmother in the Rio Grande Valley, stays awake at night worrying about getting sick and leaving the three grandchildren who are under her care.

The 50-year-old rations both her medications and the doctor visits she needs to manage diabetes, high blood pressure, cholesterol and COVID-19 because she has no health insurance to help pay for them. She skips the expensive specialists and prays she doesn’t have to go back to the emergency room.

Becoming the sole caretaker of her three grandchildren allows both her husband and daughter to work outside of Mercedes, the tiny town near the Texas-Mexico border, where they live. But it also means she can little afford becoming sick.

“I realize I cannot take care of my grandkids if I am on the brink of having a heart attack or stroke,” Rosalez said before acknowledging the added burden that being uninsured brings. “I am stressed out all the time worrying about affording my doctors’ visits and medicine. Where will I get the money to pay the doctor to monitor my health?”

It's a problem Rosalez and about 770,000 Texans who are living in poverty face each day because they cannot qualify for government help to pay for health care insurance.

But a provision of the $1.75 trillion Build Back Better legislation, which is being considered by Congress, would fix that loophole through at least 2025. Rosalez and 2.2 million other Americans in her situation would be eligible for free health insurance plans sold through state-run marketplaces for the first time since they were created by the Affordable Care Act more than a decade ago.

That provision applies only to Texas and 11 other states that refuse to extend health coverage under Medicaid.

The legislation could get final passage in the U.S. House before Thanksgiving, and then it would move to the Senate.

But whether it would truly make Rosalez’s life better is a matter of fierce debate in Texas.

Those who oppose the extended ACA subsidies proposed in the Build Back Better plan say too much focus is on health care insurance, because being insured doesn't guarantee access to more or better care.

Instead, says David Balat, director of the Right on Healthcare initiative at the conservative think tank the Texas Public Policy Foundation, health care costs should be overhauled, top to bottom.

“Health insurance and health care have been conflated so much,” Balat said. “Even those that have insurance in this country … can't get the care they need, or it's so expensive that they don't go and seek treatment that they need.”

The Build Back Better plan would help the more than 700,000 Texans not covered by insurance or Medicaid to pay for health insurance. The plan would steer money that currently goes to hospitals to cover patients who can't afford their medical bills to instead cover those who cannot get health insurance.

That, many argue, is the wrong way to fund the new subsidies because it uses tax dollars to pay for a system that is expensive and inefficient.

"Taking money away from safety-net hospitals and specialty care hospitals hurts communities,” Balat said.

Those who advocate for government-subsidized health coverage for the poor say lack of coverage severely restricts access to health care in a system that is structured around insurance.

When people are uninsured, they say, hospitals and other providers are burdened with the cost of caring for those who can’t pay their bills. They say being uninsured causes unnecessary problems for poor families and costs the state billions in health care and lost wages.

It also keeps them from getting access to preventive care, the kind Rosalez needs, that would help stop health problems before they turn into serious issues, said Elena Marks, president and chief executive officer of the Episcopal Health Foundation, a Houston-based nonprofit that studies the issue.

“We are talking about the cost of health care, but what about that person's life?” Marks said. “Imagine the difference between [detecting] cancer in a regular mammogram, as opposed to after the cancer has progressed to the place where it's evident to you?”

Balat said that health insurance has benefits when it delivers reliable and affordable care from quality providers, not when it costs so much that people can’t afford to use it or when there are so few providers available that they can’t get access.

“Would it be better if everybody had a form of health insurance or health coverage? Sure,” Balat said. “But right now, it simply does not work.”

With an estimated 5 million residents without any health coverage, Texas has more uninsured people than any other state in the nation.

In the gap 

Rosalez falls into a gap between those who can qualify for neither a low-cost insurance plan available through the marketplaces nor Medicaid, the health insurance plan for any state's poorest residents.

Anyone can purchase a plan through the state-run health insurance marketplaces, but the government subsidies to help them pay for it are available only to those earning at least the federal government’s definition of poverty, which is $12,880 per year for an individual or $21,960 for a family of three.

To qualify for that subsidy or a tax credit, a person has to be at or above that income threshold and not have access to government programs like Medicaid or affordable coverage through an employer.

Without those subsidies, insurance plans can run several hundreds of dollars per month.

As far as qualifying for Medicaid, Texas is one of the nation's stingiest. To qualify for Medicaid here, an individual must have a household income that amounts to $140 per month or less. For a family of three, that threshold is just over $300 per month.

That said, Medicaid in Texas is a program mostly for children, disabled adults or legal caretakers and parents of dependent children.

And that’s how Rosalez, as poor as she is, and in spite of caring for three kids, fell into the health insurance coverage gap.

She does not claim the grandchildren as dependents on her taxes, and she does not have a disability, so she cannot qualify for Medicaid.

Her husband’s out-of-state jobs are spotty, temporary and don’t offer workplace coverage plans. The Rosalezes’ income does not push them over the monthly minimum of $1,450 required for her family of two to qualify for marketplace subsidies.

So the two are stuck in the middle, without access to either assistance program.

The Affordable Care Act, when it first passed, required states to expand their Medicaid rolls to include a higher income level and close the gap between Medicaid’s previously lower-income threshold and the higher income levels required for the new marketplace subsidies.

But when the U.S. Supreme Court struck down that requirement, the gap opened up and was never fixed in the law.

Since then, 38 states have opted to expand Medicaid anyway. In those states, a household can earn up to about $2,000 per month for a family of two and still meet the income requirements for Medicaid.

And while raising the income level for Medicaid still wouldn’t help Rosalez, it would cover hundreds of thousands of working Texas parents in near-minimum wage or part-time jobs.

A $15-an-hour job at 30 hours a week, for example, would net $1,800 per month — too much to qualify in Texas, but more than enough to qualify in the states that have expanded their income thresholds for Medicaid.But Texas is among the states that has resisted.

Earlier this year, Texas lawmakers and those in the other nonexpansion states were presented with billions of dollars in federal incentives to make it happen.

A proposed bipartisan bill in the Texas Senate answered that call, but Republican leaders said it smacked of coercion by the Biden administration. The bill never made it out of committee during the regular session of the Legislature this year.

Sidestepping Medicaid expansion

The Build Back Better act is a way around trying to force or coerce Texas and the 11 other nonexpansion states to open their Medicaid programs to allow more people in.

The legislation includes more streamlined enrollment in Medicaid and longer coverage periods for children and new mothers but does not force states to change their income qualifications for Medicaid.

Instead, the legislation makes it easier to qualify for marketplace subsidies for people of all income levels, including extensions of some parts of the American Rescue Plan Act that lowered the cost of insurance plan premiums.

The part that most likely helps Rosalez, who may never qualify for Medicaid in Texas, is the provision allowing people whose income is below the federal poverty line to buy plans with no monthly premiums at all and, in many cases, no deductible.

For Rosalez and her family, that could mean free, comprehensive health care coverage after years of financial hardship and declining health.

For years, Rosalez and her husband worked factory and construction jobs in the Rio Grande Valley. They've endured layoffs and bouts of unemployment. High blood pressure and other health issues have been a problem for Rosalez, even sending her to the hospital in 2019.

Most days, Rosalez is alone at home with the grandkids, the oldest of whom is 10. They are covered by Medicaid, but Rosalez wonders what will become of them if she gets too sick to care for them or if she dies.

These days, she cries a lot. She still struggles to breathe after the entire household contracted COVID-19 in late summer.

And she remains hopeful for a lifeline.

“I need affordable, consistent coverage that will cover my visits to my primary and specialty doctors and my medications,” Rosalez said. “I don’t want to go to bed every night worrying about those things, and that is what is happening now.”

Disclosure: Episcopal Health Foundation and Texas Public Policy Foundation have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.