Healthcare Coverage Among Minimum Wage Workers in Colorado

Background and Purpose: In November 2016, Colorado voters passed a minimum wage increase that will raise wages across the state to $12/hour by 2020. Previous analysis examined how this wage increase will impact access to public benefits among low-income workers, but did not estimate how many workers might change access to health insurance from Medicaid to the healthcare exchanges established through the Affordable Care Act (ACA). The status of the ACA—and the Medicaid expansion included in that law—has remained volatile at the federal level, with frequent attempts to repeal the law and to reform Medicaid. In that context, it is critically important to understand exactly how low wage workers might be impacted by the intersecting dynamics of increasing minimum wages and potentially contracting eligibility for public or subsidized private health insurance.

Methods: Using 2017 eligibility levels for Medicaid and subsidized health insurance through the Colorado health insurance marketplace, CO Connect for Health (C4H), we analyzed how eligibility for these programs will change as wages increase over the next three years for various family constellations in Colorado. We calculated the total number of work hours that would put workers in various household sizes (with and without dependent children) above the eligibility threshold for the expanded Medicaid program, and therefore into C4H subsidized health plans—assuming those plans remain available in future years. We then used these numbers to generate estimates of how many workers in Colorado might be directly affected by changes in wages and/or changes to the ACA.

Results: We find that of the roughly 420,000 workers who will receive a raise as minimum wages increase, approximately 140,000 to 180,000 workers will earn more than the 138% FPL Medicaid threshold by 2020, and will shift from Medicaid to C4H plans in that year. This represents approximately 50-61% of the total number of adult workers receiving Medicaid through the ACA expansion. Among single adults without dependent children, employees working more than 28 hours per week, 52 weeks a year, would lose access to Medicaid, whereas a single parent with one dependent child could work up to 38 hours/week while retaining Medicaid for themselves and their children. Similar calculations reveal how many hours that workers in two-adult households and households with more children can work without losing eligibility. 

Conclusions: Access to affordable health insurance remains tenuous for many minimum wage workers. Even if the ACA-subsidized plans are available after 2017, moving from Medicaid to private insurance can come with significant increases in out-of-pocket costs. These costs may put access to healthcare out of reach for many workers—and, of course, the threats increase if the ACA subsidies decrease or are eliminated. Though minimum wage increases are needed across the country, social workers must continue to advocate for corresponding reforms in healthcare policy to ensure that healthcare remains accessible for minimum wage workers.