The Center's work on 'Insurance Coverage' Issues

Ending Subsidies in Marketplace States Would Hurt Diverse Group

January 26, 2015 at 1:31 pm

I recently cited studies from the Urban Institute and RAND Corporation showing that millions more Americans would be uninsured and premiums would rise significantly if the Supreme Court overturns health reform subsidies for people getting coverage through the federal marketplace.  A follow-up Urban report tells us more about the 8.2 million people estimated to lose coverage.  Of those losing subsidies and becoming uninsured:

  • 81 percent are full- or part-time workers;
  • 62 percent live in the South;
  • 61 percent are white, non-Hispanic; and
  • 60 percent have incomes below twice the poverty line.

Importantly, the report points out that “[e]stimates presented in this analysis reflect effects at a point in time, and therefore understate the number of people who would be affected over the course of a year and over multiple years, as individuals’ employment and income fluctuate.”  (Emphasis added.)

One reason why many of the people losing tax credits would end up uninsured is that they don’t have an offer of employer coverage.  Urban estimates that almost two-thirds of those now receiving tax credits have a family member who works at a small firm (fewer than 50 workers) and just over a quarter have a family member who is self-employed.  About 15 percent of those receiving tax credits are between ages 55 and 64, many of them likely early retirees.  These aren’t static categories, of course; people retire, start a business, and change jobs all the time.

Before health reform, many Americans found health coverage expensive or even unavailable — especially older people not yet eligible for Medicare and those with chronic conditions or a history of illness.  It’s critical that the Supreme Court not turn back the clock for millions of people who need help getting coverage, now and in the future.

Medicaid Eligibility for Low-Income Adults Lags Badly in Non-Expansion States

January 22, 2015 at 12:51 pm

The 23 states that haven’t expanded Medicaid as part of health reform have very limited Medicaid eligibility for non-elderly low-income adults, the latest annual survey of state health program officials from Georgetown University’s Center for Children and Families and the Kaiser Family Foundation finds.  That’s a key reason why 4 million uninsured adults remain in a “coverage gap” in non-expansion states, with incomes too high for Medicaid but loo low for subsidies to buy coverage through health reform’s marketplace.

By and large, non-expansion states have kept Medicaid eligibility for low-income adults at the very low income levels in place before health reform took effect.  In the typical non-expansion state, parents only qualify for Medicaid if they have incomes less than 45 percent of the poverty line, or less than $9,000 a year for a family of three, according to the report.  And in nearly every non-expansion state, non-disabled non-elderly adults without children don’t qualify for Medicaid no matter how low their income is.  (See chart.)

By comparison, in the 27 states and the District of Columbia that have expanded Medicaid, non-elderly adults with incomes below 138 percent of the poverty line ($27,000 for a family of three) are eligible for Medicaid.

Most of the 4 million adults in the coverage gap either work or are in a family with a worker, the Kaiser Family Foundation previously reported.  Research shows that for most low-wage workers, their employer either doesn’t offer coverage or doesn’t offer coverage that they can afford.

States that have expanded Medicaid have enjoyed especially large gains in insurance coverage since health reform’s major coverage expansions took effect in January 2014.  For states like Idaho, Utah, and Montana, which are seriously considering expanding Medicaid this year and have very limited Medicaid eligibility, the Medicaid expansion offers a surefire way to achieve similar progress.

Fewer People Having Trouble Paying Medical Bills

January 20, 2015 at 3:55 pm

Fewer people skipped needed health care due to its cost or reported trouble paying medical bills in 2014, a new survey finds.  These improvements, the first since the Commonwealth Fund began asking these questions roughly a decade ago, came as health reform’s major coverage expansions took effect in 2014.

Among the survey’s findings:

  • The number of people ages 19-64 without health insurance showed a statistically significant drop for the first time in the history of the biennial survey, from 36 million in 2012 to 29 million in 2014. The share of the population without insurance fell from 19 to 16 percent.
  • The share of people who failed to get needed health care because of cost fell from 43 percent in 2012 to 36 percent in 2014. This means fewer people said they skipped a recommended test, didn’t fill a prescription, avoided visiting a doctor or clinic when having a health problem, or failed to see a specialist for needed follow-up care.
  • The number of adults who reported problems with medical debt (such as difficulty paying bills) fell from an estimated 75 million in 2012 to 64 million in 2014.  The share of the population reporting these problems fell from 41 to 35 percent.
  • Critics of health reform suggested it would harm young adults, but the opposite appears to be the case. People ages 19-34 made the biggest coverage gains of any age group between 2012 and 2014, with those with incomes below about $47,000 for a family of four seeing the greatest improvement.

As the survey report notes, the gains in health coverage—and the related reductions in people’s financial problems — may partly reflect an improving economy.  However, the coverage gains were far greater in the recovery from the 2007-09 recession, just as health reform took effect, than in the recovery from the previous (2001) recession, our analysis of Centers for Disease Control and Prevention data shows — a sign that health reform’s coverage expansions also played an important role.

Health reform enabled millions of people to obtain more affordable coverage in 2014, through both the Medicaid expansion in many states and the creation of insurance marketplaces that provide federal subsidies to reduce people’s premiums and cost-sharing charges.  Health reform also improved access to coverage by barring health insurers in the individual market from denying coverage or charging higher premiums to people with health problems, and it limited how much insurers could charge older people compared to younger people.

Even before 2014, the law began improving access to coverage, including by requiring most insurance plans to cover adult dependents up to age 26 beginning in 2010.

Millions of Americans still have trouble affording health care, and we need to do more to address that problem.  But, in part due to health reform, the situation is looking up.

More Uninsured, Higher Premiums if Subsidies End in Federal Marketplace

January 12, 2015 at 1:53 pm

Millions more Americans would be uninsured and premiums in the individual (nongroup) market would jump if the Supreme Court disallowed health reform subsidies for people getting coverage through the federal marketplace, new studies from the Urban Institute and RAND Corporation show.

These studies show why it’s critical for the Supreme Court to recognize that health reform provides subsidies in all states.

As we’ve explained, plaintiffs in a case before the Court claim that under the Affordable Care Act (ACA), premium credits to help eligible people afford marketplace coverage are supposed to be available only in states that set up their own marketplaces.

Invalidating the subsidies for people in states that didn’t create their own marketplaces would result in 8.2 million more people uninsured and 35 percent higher premiums for those who get coverage through the individual market, the Urban study finds.  Similarly, RAND finds that 8.0 million more would be uninsured and premiums would rise by 47 percent.

The number of uninsured would jump because many people would find coverage unaffordable without subsides.  Premiums would jump because younger and healthier people would be especially likely to do without coverage, leaving those who continued to buy coverage older and less healthy, on average — and thus costlier to cover.

Both studies show that premiums would rise for everyone in the individual market, including those who buy coverage outside the federal marketplace.  That’s because health reform requires insurers to base their premiums on a single risk pool for all coverage they offer, both inside and outside the marketplace.

These price increases would have a significant impact, even on people with incomes too high to qualify for subsidies.  The number of people with incomes above 400 percent of the poverty line — the maximum level to qualify for a subsidy — buying coverage through the federal marketplace would fall by 42 percent, Urban estimates.

Of course, the impact on lower-income people would be even greater, since they would face higher premiums plus the loss of subsidies (and have more limited budgets to start with).  Fully 91 percent of people with incomes below 200 percent of the poverty line would leave the federal marketplace, according to Urban.

Adults’ Uninsured Rate Falls Further, Reflecting Big Gains Under Health Reform

January 8, 2015 at 4:26 pm

The share of adults without health insurance fell again to 12.9 percent in the fourth quarter of 2014, new survey results from Gallup and Healthways show.  This is down from 13.4 percent in the previous quarter and 17.1 percent in the fourth quarter of 2013, before health reform’s major coverage expansions — through Medicaid and subsidized marketplace coverage — took effect in January 2014.  (See chart.)  It’s also the lowest uninsured rate among adults since Gallup started collecting the survey data in 2008.

The uninsured rate fell sharply among all groups of adults in 2014, but some groups saw particularly large coverage gains.  For example, the share of African Americans without health insurance fell by a third, from 20.9 percent to 13.9 percent.  Likewise, young adults’ (ages 18 to 25) uninsured rate fell by nearly a third, from 23.5 percent to 17.4 percent.

Coverage gains among Hispanics were smaller, likely reflecting continuing outreach and enrollment challenges for that group.  Hispanics’ uninsured rate fell from 38.7 percent to 32.4 percent.

The new Gallup data are fully consistent with other independent surveys and federal government survey data showing significant coverage gains in 2014.