Kansas State University


Issues in Health Reform

Month: February 2016

Persisting disparities in who is insured

While overall the US is experience decreasing rates of people uninsured, these gains are not shared among the races equally.  Racial disparities that are related to more people of color working in part time and/or lower paying jobs, and in general, increase the rates of poverty among blacks and other nonwhites, are also having an impact on who gets health insurance.

Most of those part time and lower paying jobs do not come with health insurance.  Fortunately, there are now options in the state and federally run Marketplaces where many can purchase health insurance without worrying about pre-existing conditions excluding them.  Also, in many cases, people are eligible to receive substantial financial assistance in paying for premiums (Advance Premium Tax Credits) and the cost-sharing portions of insurance (Cost Sharing Subsidies).

However, in order to qualify for that financial assistance the family income must be above the federal poverty line ($11,880 for an individual; $24,300 for a family of 4).  In the 18 states where Medicaid has expanded to include individuals under 138% of that level, there are options for those who are ineligible to receive financial assistance.  Those individuals are insured through their states’ Medicaid systems.

In the 32 states that have not expanded however, there are no affordable options for insurance.   This is where we observe being poor and without a job that offers health insurance to impact racial minorities the hardest.   (The one exception is Wisconsin that has its own Medicaid coverage outside of the federal Expansion.)  And, as all uninsured people, those without coverage do often use health care, but they access care at inappropriate times (less preventive, more acute and severe care needs), and in inappropriate places (emergency rooms for routine care).  Finding a way to insure this population or provide them with more consistent health care would improve their health outcomes and community outcomes that thrive with a healthy workforce.

This issue is covered in detail in a news article and in a Kansas Health Institute issue brief.

Variation in 2015 Marketplace Plan Selection Rates by Income

Open enrollment in the federal and state Health Insurance Marketplaces is over for the 2016 insurance year but we’re still learning from prior years’ experiences.  The focus of the following issue brief written by RWJ and the Urban Institute  http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2015/rwjf424382 presents March 2015 data (end of Open Enrollment 2) showing:

  • how many estimated people who were eligible for Marketplace coverage actually signed up, and of those,
  • how many were eligible and applied for assistance in paying for premiums, and
  • how many of those in total “effectuated” coverage, that is paid premiums and filled out all necessary paperwork to start the policy coverage.

The data are presented by state, with some data on how people of different income levels behaved in these markets.

The general picture shows that there are many people in all states who are likely missing out on using the Marketplaces for affordable health insurance coverage.  The selection rates…number of people eligible for financial assistance paying for Marketplace plan divided by the total number of people estimated eligible…are still lower than might be expected.  There is also large variation between states as to how many are enrolled, and whether or not it was a state-based exchange, or a state with a Medicaid Expansion, were not necessarily the defining factors.

Some key findings:

  • 24.1 million people were eligible for Marketplace tax credits
  • 10 million, 41%, selected plans but only 8.6 million “effectuated” their coverage for a more accurate enrollment rate of estimated eligibles of 35%.
  • the 13 state based marketplace states had more variation between each other in effectuated plan rates (5-50%) than those in the 37 states using healthcare.gov (18-57%).
    • Florida’s high effectuation rate (57%), the highest of all states, skews the non Medicaid expansion states’ rates when combined.
    • Rates in Minnesota and DC were impacted by special programs they have that cover individuals under 200%FPL.  Over 200%FPL, Minnesota and DC look much as the other states.
  • the higher the income, the less use of the Marketplace. This was true for all states. That is, even with tax credits, out of pocket premium costs for those with higher incomes get increasingly more expensive and appear to be discouraging Marketplace enrollment.  (Some of the drop off may be due to under estimated alternative insurance options like employer based insurance.)

Report conclusions:

  • The relatively low effectuation rate could be improved by additional outreach efforts, especially in states with very low rates.
  • Premium tax credits, cost sharing reductions, and premium criteria are the same across all states so Marketplace enrollment data provide insights into people’s willingness to pay for insurance given some level of financial assistance.
  • The limits of a willingness to pay more of the premium costs could hold back significant decreases in the number of people uninsured.  While the fines for remaining uninsured may weigh into families’ decisions as those fines become increasingly expensive, it may be that without a policy change to improve affordability overall insurance costs may remain a barrier to fuller insurance levels.