Monday, March 10, 2014

Gallup: A shift away from employer-sponsored health insurance?

The top line in Gallup's latest polling on Americans insurance status is that the percentage of uninsured Americans continued to drop throughout the first quarter of 2014 -- after reaching an all-time high in the third quarter of 2013. Greg Sargent digests the apparent good news with the appropriate dose of caution here. But I want to call attention to another possible significant trend in the Gallup data, though it too could be mere statistical noise.

Th survey results seem to reflect a shift away from employer-sponsored insurance (ESI) towards privately-purchased plans, Medicaid, and Medicare (the last is inevitable as America ages):

The percentage of Americans who report they are insured through Medicaid has increased to 7.4% from 6.6% in the fourth quarter of 2013. This uptick may be because some states have chosen to participate in the Medicaid expansion under a provision of the Affordable Care Act.

Meanwhile, fewer Americans now say they get their primary insurance through a current or former employer -- 43.5% down from 45.5% in the fourth quarter of 2013. More Americans now say they have a plan fully paid for by themselves or a family member -- 18.0% versus 17.2% at the end of last year.
A couple of quibbles about Gallup's wording. First, "fully paid for by the themselves" presumably also includes "or partly subsidized by the federal government," e.g., over 80% of ACA private plan signups. More importantly, as the Kaiser Family Foundation's Larry Levitt cautions, "percentage of Americans who report..." actually means "percentage of insured Americans who report." That means that the shift is smaller than it looks.

In an email, Mr. Levitt adds further cautions:
One needs to be careful in over-interpreting Gallup’s results, especially at the sub-group level, given the statistical volatility. The margin of error is plus or minus 1% among all adults, and even higher for sub-groups. So, it’s very likely that the change in employer coverage from the end of 2013 to the beginning of 2014 is within the margin of error.

Like other larger surveys, Gallup has shown a decline in employer coverage over time, driven by changes in the economy, not the Affordable Care Act.

As other sources of coverage grow this year – like Medicaid and the exchanges – employer coverage will decline as a share of insurance, but not necessarily in raw numbers. In the long-term, the Congressional Budget Office does expect employer coverage to decline as people have other options.
Re that last point: the CBO, since it first scored the bill that became the ACA in 2009, has projected a reduction in ESI of about 4 million by 2017.

The ACA moves in some ways to prop up ESI and in some ways to ease or encourage a shift away from it. On the boost side, there's the now-infamous and postponed employer mandate, requiring companies hiring more than 50 people to provide insurance to full-time workers or pay a penalty -- as well as tax credits for smaller businesses to provide insurance, and an also-stalled small business marketplace to provide affordable options. On the reduction side, there's the "Cadillac tax" discouraging employer provision of particularly generous plans, and the provision of affordable options to those who don't get insurance from an employer, which will encourage some to reduce hours and buy their own, often with federal subsidies.

Whatever the pros, cons and inevitabilities, I expect Republicans to seize on the apparent drop in ESI, just as they did on the CBO's expanded projection of the reduction of labor hours driven by the ACA's subsidization of insurance bought in the private market.

One final thought: some of that apparent shift away from ESI could reflect subsidy-eligible buyers choosing ACA plans over COBRA.

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