Thursday, January 28, 2016

Ignorance vs. unaffordability among the uninsured

As the ACA's third Open Season for private health plan enrollment draws to a close, enrollments are flatlining, and at a low level. Barring an enormous last-minute surge, it looks like HHS's preseason lowball estimate, with a midpoint of about 12.6 million total enrollments by Jan 31, will be on target.

At the same time, the Kaiser Family Foundation's latest health tracking poll indicates that most of the uninsured who are eligible for aid  have not been contacted and/or don't know what aid is available:
In terms of enrollment engagement and efforts to get coverage, most of the uninsured say they have not been contacted about signing up for coverage (67 percent) or that they have not tried to get more information on their own (57 percent). More specifically, most uninsured say they have not taken steps to figure out if they are eligible for the two main coverage expansions under the ACA — Medicaid and financial assistance to purchase health insurance through the healthcare marketplaces. Over 7 in 10 saying they have not tried to figure out if they qualify for Medicaid (72 percent) or for financial assistance to purchase health insurance (79 percent) in the past 6 months.
Those numbers give a somewhat exaggerated impression, as only 49% of the uninsured are eligible for Medicaid or private plan tax credits, and 10% of those are children eligible for CHIP. Still, many prior surveys -- e.g., by the Urban Institute and McKinsey & Co. -- have focused on the aid-eligible uninsured and found that majorities don't know what's on offer. Further, a previous Kaiser survey found that large numbers of the aid-eligible uninsured who did explore obtaining insurance received the false impression that no aid was available (I explored several ways that may happen here).

The ACA has done a good job insuring the uninsured with incomes under 200% of the Federal Poverty Level (who constitute a majority, though not a huge majority, of the uninsured). Above that income level, Cost Sharing Reduction subsidies are weak (up to 250% FPL) or nonexistent (above that threshold), premiums steep and out-of-pocket costs daunting. A single person earning $24,000 per year will pay about $135 per month for a benchmark silver plan, with a deductible likely to be at least $1,500 and in many regions as high as $3,000.  In short, the subsidies are under-powered above 200% FPL -- and for a significant number of buyers below that threshold, as an Urban Institute analysis argued.

We still don't know the relative weight of ignorance and unaffordability among aid-eligible individuals who remain uninsured. But more than one study has found that takeup drops sharply as income rises -- most recently, an Urban Institute study* found that  62% of eligible buyers with incomes under 200% FPL enrolled, versus 29% in the 200-300% FPL range. (For perspective, it's worth keeping in mind that as of the start of open season about 7 million people were eligible for tax credits in the marketplace. Since then, perhaps 2.5-3 million subsidy-eligible new customers have enrolled.)

It may also be the case, however, that outreach is more vigorously targeted at lower income populations -- certainly many social service agencies and health clinics that receive the bulk of navigator grants work mainly with the poor. The Kaiser findings indicate that outreach, too, is under-powered.   Absent further funding and legislative fixes (e.g. ending the family glitch), filling the state risk pools and further reducing the ranks of the uninsured is going to be a long, slow grind at best.

* Buettgens M, Kenney GM, and Pan CW. Variation in Marketplace Enrollment Rates in 2015 by State and Income. Washington: Urban Institute, 2015

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