Saturday, February 13, 2016

How the ACA reversed two decades of insurance bleeding for the near-poor (and cut uninsurance for the poor too)

I've noted before that while the ACA works best for uninsured people with incomes under 200% of the Federal Poverty Level (FPL),* that's also where the uninsured are concentrated. While just about exactly one third of the U.S. population is below 200% FPL,  55% of the uninsured were below that level in 2013,  according to the Census Bureau's  Census' Current Population Survey 2015 Annual Social and Economic Supplement.**

A Health Affairs article by Nicole Huberfeld and Jessica Roberts spotlights one reason for the concentration of the uninsured at low income levels. While the availability (or affordability) of employer-sponsored insurance has dropped for all income levels since early this century,
The decreases in coverage were measurably greater for middle- to low-income workers; for example, those earning more than 400 percent of the federal poverty level (FPL) experienced a 2.8 percent drop in employer-sponsored coverage from 2000 to 2011, but people earning less than 200 percent of the FPL experienced a 10.1 percent drop in employer-sponsored coverage.
That snippet sent me to the most recent National Health Interview Survey  (NHIS) update, which indicates that the ACA has plugged this gap by making both private and public insurance available to lower income workers. (Stats for 1997-2010 are here.)
The NHIS deems those under 100% FPL "poor" (naturally) and those from 100-200% FPL "near-poor." The near-poor are the sweet spot for the ACA private plan marketplace. Here is the ebb and flow of private health insurance (both employer-sponsored and purchased in the individual market) for the near-poor from 1997-2015:

Percentage of Adults 18-64 with Private Insurance: Income 100-200% FPL


Private insurance for households in this income group had started to snap back a bit by 2013, then surged after the ACA marketplace opened on Jan. 1, 2014. . The ACA and an improved economy have brought private insurance back to about where it was in 2005 for the near-poor.The increase is probably due in part to an increase in ESI for this group -- but also to ACA subsidies for about 6 million marketplace enrollees with incomes under 200% FPL

Public insurance for this group has also surged, both pre- and post-ACA -- from 14.6% in 1997 to 26.6% in 2013 and 33.8 in 2015.  Medicaid is available up to 138% FPL in the 31 states (plus D.C.) that have expanded eligibility.

For the poor, too, the ACA brought private insurance to about the halfway point between where it had been in 2005 -- 26.8% - and its nadir in the financial crash -- 18.0% in 2009, inching up to 19.0% in 2013. In 2015, 23.7% of those under 100% FPL had private insurance.

Theoretically, those under 100% FPL are not eligible for ACA private plan subsidies (excepting legally present noncitizens barred from Medicaid, who made up about 2-3% of ACA enrollees). But the ACA defines a household more narrowly than the NHIS, limiting it  to those filing as a tax household as opposed to everyone living under one roof. In states that refused the Medicaid expansion, eligibility for private plan subsidies begins at 100% FPL, and the increase in private insurance under 100% FPL may partly reflect enrollees who inched over that line by the ACA's measure of income.

Predictably, though, the poor's gains in public insurance are much more dramatic.*** Between 1997 and 2013, the percentage of poor adults aged 18-64 with public insurance ticked up from 34.3% to 42.4%. It surged to 51.5% by 2015.

Put the two sources of insurance together, and here's how the uninsurance rate has changed for the poor and near-poor over the past decade, and since the ACA was fully implemented in 2014.

Uninsurance rates for for poor and near-poor adults aged 18-64


Overall, the uninsurance rate for adults aged 18-64, which was m roughly the same place in 2013 as in 2005, dropped by 33.5% for the poor from 2013 to 2015, and by 37.4% for the near-poor. The drop is slightly more modest compared to 2005, and considerably steeper since 2010, when the effects of the financial crash were at their worst,

For the poor, steady gains in public insurance prior to full ACA implementation kept uninsurance rates more or less stable (though very high) from 1997 through 2013. It was the near-poor who were slammed by private insurance losses from 1997 through 2010. Since ACA implementation, a mixture of private and public insurance gains have more than reversed those losses.

For the not-poor the uninsurance rate  fell 15.6% from 2013 to 2015, from 8.9% to 7.7%.  The NHIS does not provide a breakout for those with incomes from 200-400% FPL, the upper (and skimpier) subsidy range for private plans purchased in the ACA marketplace.

Clearly, the ACA is having its greatest impact on the uninsured with incomes under 200% FPL. That's appropriate to some degree. But the law should offer a better deal to those between 200% and 400% or even 500%, FPL.


* Beneficiaries below 200% FPL qualify either for Medicaid (to 138% FPL in states that have accepted the expansion) or for subsidized private plans with strong Cost Sharing Reduction (CSR) subsidies. CSR weakens sharply at 201% FPL and fades out at 250% FPL, while subsidized premiums rise with income level.  According, takeup of ACA private plans by the uninsured is much higher under 200% FPL than above the threshold, and takeup drops steadily as income rises.

** According to the CPS ASEC, 73% of the uninsured were under 300% FPL. And since the ACA application defines a household more narrowly than the CPS -- to those filing as a tax household as opposed to everyone living under one roof -- the richer benefits available up to 200% FPL by the ACA's measure may reach somewhat higher up the CPS income scale. Perhaps over 60% of the uninsured are below 200% FPL as measured on the ACA application. On the other hand, about 3 million with incomes under 100% FPL are shut out of any coverage by the refusal of 19 states to expand Medicaid eligibility, That's about 13% of the uninsured with incomes under 200% FPL as of 2013, according to the census. Another 4.8 million are shut out of coverage by immigration status, according to Kaiser's estimate, and a good percentage of those are doubtless under 200% FPL. Still others are shut out by family glitch -- that is, one family member's employer offers insurance deemed affordable for that individual, though the family coverage offered may be far from affordable. Kaiser estimates that 4.8 million uninsured are ineligible for ACA subsidies due to employer insurance offers, though not all of these are victims of the family glitch. Still, taken together, a high percentage of the uninsured with incomes under 200% FPL are ineligible for help under the ACA.

*** At least according to the NHIS. The Census surveys show an apparently anomalous small increase in pubic insurance and large increase in private insurance for the poor.

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