Decrease in private nongroup coverage leaves more uninsured

August 19, 2019

Topics: Quote of the Day

By Laura Skopec, John Holahan, and Caroline Elmendorf
Robert Wood Johnson Foundation, Urban Institute, August 15, 2019

The Issue

Between 2013 and 2016, the uninsurance rate for nonelderly Americans from birth to age 64 fell every year, and 18.5 million more Americans had health insurance coverage in 2016 than in 2013. However, these coverage gains stalled in 2017. Using the American Community Survey, this research finds that uninsurance increased between 2016 and 2017, despite a strong economy and accompanying increases in incomes and employer-sponsored insurance (ESI) coverage.

Key Findings

• The uninsured rate climbed from 10.0 percent in 2016 to 10.2 percent in 2017, the first increase since 2013, after significant declines driven by the Affordable Care Act (ACA). This decline resulted in 700,000 more uninsured people in 2017 than in 2016.
• The uninsured rate held stable in Medicaid expansion states at 7.6 percent, but increased from 13.7 percent to 14.3 percent in states that did not expand Medicaid.
• Non-Medicaid expansion states lost marketplace coverage at twice the rate of expansion states.

Conclusion

Factoring in population growth in 2017, gains in ESI mitigated, but did not overcome reductions in Medicaid and CHIP and ACA marketplace coverage. Researchers observed broadly distributed losses across all age groups and income levels. Non-Hispanic white and black nonelderly people, those with at least some college education, and those living in the South and Midwest, experienced disproportionate coverage losses. The authors conclude that these increases in uninsurance will likely occur disproportionally in nonexpasion states, given their greater reliance on private coverage.

From the Brief

Overall, coverage losses were concentrated in the 19 states that did not expand Medicaid eligibility under the Affordable Care Act by July 1, 2017. Between 2016 and 2017, uninsurance held stable in Medicaid expansion states but increased by 0.5 percentage points in nonexpansion states. Though both expansion and nonexpansion states saw increases in employer-sponsored insurance and decreases in Medicaid/CHIP and private nongroup coverage over this period, the percentage-point decline in private nongroup coverage in nonexpansion states was nearly double that in expansion states (-0.6 percentage points versus -0.3 percentage points), precipitating larger coverage losses.

The increasing uninsurance rate in nonexpansion states between 2016 and 2017 may reflect their greater exposure to changes in the availability and affordability of marketplace and private nongroup coverage. In nonexpansion states, nonelderly people with incomes between 100 percent and 138 percent of the federal poverty level are eligible for marketplace subsidies to purchase private nongroup coverage, rather than Medicaid/CHIP coverage, so coverage gains in these states between 2013 and 2016 relied more on the availability and affordability of private nongroup coverage than coverage gains in Medicaid expansion states. Further changes to private nongroup coverage and marketplace policies in 2018 and 2019, including shorter open enrollment periods, availability of short-term, limited-duration policies, loss of federal funds to support cost-sharing subsidies, and repeal of the individual mandate to purchase coverage, may also disproportionately reduce coverage in nonexpansion states in the coming years.

https://www.rwjf.org…

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Comment:

By Don McCanne, M.D.

With the implementation of the Affordable Care Act (ACA), 18.5 million more Americans had health insurance coverage in 2016 than in 2013. However, the numbers of uninsured declined by 700,000 between 2016 and 2017. The decline was predominantly in the private nongroup and ACA marketplace plans and occurred primarily in states that did not expand their Medicaid eligibility.

Although the greatest success of ACA was in the expansion of Medicaid, the Medicaid program already existed and could have been expanded without enactment of ACA. The other ACA program – establishment of the private insurance exchanges or marketplaces – has fallen short of goals of universality and affordability, and enrollment began reversing in 2016. ACA also increased regulatory oversight, but at a cost of increased financial barriers to care through higher deductibles, and diminished access to care because of wider use of restricted provider networks. There is also some question about the expansion of Medicaid since many were forced into Medicaid managed care programs that seem to be falling short on performance.

The current debate over reform is whether 1) to continue to try to tweak ACA, perhaps adding more administrative complexity through a public option, in spite of the post-ACA highly flawed, dysfunctional health financing infrastructure, or 2) to replace the system with an as yet undefined Republican plan which would likely transfer more of the responsibility of obtaining care to individual patients making care even less affordable and less accessible, or 3) to enact and implement a single payer model of an improved version of Medicare that would cover everyone. There is really only one reasonable choice here: Single Payer Medicare for All – that is if we want to have a high quality health care system that takes care of everyone of us and is affordable for each of us.

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