The rise of uninsurance in the South and West over the past decade means those regions have the most to gain from the Affordable Care Act’s (ACA) coverage expansions, says a brief by the Urban Institute sponsored the Robert Wood Johnson Foundation. However, new taxpayer-financed health insurance coverage in the ACA health reform law could have a limited impact in those regions if states choose not to expand Medicaid and are slow to implement health insurance exchanges.
The brief measured changes from 2000 to 2010 in coverage rates for nonelderly people nationally and by region (South, West, Midwest, and Northeast). The results were also split by income and by coverage groups: children, parents, and adults without dependent children. A summary of their findings:
- Employer-sponsored insurance decreased nationally from 69.3 percent to 58.7 percent
- Medicaid coverage increased nationally from 8.4 to 14.4 percent
- Uninsurance rates increased nationally from 14.8 percent to 18.5 percent
The South, in particular, saw the largest decreases in health insurance coverage and had the lowest coverage rates by 2010. People with incomes between 138 percent and 400 percent of federal poverty level also saw large declines in coverage nationally, and particularly in the South. Those people would be eligible for subsidized insurance in health insurance exchanges created under the health reform law.
- The Midwest and South saw the largest declines in employer-sponsored insurance, 11 and 12 percentage points, respectively.
- The Northeast and West experienced declines of 8 and 9 percentage points, respectively.
- In 2010, the South and West had the highest rates of uninsurance – 21.7 percent and 20.0 percent – compared to the Northeast and Midwest – 14.1 percent and 14.8 percent.
- The low-income population in the South experienced the largest percentage point decline in employer-sponsored insurance and the largest percentage point increase in uninsurance.
- Those in the subsidy-eligible income range (138-400 percent of federal poverty level) experienced higher percentage point increases in uninsurance over the decade, potentially because of limited access to public coverage relative to the lowest income group.
Authors note that the areas where coverage is lowest are also – generally speaking – areas where state leaders have expressed the least amount of enthusiasm about expanding Medicaid and establishing health insurance exchanges. The Supreme Court’s decision in NFIB v. Sebelius now allows states to opt out of the ACA Medicaid eligibility expansion.
The federal government will establish exchanges in states that do not take it upon themselves to do so. “But to the extent the federal government has difficulty establishing exchanges in what is potentially a large number of states, some states with high uninsurance rates among their middle-income population may not see coverage benefits under the Affordable Care Act,” say Fredric Blavin, John Holahan, Genevieve Kenney, and Vicki Chen – the study’s authors.
It is important to note that many experts – including myself – are concerned that the Affordable Care Act itself will result in lower rates of coverage, especially employer-sponsored coverage, over time as a result of crowd out and large-scale premium increases for the young, the healthy, and men under adjusted community rating. These and other policy and market factors underlying ACA could easily wipe out at least a portion of the net increase in health insurance coverage intended by the ACA’s authors. To be sure, ACA creates winners and losers, in very large numbers, and in ways that are difficult to predict with precision because of the sheer size, scope, and unprecedented nature of Obamacare.
Also, the Medicaid expansion decision presents state leaders with a tough mix of pros and cons. To learn more, check out my post on the advantages and disadvantages of Medicaid eligibility expansion.
Sellers Dorsey maintains an ongoing analysis of which states intend to opt in or opt out of the ACA Medicaid eligibility expansion, and the Kaiser Family Health Foundation keeps track of federal and state progress in establishing exchanges.
Kip Piper is a Medicare, Medicaid, and health reform consultant, speaker, and author. A senior consultant with Sellers Dorsey and Fleishman-Hillard, Kip advises health plans, hospitals and health systems, states, drug and device manufacturers, and investment firms throughout the U.S. For more, visit KipPiper.com. Follow on Twitter at @KipPiper and connect with Kip on LinkedIn.