Health Policy$ense

The Unfinished Work of the Affordable Care Act

The U.S. still has a long way to go to achieve universal health coverage

December 12, 2015 is Universal Health Coverage Day

Author’s note: I am delighted to re-introduce this 2014 blog post, which has been updated by LDI with brand new resources and data. In this post, I reflect on the two central challenges of the ACA – covering the hardest to reach and turning that coverage into access to health services. On both fronts, 2015 has been an incredibly mixed year – Medicaid expansion is at risk in Kentucky, but is moving ahead in new states such as Alaska, Montana, and New Hampshire. The cost of coverage in the health insurance marketplace has become a topic of endless debate, even as recent data suggests that premiums may be lower than expected and in line with national trends. But the questions of whether consumers can navigate their coverage, overcome high deductibles, and find affordable care all remain important issues. Here’s to continued progress in 2016 on the road to universal coverage.

Updated December 2015

The United States is the last remaining rich country in the world where a significant percentage of the population lacks health insurance coverage. This situation is being improved under the Affordable Care Act (ACA), with recent estimates showing a historic low of 9% of the overall population uninsured. The uninsured rate may continue to fall in 2016, but the problem of the uninsured will not go away with the ACA. It will not go away even if all fifty states expand Medicaid for poor adults.

In its January 2015 estimates, the Congressional Budget Office (CBO) projects that by 2025, 31 million people—one of every nine residents under age 65—will still be uninsured. Who are these individuals?

  • About 30% of them will be undocumented immigrants, who are excluded from the ACA by design. Undocumented immigrants are prohibited from enrolling in Medicaid, receiving subsidies, and purchasing coverage on the exchanges.
  • About 10% of them will be adults below the poverty line residing in states that are not expanding Medicaid. Under the ACA these individuals may not receive any subsidies to purchase coverage on the exchanges. These adults cannot afford full-price coverage in the individual market, and would need some other assistance to get insurance. This group includes many individuals with chronic illnesses and very spotty access to the medical system.
  • About 10%-20% of them will be eligible for Medicaid but remain unenrolled, either by choice or because of administrative barriers.

The remaining 40% will be eligible for some kind of health insurance but will not enroll, for reasons that are likely to be complex. Some will be between coverage – people changing jobs, recent retirees, and others undergoing life transitions. Although the ACA allows people to apply for subsidies outside of open enrollment under special circumstances, some people may not be motivated to seek coverage where they regard their lack of coverage as a temporary situation.

Other consumers not taking advantage of their eligibility for coverage will be confused or overwhelmed by their options. A June 2015 poll by the Robert Wood Johnson Foundation found that 60% of the uninsured were confused or had not heard of the tax credit, and 70% wanted one-on-one help understanding their options.

Moreover, some individuals may remain uninsured because they feel that they cannot afford it, or because the insurance coverage they can afford is not worth it. The June 2015 poll found that 79% of the uninsured who looked for insurance said that after they weighed everything, they could not afford a plan. The issue of affordability has become a hot political topic, not least because the law has been staked on its ability to bring down prices for consumers. Undeniably, the ACA does bring down costs of buying coverage, and provides more comprehensive coverage to many than was available before the law. Plans cover a regulated set of essential benefits and provide free preventive care. In the pre-ACA world, it was very difficult for consumers to find plans of comparable quality and comprehensiveness to the current plans offered on the exchanges, and consumers were routinely turned away or restricted because of pre-existing conditions.

Still, there are some clear holes in the ACA system. Cost sharing that can total up to $6,500 a year may seem like too-skimpy coverage for many uninsured. With Norman Daniels, I have argued that the structure of the subsidies on the exchange leave consumers vulnerable to out-of-pocket costs that may stretch them beyond their resources, compromising the ability of low-income households to invest in their retirement or save for future purchases. The law also prevents individuals from seeking exchange coverage subsidies if their employer offers a plan that costs less than 10% of their income, an amount likely to still be burdensome for many workers.

A future Congress – one less politically polarized – might increase the subsidies to consumers or include more groups in public programs. For now, however, the ACA provides an incomplete realization of the goal of universal coverage. On Universal Health Coverage Day it is appropriate to ask the philosophical question – how should society place a value on the coverage gained under the ACA, and how should society place a value on going beyond the ACA to achieve truly universal coverage?

Rather than attempt an answer, I will close with three comments. First, the research measuring the benefits and costs of coverage expansions is growing, but not complete. Several quasi-experimental studies from the last five years find that expanded access to private and public insurance coverage improves some measures of health statusreduces mortality, and may affect non-health outcomes including income and educational attainment. The evidence is compelling, but does not entirely speak to the question of how much a dollar of taxpayer dollars on health insurance buys in social benefits, all told. Second, moving toward universal coverage is only one of several dimensions of moving toward a more equitable society with better social protection. It is not obvious that health insurance is the best platform through which to promote a number of its purported social benefits including income redistribution (through subsidies), promotion of population health, or even the mitigation of health-related financial insecurity. Third, and relatedly, there is a reasonable debate about how much individual preferences for having insurance, and what type of insurance, should be accommodated. The complexity of the ACA – and the dissatisfaction and frustration felt by many – is ironically a consequence of a program designed to provide multiple pathways into health insurance coverage.