The ACA s Coverage Expansion in Michigan: Demographic Characteristics and Coverage Projections

Transcription

1 CENTER FOR HEALTHCARE RESEARCH & TRANSFORMATION Cover MichigaN 2013 JULY 2013 The ACA s Coverage in : Demographic Characteristics and Coverage Projections Introduction Demographic characteristics of ACA target populations... 3 Current Form of Primary Coverage Age Distribution Parent Status Gender... 5 Employment Status Educational Attainment Race/Ethnicity ACA Coverage Projections... 7 Coverage Projections with Coverage Projections... 8 Coverage Projections for the Uninsured in Methodology Appendix

2 Introduction In January 2014, the Affordable Care Act (ACA) will begin to offer new health insurance coverage options to millions of Americans, many of whom are currently uninsured. There is still considerable uncertainty, however, about how the coverage expansion will play out. Several states continue to debate whether to expand eligibility for their programs as the ACA intended. Health insurance exchanges that will offer coverage in the individual and small group markets are still being developed by the federal government and many states for the open enrollment launch in October Employers, who still provide coverage to the majority of Americans, are evaluating what, if any, changes to make in their health care offerings. All of these issues are reflected in activity in. To better stand the likely coverage effects of the ACA on s insurance market, it is important to recognize the demographic characteristics of residents who will be most affected. This issue brief is intended to both describe the characteristics of these populations and project how the ACA will affect the overall picture of coverage in. Since there is still uncertainty about whether or not will move forward on an expansion of, alternative projection scenarios are included. Key findings include: If does expand in, it would have a large effect on young, childless adults. Forty percent of those who would be eligible for the expansion are between the ages of 19 and 24, and 77 percent do not have children. Half of the adults (51 percent) who would be eligible for an expansion are employed, a much higher percentage than those currently enrolled in. Nearly three-fourths (71 percent) of those who would be eligible for subsidized coverage on the health insurance exchange are currently employed. If expands in, the uninsured rate in could be expected to drop to 6 percent by If not, the 2019 uninsured rate is expected to be 10 percent. If is expanded, by 2019, 93 percent of the uninsured will have an affordable coverage option ( or exchange-based tax credits). Without expansion, 40 percent of the uninsured will be left an affordable coverage option. Regardless of whether eligibility is expanded, employers are still projected to provide coverage to a majority of residents in The Center for Healthcare Research & Transformation (CHRT) illuminates best practices and opportunities for improving health policy and practice. Based at the University of, CHRT is a non-profit partnership between U-M and Blue Cross Blue Shield of to promote evidence-based care delivery, improve population health, and expand access to care. Suggested Citation: Fangmeier, Joshua; Udow-Phillips, Marianne. The ACA s Coverage in : Demographic Characteristics and Coverage Projections. Cover July Center for Healthcare Research & Transformation. Ann Arbor, MI. Visit CHRT on the Web at: 2 CHRT Center for Healthcare Research & Transformation

3 Demographic characteristics of ACA target populations Following the U.S. Supreme Court s June 2012 ruling in NFIB v. Sebelius, states will not face financial penalties if they do not expand eligibility to non-elderly adults whose income is below 138 percent of the federal poverty level (FPL). 1 and many states are still debating whether or not to proceed with expansion for The ACA also expands insurance coverage by providing tax credit subsidies to many lower and middle income individuals and families to reduce the cost of private health insurance purchased through health insurance exchanges. Insurance exchanges (sometimes known as marketplaces ) are mandatory the ACA, but the eligibility thresholds for their tax credits depend on whether a state expands. 2 s will be implemented either by the federal government or by the states themselves directly or in partnership with the federal government. In in 2014, the health insurance exchange will be implemented by the federal government. The two populations that are most affected by the ACA s coverage expansion are: 1. Non-elderly adults (aged 19-64) who will be eligible for if a state approves the expansion; and 2. Non-elderly adults (aged 19-64) who will be eligible for tax credits to subsidize private coverage purchased on the individual health insurance exchange. Demographic characteristics of these populations are described below. Characteristics of children and the elderly in were not examined as their coverage eligibility will be largely unchanged by the ACA. Full data tables of demographic characteristics are available in the Appendix. Figure:1 ACA Target s (Aged 19-64) by Primary Form of Coverage, 2011* % 72.2% 8.4% 9.6% 40.5% 49.9% 31.6% 68.4% with 27.7% 72.3% Uninsured Employer-Sponsored Nongroup & Other Public 10.8% 9.8% 61.9% 17.5% * Excluding those with employer-sponsored insurance (ESI) who may be subsidy eligible. Current Form of Primary Coverage In 2011, over 17 percent of s adults aged 19 to 64 were uninsured. Those who would be eligible for one of the coverage provisions of the ACA were uninsured at much higher rates than the population at large. Specifically, more than half (55 percent) of those who would be eligible for (if the state expands coverage) or for subsidies to purchase health insurance were uninsured. The remaining population (45 percent) of those eligible for coverage the ACA had coverage through an employer, an individual policy, or another form of public insurance. Among those who would be eligible for, half were uninsured in 2011 and 40 percent had employer-sponsored insurance. Figure 1 Those with private insurance would be eligible for if eligibility is expanded and their income is below 138 percent FPL. 1 Supreme Court of the United States. National Federation of Independent Businesses et al. v. Sebelius, Secretary of Health and Human Services, et al. June supremecourt.gov/opinions/11pdf/11-393c3a2.pdf 2 If eligibility is expanded, non-elderly adults will be eligible for tax credits if their income is between 138 percent and 400 percent FPL. If eligibility is not expanded, tax credit eligibility extends to those between 100 percent and 400 percent FPL. Cover 2013 The ACA s Coverage in : Demographic Characteristics and Coverage Projections July

4 Demographic characteristics of ACA target populations (continued) Age Distribution The expansion and exchange tax credits could have varied effects across age groups. The population who would be eligible for the expansion is, on average, younger than people in the current program. In 2011, 41 percent of the expansion target population was between 19 and 24 years old. The average age of the expansion population was 32.8 years, compared to 39.2 years for current enrollees between ages 19 and 64. The exchange tax credits will have a larger effect on older residents. Among the exchange target population in 2011, 46.5 percent were 45 to 64 years old, compared to 23.7 percent of the expansion target population. Figure 2 If is not expanded, the average age of the exchange-eligible population would decline slightly from 42.6 years to 41.3 years. This decline in the average age would be due to the addition of exchange eligible residents between 100 percent and 138 percent FPL, who were disproportionately younger. 10 Figure:2 ACA Target s (Aged 19-64) by Age, % 20.4% 21.7% 24.5% 14.1% 13.5% 21.4% 24.4% 21.8% 24.3% 23.1% 21.5% 24.5% 16.8% 41.5% 7.4% 10.9% 9.6% 22.1% 19.9% with 21.7% 13.9% yrs yrs yrs yrs yrs 24.5% 20.7% 19.2% Parent Status Currently in, non-disabled childless adults are not eligible for full benefits. 3 Parents of dependent children are eligible for coverage if their income is below 64 percent FPL. Therefore, a expansion would provide a new source of coverage not only to low-income childless adults but also to many low-income parents whose income is too high to qualify current rules. Figure:3 ACA Target s (Aged 19-64) by Parent Status, Among adults who would be eligible for expansion, 77 percent did not have children a much higher rate than enrollees (54 percent). Nearly two-thirds of the exchange target population was composed of childless adults. Figure % 77.2% 63.5% 63.7% 59.1% 3 very low-income childless adults are eligible for limited coverage the state s Adult Benefit Waiver program. 46.3% 22.8% 36.5% 36.3% with 40.9% Adult with Children Adult Children 4 CHRT Center for Healthcare Research & Transformation

5 Demographic characteristics of ACA target populations (continued) Gender Currently, in provides coverage to pregnant women whose income is up to 185 percent FPL. Due to this and other caregiver eligibility categories a disproportionate share of current enrollees are women. However, the ACA coverage expansion is likely to have a larger effect on s male population. In 2011, men comprised a majority of both the expansion and exchange eligible population, even though they are slight minority of non-elderly adults. Figure 4 Employment Status There is considerable variation in the employment status of the populations that will be affected by the ACA coverage provisions. The expansion population is much more likely to be employed than current enrollees. In 2011, 51.2 percent of the total expansion target population was employed Figure 5, with an effective employment rate of 72.3 percent (27.7 percent unemployment rate). 4 The exchange target population is even more likely to be employed than the expansion target population. Among the total exchange population, 71.4 percent were employed, with an effective employment rate of 85.5 percent (14.5 percent unemployment rate). In 2011, the unemployment rate of non-elderly adults in was 12.5 percent. Figure:4 ACA Target s (Aged 19 64) by Gender, % 41.2% 52.3% 51.9% 51.6% Male Female 47.7% 48.1% with 48.4% % 49.1% Figure:5 ACA Target s (Aged 19-64) by Employment Status, % 29.2% 19.6% 16.6% 12.1% 16.4% 13.2% 24.8% 9.4% % 4 The effective employment rate is the ratio of individuals employed to individuals participating in the labor force % 71.4% 70.4% with 65.9% Employed Unemployed Not in labor force Cover 2013 The ACA s Coverage in : Demographic Characteristics and Coverage Projections July

6 Demographic characteristics of ACA target populations (continued) Educational Attainment Along with having a higher income than the expansion target population, the exchange target population has higher levels of educational attainment. Among those aged 25 64, 17.3 percent of the population that would be eligible for subsidized coverage on the exchange had a bachelor s or higher degree in 2011, compared to 12.6 percent of the population who would be eligible for. Figure 6 High school graduation rates also differ between these two populations, with 15.1 percent of the expansion population having less than a high school degree, compared to 9.8 percent of the subsidy-eligible exchange population. Both groups, however, compare favorably to those currently enrolled in in terms of education: 26 percent of current enrollees did not have a high school degree or equivalent and only 6.5 percent had a bachelor s or higher degree in Race/Ethnicity Racial and ethnic minorities comprise a disproportionate share of those currently enrolled in. The minority composition of the expansion and exchange target populations is closer to the distribution in the overall population. In, nonelderly African American adults in 2011 were overrepresented in the expansion population (19.9 percent) and represented in the exchange population (11.3 percent) relative to their representation in the overall non-elderly adult population (14.2 percent). However, other racial/ethnic minorities comprise a similar share of the expansion and exchange target populations. Figure 7 Figure:6 ACA Target s (Aged 25-64) by Educational Attainment, % 31.3% 36.2% 26. Less than High School 2.1% 5.6% 30.7% 12.6% 36.4% 35.9% 15.1% 2.7% 5.4% 19.9% High School or Equivalent 17.3% 36.9% % with 3.3% 5.5% 11.3% 15.8% 36.8% 36.3% 11.1% Some College or Associate's 3.2% 6.1% 12.2% 27.7% 34.8% 28.6% 8.9% Bachelor's or higher Figure:7 ACA Target s (Aged 19-64) by Race/Ethnicity, % 4.1% 14.2% % White, Non-Hispanic 72. Black, Non-Hispanic 80. with Hispanic 78.5% 78.3% Other 6 CHRT Center for Healthcare Research & Transformation

7 ACA Coverage Projection The Affordable Care Act will have significant effects on the insurance market, especially if eligibility is expanded. While some people in will still lack health insurance after the full implementation of the coverage provisions of the ACA, a very large number of those currently uninsured will gain coverage the ACA. These effects are likely to increase over time as more people stand the coverage opportunities included in the ACA. While some decline in employer-sponsored insurance (ESI) is expected as some firms drop coverage and eligible individuals switch to the exchange or, ESI is projected to still be the primary source of insurance coverage for the majority of non-elderly individuals. Figure:8 Projected Health Insurance Coverage for Non-Elderly Residents (Aged 0-64) with Pre-Reform % 9.2% 13.6% 60.5% Coverage Projections with If expands, the number of nonelderly residents (aged 0-64) enrolled in / CHIP (Children s Health Insurance Program) is expected to grow from 1.4 million (16.7 percent) in our 2011 baseline to just over 2 million (24.5 percent) by The number of uninsured residents is projected to drop from 1.1 million (13.6 percent) to just over 500,000 (6.3 percent) during the same period (see Figure 8). The majority of those still uninsured would most likely be people eligible for or tax credits but not enrolled in either program. Assuming that expands, enrollment in the individual health insurance exchange is projected to be relatively modest in 2014 with 127,000 enrollees, growing to over 550,000 by It is important to note that the projections shown below do not look separately at the number of employees enrolled in the Small Business Health Options (SHOP) exchange through their employer. Those individuals are included in employer-sponsored coverage figures below since they are still getting coverage from their employer; they would just be getting that coverage through a different mechanism than they do today. Figure Post-Reform % 24.5% % 1.5% 6.6% 10.3% 6.3% 59.6% 56.6% Uninsured Employer /CHIP Nongroup & Other Public Uninsured 1,147, % 864, % 528, % Employer 5,090, % 5,010, % 4,764, % /CHIP 1,402, % 1,729, % 2,061, % Nongroup & Other Public 772, % 681, % 504, NA 126, % 553, % Total 8,412, ,412, ,412, Cover 2013 The ACA s Coverage in : Demographic Characteristics and Coverage Projections July

8 ACA Coverage Projection (continued) Coverage Projections If does not expand in, the reduction in the number of uninsured would be much more modest, with nearly 830,000 individuals (9.8 percent) of non-elderly residents (aged 0-64) projected to remain uninsured in Figure 9 Since exchange tax credits would be available to those whose income is between 100 and 138 percent of the federal poverty level, a larger number of residents would likely purchase private coverage through the insurance exchange than they would if expands. This difference is expected to be very modest in 2014 but will likely grow over time. Specifically, by 2019 we estimate that exchange enrollment will include nearly 120,000 more individuals if is not expanded. Even expansion, enrollment is still projected to grow somewhat (see Figure 9). This is due to the simplification and streamlining requirements in the ACA, which will likely make it easier for those eligible current program requirements to enroll. Figure 9 Figure:9 Projected Health Insurance Coverage for Non-Elderly Residents (Aged 0-64) Pre-Reform % 17.1% 9.2% 8.3% 1.9% 13.6% 60.5% 12.3% 60.4% Uninsured Employer /CHIP Nongroup & Other Public Post-Reform 6.1% % % 58.7% Uninsured 1,147, % 1,031, % 827, % Employer 5,090, % 5,083, % 4,938, % /CHIP 1,402, % 1,440, % 1,462, % Nongroup & Other Public 772, % 697, % 512, % NA 160, % 671, Total 8,412, ,412, ,412, CHRT Center for Healthcare Research & Transformation

9 ACA Coverage Projection (continued) Coverage Projections for the Uninsured in 2019 The expansion has large consequences for the coverage options available to uninsured residents in. If the expansion occurs, 53 percent of the uninsured are projected to gain insurance by 2019, with the majority enrolling in. If is not expanded, only 27 percent of the uninsured are expected to enroll in a health plan. Figure:10 Projected Health Insurance Coverage for Non-Elderly Uninsured Residents (Aged 0-64) by % 7.3% 37.4% If eligibility is expanded, 93 percent of the uninsured will have access to one of the ACA s coverage provisions ( or exchange tax credits), regardless of whether they actually enroll. Figure 10 Those who would not be eligible for one of these provisions include persons who would not qualify for a tax credit because their income is more than 400 percent FPL, unauthorized immigrants, and noncitizens ineligible for because they have less than five years of U.S. residency. 5 If eligibility is not expanded, only 60 percent of the uninsured population is expected to have access to an ACA coverage provision due to the fact that exchange tax credits are not available to individuals below 100 percent FPL. Specifically, the ACA makes exchange tax credits available to qualified individuals between 100 percent and 400 percent FPL, unless they are eligible for. 22.9% 16. With % % in in Uninsured, Uninsured, Uninsured, neither nor 23.1% Without Coverage Projections for the Uninsured, 2019 With Without Gain Insurance Coverage 612, % 306, % in 428, % 46, in 183, , % Remain Uninsured 535, % 840, % Uninsured, 262, % 117, % Uninsured, 188, % 264, % Uninsured, neither nor 83, % 458, Total 1,147, ,147, Citizens and legally present non-citizens whose income is more than 400 percent FPL can still enroll in a health plan through the exchange premium tax credits. Cover 2013 The ACA s Coverage in : Demographic Characteristics and Coverage Projections July

10 Methodology American Community Survey (ACS) data was obtained from the Integrated Public Use Microdata Series (IPUMS-USA) at the Minnesota Center, University of Minnesota. 6 Analysis was conducted for the non-institutionalized civilian population in Since 2008, the ACS has included questions about what forms of health insurance household members have. Since individuals may have multiple forms of coverage, they are assigned to a category of coverage based on the likely primary payer for acute care services. Compared to other briefs in CHRT s Cover series, this brief uses different data methods, so similar figures in this brief may not perfectly match those in the others. This analysis used health insurance units (HIUs) for calculating income for the purposes of determining ACA program eligibility. The HIU definition was developed by the State Health Access Data Assistance Center (SHADAC) at the University of Minnesota. 7 HIUs differ from the Census Bureau s definitions of household and family by grouping together only people who are considered a family unit for the purposes of public or private insurance coverage. Unrelated people and certain types of relatives (such as grandparents) typically form their own HIU, separate from related parents and children. Coverage projections were not calculated directly from a microsimulation model, nor did they account for future macroeconomic trends. Rather, take-up rates for and health insurance exchange coverage were developed from a set of publically available resources and applied to eligible populations. take-up rates came from the Urban Institute s June 2012 report on the ACA in Washington State. 8 take-up rates for 2019 came from the California Simulation of Insurance Markets. 9 Incremental changes to exchange take-up rates were calculated from the Congressional Budget Office s February 2013 report of the effects of the ACA on insurance coverage. 10 Effective take-up rates used in this analysis are available by request. Definitions : Non-elderly adults (aged 19-64) who were enrolled in in 2011 a pre- ACA eligibility category. : Non-elderly (aged 19-64) adults who had no insurance, individual insurance, employer-sponsored insurance (ESI), or other public coverage 11 in 2011 and whose income was below 138 percent of the federal poverty level (FPL). This includes both adults who would be newly eligible and those are that are eligible current rules. Non-citizens with less than five years of U.S. residency were excluded. 12 with : Nonelderly adults (aged 19-64) who had no insurance, individual insurance, or other public coverage and whose income was between 138 percent FPL and 400 percent FPL. Adults with ESI were not included. 13 : Non-elderly adults (aged 19-64) who had no insurance, individual insurance, or other public coverage and whose income was between 100 percent FPL and 400 percent FPL. Adults with ESI were not included. 6 Steven Ruggles, J. Trent Alexander, Katie Genadek, Ronald Goeken, Matthew B. Schroeder, and Matthew Sobek. Integrated Public Use Microdata Series: Version 5.0 [Machine-readable database] (Minneapolis, Min.: University of Minnesota, 2010). (accessed 6/29/13). 7 State Health Access Data Assistance Center Defining Family for Studies of Health Insurance Coverage, Issue Brief 27 (Minneapolis, Min.: University of Minnesota). (accessed 6/29/13). 8 Matthew Buettgens, Randall R. Bovbjerg, Caitlin Carroll, and Habib Moody. May The ACA in Washington (Washington, D.C.: Urban Institute). urban.org/health_policy/url.cfm?id= (accessed 6/29/13). 9 gerald F. Kominski, Ken Jacobs, Dylan H. Roby, Dave Graham-Squire, Christina M. Kinane, Greg Watson, Daphna Gans, and Jack Needleman. June California Simulation of Insurance Markets (CalSIM) Version 1.7: Health Insurance Coverage in California the Affordable Care Act, Revision of the March 22, 2012 Presentation to the California Health Benefit Board (Berkeley and Los Angeles, Cal.: UC Berkeley Labor Center and UCLA Center for Health Policy Research. aca_chartpack.pdf (accessed 6/29/13). 10 Congressional Budget Office. N.d. CBO s February 2013 Estimate of the Effects of the Affordable Care Act on Health Insurance Coverage, CBO s February 2013 Estimate of the Budgetary Effects of the Insurance Coverage Provisions Contained in the Affordable Care Act, and Health Insurance s: CBO s February 2013 Baseline. sites/default/files/cbofiles/attachments/43900_acainsurancecoverageeffects.pdf (accessed 6/29/13). 11 Other public insurance includes coverage the Veterans Health Administration, TRICARE, or the Indian Health Service. 12 In addition, unauthorized immigrants would also be excluded from and exchange-based coverage. However, the ACS, on its own, does not have adequate data to determine legal status, so legal status was not evaluated in this analysis. 13 People between 100 percent or 138 percent FPL and 400 percent FPL (depending on expansion) who currently have ESI may be eligible for exchange tax credits. However, they are only eligible if their ESI offer is unaffordable or does not meet minimum value requirements. Since the quality of ESI offers cannot be determined using Census data, we do not examine the characteristics of the ESI population in this income range. 10 CHRT Center for Healthcare Research & Transformation

11 Appendix All tables below were calculated from the 2011 American Community Survey (ACS). Current Form of Primary Coverage Primary Coverage if Expands if does not Expand (19 64 years) Uninsured , % 336, % 483, % 1,046, % Employer-Sponsored 67, % 509, % ,698, % 585, % , % Nongroup & Other Public 158, % 120, % 155, % 185, % 647, % Total 811, ,258, , , ,978, Age Distribution Age if Expands if does not Expand (19 64 years) years 136, % 521, % 36, % 72, % 828, % years 198, % 269, % 119, % 163, % 1,150, % years 176, % 169, % 107, % 143, % 1,237, % years 165, % 177, % 120, % 154, % 1,467, % years 135, % 120, % 108, % 132, % 1,295, % Total 811, ,258, , , ,978, Parent Status Parent Status if Expands if does not Expand (19 64 years) Adult with Children 375, % 287, % 179, % 242, % 2,446, % Adult Children 435, % 971, % 312, % 426, % 3,532, % Total 811, ,258, , , ,978, Gender Gender if if Expands does not Expand (19 64 years) Male 334, % 658, % 255, % 344, % 2,933, % Female 477, % 600, % 236, % 323, % 3,045, % Total 811, ,258, , , ,978, Cover 2013 The ACA s Coverage in : Demographic Characteristics and Coverage Projections July

12 Appendix (continued) Employment Status Employment Status if if does not Expands (19 64 years) Expand Employed 235, , % 351, % 470, % 3,938, % Unemployed 138, % 246, % 59, % 88, % 559, % Not in labor force 437, % 367, % 81, % 109, % 1,481, % Total 811, ,258, , , ,978, Educational Attainment Educational Attainment (25-64) if Expands if does not Expand (25 64 years) Less than High School 175, , % 44, % 66, % 460, % High School or equivalent 244, % 264, % 164, , % 1,473, % Some College or Associate s degree 211, % 268, % 168, % 218, % 1,791, % Bachelor s or higher degree 43, % 92, % 78, % 94, % 1,425, % Total 675, , , , ,150, Race/Ethnicity Race/Ethnicity if if Expands does not Expand (19 64 years) White, Non-Hispanic 499, % 906, , , % 4,682, % Black, Non-Hispanic 248, % 250, % 55, % 81, % 849, % Hispanic 45, % 67, % 27, % 40, % 247, % Other 17, % 33, % 16, % 21, % 199, % Total 811, ,258, , , ,978, Center for Healthcare Research & Transformation 2929 Plymouth Road, Suite 245 Ann Arbor, MI Phone: chrt-info@umich.edu 12 CHRT Center for Healthcare Research & Transformation