November 30, 2023

Health Insurance

Follow Your Health Insurance

Without health insurance, poverty is just a medical bill away | by Jeremy Ney | Jul, 2023

The Affordable Care Act (ACA), often referred to as Obamacare, made tremendous strides in reducing the share of uninsured Americans. Since 2010 when the ACA was passed, the number of uninsured Americans has fallen by nearly half, from 15.5% of the population to 8.3% of the population (48 million Americans to 27 million Americans). In the last year alone, a record-breaking 16.3 million people selected a healthcare option from the ACA open marketplace. Nevertheless, over the last 7 years the share of uninsured Americans have largely stagnated, which is why we thought this would be a great topic to cover.

The #1 reason Americans cite for not having insurance is the high cost of enrollment. Access is available, but costs keep people out. Although the ACA helped households save an average $800 annually on their annual premiums, the average annual premium for employer-sponsored health insurance is $7,739 per year for single coverage and $22,221 per year for family coverage.

13 million of the 27 million uninsured Americans are in low-income households earning 200% below the federal poverty line. Elderly Americans are the least likely demographic to be insured, often because health insurance costs are much higher for this group than for younger, healthier adults. Nearly half of the uninsured population are people of color.

Check out the data

Texas has the lowest share of insured residents because it suffers from the perfect storm of healthcare challenges — poor state support, high costs, and systemic factors. Nearly 1 in 5 Texans does not have health insurance, more than double the national rate.

First, the state has not expanded Medicaid coverage, which has prevented 1.4 million families from otherwise getting health insurance. Many of these families are living in poverty. But 10 states have not expanded Medicaid as well, so what else makes Texas special?

The second arm of the perfect storm in Texas is that it has high healthcare costs. Texas is the 4th most expensive state for healthcare, with residents spending $17 out of every $100 on healthcare costs. There are fewer rules on how much doctors can charge for procedures and the state has fewer facilities, particularly in remote regions — all of which drive up costs. The impact of lost earnings and poor health in Texas is expected to rise from $57 billion in 2016 to $178.5 billion by 2040.

Finally, Texas’s large immigrant population has led to a lower share of the population receiving health insurance. Non-citizen immigrants are 3x more likely to lack insurance than are American citizens. Immigrants can be both less likely to get insurance because they are excluded from certain systems — perhaps they can’t get government issued ID cards or their jobs only recognize them as contractors — or they are excluded because high prices make insurance inaccessible.

‘Medicaid expansion’ is a major component of the Affordable Care Act, which stipulates that state can provide health insurance to residents who earn less than $18,754 (or $38,295 for a family of 4) by using federal funds to pay for that coverage. States are able offer this benefit because under the ACA the federal government agreed to reimburse states for 90% of the costs. In National Federation of Independent Business et al v. Sebelius, the Supreme Court ruled that states could not be coerced into expanding Medicaid.

Half of Americans, or 156M people, get their insurance through their employer. An additional 60 million Americans are covered under Medicare, 58 million are covered under Medicaid, and 12 million are covered under military insurance.