The Dynamics of Health Insurance Post-ACA

We know that the number of uninsured in the United States has decreased significantly (by 16.9 million) since the Affordable Care Act (ACA), but how are people moving between different types of insurance coverage?

Despite intense focus on Medicaid expansion and the health care Marketplaces as key elements of the ACA, employer-sponsored insurance, which 9.6 million uninsured Americans obtained between September 2013 and February 2015, was responsible for the greatest reduction of uninsured. This could suggest that the declining uninsured rate is due more to job growth in an improving economy than to the ACA. However, a similar trend was seen in Massachusetts after they expanded health coverage in 2006 prior to the recession, so the increase in employer-sponsored insurance coverage could also be due to provisions of the ACA that penalize employers for not offering insurance.

Still, critics of the ACA have expressed concern that the penalties for employers (which were delayed and will only begin at the end of 2015) are too low and therefore incentivize businesses to stop offering health insurance and instead send employees to the Marketplaces. However, only 3.4 million Americans (3%) moved from employer-sponsored plans to Marketplace plans, so this does not appear to be a real threat.

An important trend to watch is churn, or the movement of people between different types of insurance. This happens when people change jobs. Between 2013 and 2015, 24.6 million people (12%) remained insured but changed the type of insurance they had, and 5.9 million (3%) became uninsured.

Churn especially affects people whose incomes fall close to the eligibility levels for Medicaid or Marketplace subsidies, as small changes in income can cause them to gain or lose eligibility. Churn affects access to health care, because a new insurance plan may not be accepted by the doctor someone was seeing with their old plan.

Now that the subsidies provided by the ACA are no longer under threat and the Marketplaces will live on, health care policymakers will keep a close eye on the rates of uninsured, access to care, and churn as the American health system continues to evolve.

commentary by Laura Medford-Davis

Abstract

We examined insurance transitions between September 2013 and February 2015, before and after the Affordable Care Act’s coverage-related provisions took effect in 2014. We found that 22.8 million people gained coverage and that 5.9 million people lost coverage, for a net increase of 16.9 million people with insurance. Project HOPE—The People-to-People Health Foundation, Inc. PMID: 25947173. Carman KG et al. Health Aff. 2015; 34(6): 1044-8.