Why Do We Still Not Have Universal Coverage, Even With the ACA?

Still About 29 Million Without Health Insurance in 2016

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As expected, about 29 million U.S. residents remain uninsured, despite implementation of the ACA. hobbit/Shutterstock

In 2013, according to U.S. Census data, there were 41.8 million non-elderly uninsured residents in the United States. By 2016, that number is estimated to be 29 million. That's a significant decrease, but it's reasonable to wonder why there are still so many people without health insurance. 

The Affordable Care Act was enacted in 2010, and the bulk of its provisions were implemented between 2014 and 2016.

In order to avoid a penalty, large employers are now required to offer affordable coverage to their full-time (30+ hours per week) workers. Individuals are required to maintain health insurance coverage or face penalties on their tax returns. Premium subsidies and cost-sharing subsidies in the exchanges make coverage and care more affordable for middle-income folks. And the expansion of Medicaid makes free—or nearly free—coverage available to low-income families.

So why are there still an estimated 29 million people without health insurance in the United States? That number is according to an analysis conducted by ACA Signups in March 2016. And although it's lower than the 33 million people who were uninsured in 2014 according to U.S. Census data, it's consistent with the Congressional Budget Office's (CBO) 2012 projection that there would still be 30 million non-elderly U.S. residents without health insurance by 2022 (data pertaining to the number of people without health insurance typically refers to the non-elderly population, as Medicare covers most people once they reach age 65).

Even before the Supreme Court ruled in 2012 that the ACA's Medicaid expansion would be optional for the states, the CBO had projected that there would be 27 million non-elderly uninsured residents in the U.S. by 2022. Lawmakers and regulators knew from the start that while the ACA would make a significant dent in the number of uninsured U.S. residents (and it has), there would still be millions of people without health insurance coverage several years after full implementation of the law.

Here are some of the reasons the ACA has not resulted in universal health insurance coverage in the U.S:

Undocumented Immigrants

The ACA does not provide any sort of health insurance coverage for undocumented immigrants. Not only can they not obtain subsidies, they're forbidden from enrolling in an exchange plan at all, even if they're able to pay full price for the coverage (California passed a bill in 2016 that would allow undocumented immigrants to buy full-price coverage in the California exchange, but the state must obtain a waiver from the federal government in order to implement that provision). Undocumented immigrants are also barred from obtaining Medicaid.

The Kaiser Family Foundation estimated in 2013 that there were about 4.8 million undocumented immigrants among the uninsured population, accounting for about 15 percent of uninsured residents.

Penalty Exemptions and Lack of Enforcement

Although the ACA's shared responsibility provision (aka, the "individual mandate") requires virtually all U.S. residents to maintain health insurance coverage or face a penalty, there's a lengthy list of exemptions from the penalty, and the IRS has little in the way of tools to enforce the penalty when it does apply.

In early 2016, the IRS reported that 7.9 million tax filers were subject to the individual shared responsibility penalty because they were uninsured in 2014, but another 12.4 million tax filers were exempt from the penalty, despite being uninsured in 2014.

The penalty is supposed to be the "stick," while the ACA's subsidies are the "carrot." But as noted above, the uninsured population is more likely to qualify for an exemption than to be subject to the penalty. And even when the penalty does apply (ie, the tax filer doesn't qualify for any of the exemptions), the IRS cannot use its usual enforcement measures to collect the penalty. They can withhold it from a refund that is owed to the tax filer (or a refund that's owed in a future year), but they cannot use liens, levies, or criminal prosecution, the way they can with other types of unpaid tax debt. As a result, the penalty for not having coverage is seen by some as optional, assuming they structure their taxes so that they're never owed a refund. 

Of course, being uninsured and finding oneself in need of significant medical care is a serious problem, but a not-insignificant number of uninsured Americans are opting to cross that bridge if and when they get there, because the premiums they would have to pay for health insurance are beyond what they consider affordable.

The Coverage Gap

The ACA called for every state to expand Medicaid income eligibility to 138 percent of the poverty level (133 percent, plus a 5 percent income disregard). States would continue to have their existing state-federal funding split for the Medicaid population that was already eligible prior to expansion, but starting in 2014, the federal government would pay the full cost of covering the newly eligible population. By 2020, that declines slightly to 90 percent, but the federal government will continue to pay 90 percent in future years, while the states pay no more than 10 percent of the cost of covering the newly eligible population.

The Supreme Court ruled in 2012 that the federal government could not require states to expand Medicaid in order to continue receiving their existing federal Medicaid funding. As a result, 19 states still have not expanded Medicaid. In 18 of those states, the resulting coverage gap means that nearly three million people do not have access to subsidies in the exchange OR Medicaid (Wisconsin has not expanded Medicaid, but they use state funds to provide Medicaid to people with income below the poverty level, so there's no coverage gap).

A Lack of Understanding About the Available Options

Although some of the remaining uninsured have looked at their options and decided that they're simply too expensive and/or they don't want to enroll in coverage, there are also plenty of people who are unsure of what's available or how it could help them.

Of the people who were still uninsured in 2015, nearly half were eligible for either Medicaid, Children's Health Insurance Program (CHIP), or premium subsidies in the exchange (the other half were either in the coverage gap, undocumented immigrants, or ineligible for subsidies in the exchange due to income or an employer's offer of affordable coverage). Some of these individuals are aware of the financial assistance available to them and have decided to forego it. And some are trapped by bureaucratic nuances like the family glitch, which makes coverage unaffordable. But many don't realize that they could get free or very low-cost coverage through Medicaid or CHIP, or premium subsidies to make private coverage more affordable than it would otherwise be.

If you're among the 29 million U.S. residents who are still uninsured, it's in your best interest to check into the options available to you. If you're eligible for Medicaid or CHIP, you can enroll anytime. If you're eligible for subsidies in the exchange, open enrollment for 2017 is just around the corner—it starts November 1, 2016. 

Sources:

Congressional Budget Office, Estimates for the Insurance Coverage Provisions of the Affordable Care Act, Updated for the Recent Supreme Court Decision, July 2012.

Cornell Univerity Law School, Legal Information Institute, National Federation of Independent Business v. Sebelius, Argued March 26, 27, 28, 2012—Decided June 28, 2012.

Kaiser Family Foundation, New Estimates of Eligibility for ACA Coverage Among the Uninsured, January 22, 2016.

United States Census Bureau, Health Insurance Coverage in the United States: 2014.

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