By Ron Reed / Guest Column
The objective of the Affordable Care Act, which was passed in 2010, was to increase coverage to the uninsured by expanding Medicaid and providing tax credits to make private insurance more affordable.
In addition, the ACA increased taxes and cut payments to providers to help pay for this expanded coverage, and encouraged the formation of Accountable Care Organizations (ACOs). These groups of doctors and hospitals take on the risk and cost for attributed Medicare beneficiaries, and agree to manage the care within financial and quality targets. Savings compared to historical costs are shared between the ACO and Medicare.
In 2013, prior to coverage being expanded, 41.7 million non-elderly adults were uninsured, largely because they could not afford health insurance. Eighty-six percent of the uninsured were adults between the ages of 18-64, and 85 percent were from low- or moderate-income families – that is, they had incomes between 100-400 percent of federal poverty guidelines.
Coverage for this group was increased largely by expanding Medicaid to adults up to 138 percent of the federal poverty guidelines, and by providing tax credits to individuals between 100-400 percent of the federal poverty guidelines.
According to the Kaiser Family Foundation, as of 2015, there are now 32Â million uninsured, non-elderly adults in the United States. Of these, nearly 8.6 million, or 27 percent, are eligible for Medicaid; 6.9 million, or 22 percent, are eligible for tax credits; and 13.6 million, or 42 percent, are ineligible due to their income, an employer-sponsored insurance offer or citizenship.
In Iowa, there are 188,000 uninsured, non-elderly adults. Of these, 88,000, or 47 percent, are Medicaid eligible; 30,000, or 16 percent, are tax credit eligible; and 71,000 are ineligible due to income level, employer-sponsored insurance being offered or citizenship.
Despite the improvement in coverage, about 3 million individuals, or 10 percent of uninsured adults nationwide, still fall in the coverage gap due to some states not expanding Medicaid.
A U.S. Supreme Court decision in 2012 made Medicaid optional for states, and 23 of them decided against expanding the program in 2014. States that did expand Medicaid had roughly the same number of uninsured non-elderly in 2015 (16.3 million) as the states that did not expand Medicaid (16.1 million). Consequently, nearly one in five uninsured, non-elderly persons in the states that did not expand Medicaid fell into the coverage gap.
As enrollment opens for 2016, there are several developments to be anticipated. The number of enrollments nationally and in Iowa is expected to increase. According to Medicaid.gov, pre-ACA enrollment in Medicaid in Iowa was 493,515. As of August 2015, enrollment was 604,957, a 23 percent increase. As eligible uninsured individuals learn more about Medicaid expansion, enrollment should increase.
Moreover, the rates for the second-lowest cost plan on the ACA exchanges – also known as the marketplace – will increase between 2015-2016, although tax credits will temper those increases. In the U.S., the average silver plan will increase by 10.1 percent; after tax credits, it will decrease 0.2 percent.
In Iowa, the average plan will increase from $246 a month to $284 a month, a 15.4 percent increase; after tax credits, Iowa’s average rates will decrease 1 percent.
Finally, individuals will be required to buy coverage under the ACA or pay a penalty. The penalty is $695 per adult and $347.50 per child (up to $2,085 for a family), or 2.5 percent of family income, whichever is greater.
The objective of the Affordable Care Act – to increase the number of insured – has been partially met. The number of uninsured has decreased from 41.7 million to 32 million. Nearly half of those 32 million are eligible for Medicaid or tax credits, but have not yet availed themselves to these programs. The statistics are similar in Iowa – of the state’s 188,000 uninsured, 118,000 are eligible for Medicaid or tax credits.
As people enroll in health plans for 2016, it will be interesting to note whether the number of uninsured will decrease even further, particularly for individual coverage through the exchange.
Ron Reed is president and CEO of Mercy Iowa City.
