The Health Insurance Gap After Implementation of the Affordable Care Act in Texas Texas Medicine March 2017

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The Journal — March 2017

Tex Med. 2017;113(3):e1. 

By Gordon Gong, MD, MS; Cassandra C. Huey, MS; Coleman Johnson, JD; Debra Curti, MEd, RHIA; and Billy U. Philips Jr, PhD, MPH

Gordon Gong, MD, MS; Coleman Johnson, JD; Debra Curti, MEd, RHIA; and Billy U. Philips Jr, PhD, MPH; F. Marie Hall Institute for Rural and Community Health, Texas Tech University Health Sciences Center, Lubbock, Texas, and Cassandra C. Huey, MS, The F. Marie Hall Institute for Rural and Community Health, and Department of Human Development and Family Studies, College of Human Sciences, Texas Tech University, Lubbock, Texas. 

Send correspondence to Billy U. Philips Jr, PhD, MPH, Executive Vice President and Director, The F. Marie Hall Institute for Rural and Community Health, Marie Hall Chair and Professor, Family and Community Medicine, Texas Tech University Health Sciences Center, Suite 2B440, 3601 4th St, MS 6232, Lubbock, TX 79430-6232; e-mail: billy.philips[at]ttuhsc[dot]edu

Households with incomes between 18% and 99% of the federal poverty level (FPL) are ineligible for Medicaid or enrollment in the health insurance exchange marketplace in Texas, resulting in the health insurance gap. We sought to determine the number of non-elderly adult Texans (NEATs) aged between 18 and 64 years in the insurance gap in rural vs urban areas in East Texas, West Texas, and South Texas.  Data were obtained from the US Census Bureau website. In 2014, there were 1,101,000 NEATs in the insurance gap, accounting for 24.5% of all uninsured persons in Texas. The gap was significantly higher in rural vs urban areas in East and South Texas and in Texas as a whole. Large coverage gaps in states like Texas not expanding Medicaid under the Affordable Care Act pose major hurdles to reducing the number of uninsured individuals in these states.

Introduction

Approximately 50 million people (16.3% of the total population) in the United States had no health insurance in 2010.1 The high rate of the uninsured was in part due to the disproportionate increase in insurance costs relative to wage increase.2 Insurance premiums increased 4% annually between 2005 and 2015, much higher than the 1.9% wage increase.3 The average insurance premium of employer-based health insurance for a family of three increased from $10,880 in 2005 to $17,545 per year in 2015.3 People were further burdened by the practice of insurance companies denying coverage to those with diseases called preexisting conditions. As a result, 80 million adults in the United States during 2012 did not seek medical care when sick and did not fill drug prescriptions as they could not afford the costs.4 Consequently, uninsured adults are more likely to have poor health, low quality of life, and premature death than are those with health insurance.5

To reduce the number of uninsured Americans, to provide high-quality affordable health care insurance to more people, and to reduce the overall health care costs for individuals and the government, in 2010, President Obama signed into law the Patient Protection and Affordable Care Act, also known as the Affordable Care Act (ACA).6 Among the key provisions of the ACA are the following: Insurers must offer the same rates regardless of gender or preexisting conditions and meet minimum standards set by the ACA for health insurance policies. Young adults (ages 19 to 26) may remain as dependents on a parent's insurance policy. Federal government provides health insurance options to individuals through the health insurance exchange marketplace ("the Marketplace") through which individuals and families with incomes between 100% and 400% of the federal poverty level (FPL) will receive federal subsidies or tax credits.7 The ACA originally called for an expansion of Medicaid to cover those with household income up to 138% of FPL (annual income $16,243 for an individual or $27,724 for a family of three).8 However, in June 2012, the Supreme Court ruled the expansion optional for states.9 Employers with 50 or more employees are required to provide affordable insurance options for their workers or pay a tax penalty. All individuals must have health insurance or pay a penalty if they are not covered by employer-sponsored health insurance, Medicaid, Medicare, or other public or private insurance. 

The ACA is a major health care reform after the establishments of the partially government-funded insurance programs Medicaid and Medicare in 1965, and the Children's Health Insurance Program (CHIP) in 1997.10 The ACA expands and reforms government programs and provides incentives for private health insurance plans (ie, employer-based and direct-purchase). In 2014, more than one-third (34%) of people in the United States were covered by government insurance plans, 49% by employer-based insurance, 6% through direct-purchase, and 10% were uninsured (reduced from 16.3% in 2010).11,12           

Medicaid is a public health care insurance program for the disabled, the blind, and low-income families with children (varying by states between 18%-100% of the FPL) and is funded jointly by federal and state governments. The federal government provides matching funds varying by states from 50% to 75%, with an average of 57% in 2011.13 As of September 2015, some 20 states including Texas opted not to expand their Medicaid programs. Among states not expanding Medicaid, the eligibility limit of annual income for Medicaid coverage ranges from 18% to 100% FPL, with a median at 44% FPL ($8,840 for a family of three as an example) for families of dependent children. Adults without children are still ineligible.8 Reasons for not expanding Medicaid include a concern for increased spending at the state level.14 Although the ACA provisions make the federal government responsible for covering 100% of the cost of Medicaid for newly enrolled individuals until 2016, the percentage of costs the state will pay gradually increases to 5% in 2017, 7% in 2018, 8% in 2019, and 10% in the following years.15 Thus, among states not expanding Medicaid, an "insurance gap" exists for individuals with income above the eligibility limit for Medicaid, but below the limit for receiving tax credits through the Marketplace (100% to 400% of FPL).16 In Texas, the insurance gap includes those with an income between 18% and 100% FPL (annual income $3,616 and $20,090 for a family of three with at least one child, respectively, or $2,118 and $11,770 for an adult without a child, respectively). 

As part of Medicaid, CHIP provides insurance to children in families with income above the Medicaid income eligibility thresholds (18%-100% FPL). The median household income eligible for CHIP was 235% FPL among states. The federal government provides 70% (states pay 30%) for CHIP, higher than the federal government's share of an average of 57% for Medicaid.17 In 2013, more than 28 million children were enrolled in Medicaid, and 5.7 million who were not eligible for Medicaid (with household income above the limit, 18%-100% FPL) were covered by CHIP.17 There were still 5.2 million children eligible for Medicaid or CHIP who remained unenrolled in the United States, and many children were not eligible for Medicaid or CHIP.

Medicare is a health insurance program provided by the federal government mainly to persons aged 65 years or older and to certain persons with disabilities. Most people do not pay a monthly premium for Part A (hospital costs); however, they are required to pay a deductible before Medicare coverage begins.18 The average deductible for Part A was $1,260 in 2015.18 Most people pay a monthly premium of $104.90 for Part B (medical costs).18 Medicare benefits can also be combined with the federally funded programs of TRICARE and CHAMPVA that provide coverage for active duty military, veterans, and their families.19 In 2014, 2% of Americans received health insurance through these military coverages.11 Employer-based health insurance is currently the largest source of health insurance in the United States. Approximately 55.4% of non-elderly (aged 18-64 years) Americans relied on this type of coverage between 2013 and 2014.20

Direct-purchased insurance is the only choice for people who are not covered by employers and who are ineligible for public health care. They accounted for 14.6% of the population between 2013 and 2014.20 The uninsured accounted for 16.3% and 10% of the total population in 2010 and 2014, respectively.1,20 In 2010, Hispanics had the highest rate of people without insurance (30.7%), much higher than non-Hispanic whites (11.7%), followed by African Americans (20.8%) and Asians (18.1%). The rate of the uninsured increased as income decreased in 2010.1

Texas had the highest rate of uninsured people (19.1%, >5 million) in the nation (US Census Bureau, 2015a) in 2014.20 The current study examines the percentages of people in "the insurance gap" among the non-elderly population by rural vs urban residences and by region (West vs East vs South Texas). 

Methods

Data for the number of the uninsured and the number of those in the insurance gap in entire Texas from 2010 to 2014 were derived from Current Population Survey (CPS), a website of the US Census Bureau.21 Data at county level in rural and urban areas of the three regions of Texas (East Texas, West Texas, and South Texas) were derived from a 3-year American Community Survey (ACS) in 2011-2013 published in FactFinder, the US Census Bureau's website.22 Only 120 of the 254 counties in Texas were surveyed by ACS. 

Texans with annual household incomes between 18% and 99% of FPL without health insurance were in the health insurance gap. However, the FactFinder data provides insurance information below 50%, 50%-99%, and so on, up to 400% of FPL but does not provide health insurance status of Texans with household incomes between 18% and 99% of FPL. Since children (aged <18 years) and the elderly (65 years or older) with household incomes below 100% of FPL were covered by CHIP and Medicare, respectively, the current study focuses on the health insurance gap among non-elderly adult Texans (NEATs) aged between 18 and 65 years without insurance. In fact, uninsured NEATs with an annual household income below 100% FPL without insurance are in the health insurance gap because those with a household income < 8% FPL were insured by Medicaid. 

The designations of urban vs rural (ie, nonmetropolitan vs metropolitan) counties are defined by the Texas Department of State Health Services.23 We classified Texas into three regions: East, South, and West, as previously described.24 East Texas had 109 counties, West Texas 108, and South Texas 37. The boundaries of West, South, and East Texas are similar to those of the three area health education centers in Texas.24

Results

The number of uninsured NEATs with household income below 100% of FPL decreased by 433,000 from 1,534,000 in 2010 to 1,101,000 in 2014 (Table 1). Since those with household incomes below 18% of FPL are eligible for Medicaid, we assume that the 1,101,000 NEATs with household incomes below 100% of FPL without health insurance are in the insurance gap. This accounts for 24.5% of all the uninsured Texans (n=4,499,000) in 2014 (Table 1). We also calculated the number of NEATs in the insurance gap by subtracting the number of NEATs with incomes below 18% of FPL from all those with incomes below 100% of FPL as reasoned below.

Some of those with a household income below 18% of FPL might not have been enrolled in Medicaid. Unfortunately, Current Population Survey does not provide such a category as the uninsured among NEATs with household incomes below 18% of FPL. To explore this likelihood, we investigated the percentage of children without insurance in households with incomes below 50% of FPL although they are eligible for CHIP insurance coverage. Table 2 shows that 369,000 and 205,000 children in households with incomes below 100% FPL in 2010 and 2014, respectively, had no health insurance even though they were eligible for CHIP. Those living in households with incomes below 50% of FPL numbered 89,000 in 2014, which accounted for 43% of uninsured children below 100% of FPL. Based on the pattern of change in the number of uninsured children for a 25% change in FPL (ie, increment in the number of children at 50%-75% FPL and 75%-99% FPL in Table 2), it is assumed that no more than 44,500 children (half of the number of those with incomes less than 50% of the FPL) in households with incomes less than 25% of the FPL were uninsured in 2014. This number, 44,500 children, is likely an overestimate of uninsured children living in households with incomes <18% of FPL. 

To apply the above reasoning from children to NEATs, we assume that half of the 567,000 NEATs with household incomes less than 50% of the FPL listed in Table 1 (ie, 283,500 NEATs) had household incomes below 18% of FPL and were not enrolled in Medicaid in 2014. The number of uninsured NEATs with incomes below 100% FPL subtracted by the number of uninsured NEATs with incomes below 18% of FPL is 1,101,000 – 283,500 = 817,500, which is assumed to represent the number of NEATs in the insurance gap without insurance (with a household income between 18% and 99%). This is 74.4% of the uninsured NEATs with incomes below 100% FPL. That is, those with incomes below 18% of the FPL without health insurance accounted for 25.6% of the uninsured NEATs with incomes below 100% FPL in 2014.

To investigate the number of Texans in the insurance gap at county level, we used American Community Survey (ACS) data. We first used the number of NEATs without insurance with household incomes below FPL as the number in the insurance gap. 

Figure 1 shows the map of distribution of NEATs in the insurance gap in terms of percentage among all uninsured Texans in the 120 counties. Counties in nonwhite colors were surveyed by ACS while counties in white color were not surveyed. A smaller percentage of counties in West Texas were surveyed compared with the East Texas and South Texas. The mean total population of the 120 counties was 24,535,580 in the 3 years, which accounted for 97.6% and 95.6% of Texas' total population in 2010 and 2013, respectively. Although 134 counties were not surveyed, their total population accounted for only 2.3% and 4.4% of Texas's total population in 2010 and 2013, respectively, because all counties not surveyed were rural counties.

Between 2011 and 2013 in the 120 counties surveyed, 1,324,830 NEATs were in the insurance gap, accounting for 24% of the 5,523,268 uninsured Texans surveyed. The percentage of NEATs in the insurance gap was more than two times that (10%) in the United States (Figure 2). The insurance gap was larger in rural vs urban areas in entire Texas (26.4% vs 23.8%), East Texas (25.9% vs 22.4%), South Texas (29.8% vs 28.6%), and West Texas (23.3% vs 23.7%). The insurance gap was larger in South Texas in both rural and urban areas compared with East Texas and West Texas.

We also estimated the percentage of NEATs in the insurance gap, subtracting the estimated percentage (25.4% in Texas) of NEATs with incomes below 18% of FPL without insurance (not enrolled in Medicaid) for rural and urban areas in the three regions of Texas (Figure 3). 

Discussion

This study showed that 1,101,000 non-elderly adults in the insurance gap accounted for 24.5% of all uninsured persons in Texas by the end of 2014.  Uninsured Texans in the insurance gap accounted for about one-fourth of all the uninsured. At least 18% of uninsured Texans fell in the insurance gap as a more conservative estimate (ie, those with household incomes less than 18% of FPL without insurance are subtracted).

The results of the present study also demonstrated that the insurance gap was larger in rural vs urban Texas. South Texas had the highest rate of people in the insurance gap compared with East and West Texas in both rural and urban areas. The large percentage of people in the insurance gap in South Texas may be due to the higher percentage of Hispanics. According to the 2010 US Census, Hispanics in urban counties accounted for 68%, 51%, and 30% in South, West, and East Texas, respectively, and in rural counties for 71%, 41%, and 17%, respectively.22 When looking at the rural-urban difference by Texas region, we found that the percentage of people in the insurance gap among the uninsured was higher in rural vs urban areas only in South Texas and East Texas, but not in West Texas. 

Note that 24.5% of the uninsured NEATs fell into the insurance gap, while the national level was only 10%. More than a million NEATs cannot be covered by Medicaid or by the ACA.  The large percentage in the insurance gap is due to the fact that Texas is one of the two states that set the income eligibility for Medicaid to 18% of FPL or lower, while the median level was 44% of FPL nationally. 

Of the 20 states opting to not expand Medicaid eligibility, Texas has the highest percentage (25%) of adults in the insurance gap in the United States,9 which is close to our estimate. Texas also had a larger percentage of Hispanic and Latino residents (38.6%) than the national average (17.4%),25 who are more likely to be uninsured, largely due to immigration status and language barriers.26,27 Undocumented immigrants are not eligible for insurance coverage through Medicaid or the Marketplace.28 Thus, they are not counted in the calculation of the uninsured or those in the insurance gap. 

In conclusion, among the three regions (East, West, and South), South Texas had the highest rates of the uninsured and those NEATs falling in the insurance gap. Both of these rates were higher in rural than urban South Texas. The rate of people falling in the insurance gap was much higher in Texas than the national level largely due to the stringent eligibility limit for enrolling in Medicaid that was not expanded in Texas.

References  

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