The Journal — October 2016
Tex Med. 2016;112(10):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, 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.
One of the goals of the Affordable Care Act aims to provide affordable health insurance through the health insurance exchange marketplace (the Marketplace). This study explores enrollments in the Marketplace in Texas and in rural vs urban areas in the East, South, and West regions of the state. Data are derived from the US Census Bureau and the Department of Health and Human Services. A total of 92.7% of eligible non-elderly adult Texans (NEATs) had enrolled in Marketplace insurance as of February 2015. Rural residents were less likely than urban residents to use the Marketplace. Most enrollees (85%) had received tax credits, and 58.6% had received cost-sharing reductions. The number of uninsured NEATs was reduced by 710,000 by 2014, which is equivalent to two-thirds of the enrollees in the Marketplace. One-third of the enrollees previously had private or employer-based insurance before enrollment into the Marketplace.
In the past decade, health insurance costs increased much faster than wages.1 The average insurance premium of employer-based health insurance for a family of 3 increased from $10,880 in 2005 to $17,545 per year in 2015.2 If the annual income of a family of 3 is $20,100, then the family must spend 87% of its income to pay the insurance premium alone, and to pay the copay and deductible of $1,260 if anyone in the family falls ill. According to the definition of poverty in the United States, such a family is not considered to be poor because the income is above the federal poverty level (FPL) of $20,090. Worse yet, insurance companies refused to cover people with diseases termed "preexisting conditions." It is not surprising that approximately 50 million people (16.3% of the total US population) had no health insurance in 2010.3
In 2010, President Obama signed ACA into law to provide affordable health care insurance and reduce the overall health care costs for individuals and the government.4 One of the key provisions of ACA is that individuals or families with incomes between 100% and 400% of the 2015 FPL (between $24,250 and $97,000 for a family of 4) will receive federal subsidies or tax credits if they choose to purchase insurance through the health insurance exchange marketplace ("the Marketplace") provided by the federal government.5,6 Under ACA, more people can be covered by employers because ACA mandates that employers with 50 or more employees must provide affordable health insurance or face tax penalties. Those employees who are not eligible to receive employer-based insurance (eg, workers in a small business with fewer than 50 employees) can purchase insurance through the Marketplace. The Marketplace provides four tiers of coverage as follows: Bronze, paying 60% of health care expenses; Silver, 70%; Gold, 80%; and Platinum, 90%. As an example, the average 2016 ACA health plan premium for a person aged 60 years (excluding any government subsidies) for a Bronze, Silver, Gold, or Platinum plan is $615.15, $744.99, $909.22, and $1,154.51 per month, respectively.7
ACA also provides subsidies toward out-of-pocket deductibles, coinsurance, and copayments in health insurance plans purchased through the Marketplace, known as cost-sharing reduction (CSR).8 The CSR subsidies are provided to persons with annual incomes between 100% and 250% of the FPL and are offered only on Silver plans (the second-lowest cost after a Bronze plan) through the Marketplace. These recipients are not required to pay back any credits received through CSR subsidies. In addition, the federal government provides advanced premium tax credits (APTCs) to those with incomes between 100% and 400% FPL.
Penalties apply to persons who choose not to purchase insurance if not covered by public or employer-based insurance and who do not qualify for an exemption. The maximum fine is equal to the national average of an annual premium for a Bronze-level plan in the Marketplace. If employers of 50 or more employees do not offer affordable insurance to their employees, they will pay a fine.
Although these provisions were designed to improve the access to health care coverage, the rate of the uninsured in Texas remained the highest in the nation in 2014 after the implementation of ACA.9 One reason is that Texas chooses not to expand Medicaid to cover those with household incomes between 18% and 100% of FPL. People within this FPL range are ineligible for tax credits or subsidies for health insurance coverage through the ACA Marketplace, resulting in "the insurance gap."10 Another potential reason for such high rates of people without insurance in Texas is the low rate of enrollment in health insurance through the Marketplace. The current study is designed to investigate the enrollment in health insurance through the Marketplace after implementation of the ACA in Texas in rural and urban areas in the three regions (East, South, and West) of the state.
Data for the percentage of the uninsured by county are derived from a 5-year American Community Survey (ACS) in 2009-2013 published in FactFinder.11 Data for the percentage of uninsured non-elderly adult Texans (NEATs) from 2010 to 2014 were derived from the Current Population Survey (CPS).12 The numbers of Texans insured through the Marketplace in Texas counties from November 15, 2014, through February 15, 2015, were obtained from the US Department of Health and Human Services.13
Total numbers of the uninsured and the population in Texas during 2009-2013 (5-year average), 2013, 2014, and 2015 are listed in the Table.
Type of Enrollment in the Marketplace
Figure 1 presents the enrollment in Marketplace insurance expressed as the percentage of the total population or the total number of the uninsured in rural vs urban areas in East, South, and West Texas, and in Texas as a whole. As of February 22, 2015, a total of 1,205,130 Texans had enrolled in health insurance coverage through the Marketplace. This accounts for 4.6% of the entire Texas population and for 20.5% of the number of Texans who were previously uninsured in 2014 (Figure 1).
The percentage of enrollment was much higher in urban (21.2% of the uninsured or 4.8% of the total population) than in rural Texas (15.1% of the uninsured or 3.3% of the total population). The rural vs urban difference existed in all regions (East, South, and West Texas). In urban areas, East Texas had the highest rates of enrollment, while in rural areas, South Texas had the highest rates, and West Texas had the lowest rates (Figure 1).
Enrollees who had coverage through the Marketplace in 2014 were given two choices for selecting coverage in 2015, including the option to be automatically enrolled in coverage consistent with their 2014 plans (ie, auto-reenrollment) or the option to choose a new plan (ie, active reenrollment). The breakdown of enrollments in the Marketplace in 2015 were as follows: new enrollments (57%), auto-reenrollments (22%), and active reenrollments (21%) in Texas as a whole. New enrollments were slightly higher in rural areas of Texas (58%) than in urban areas (56%). The percentage of new enrollments, auto-reenrollments (enrolled previously without changing insurance plan), and active reenrollments (those who were enrolled previously but chose to change insurance plan between September 2014 and February 2015) slightly differed (ranging between 56% and 58%) among East, South, and West Texas in rural and urban areas.
Percentage of People Enrolled in the Marketplace With Advanced Premium Tax Credit
Most people (85.4%) enrolled in the Marketplace took advantage of the APTC in Texas as a whole (Figure 2). The percentage differed slightly among the three regions of Texas in either rural or urban areas. The percentage was slightly higher in West (88%) vs South (87.5%) and East (84.5%) Texas in urban areas. In rural areas, the percentage was higher in South (88.3%) vs East (87%) vs West (81.3%) Texas.
Percentage of People Enrolled in the Marketplace With Cost-Sharing Reduction
Among people enrolled in Marketplace insurance, 58.6% took advantage of CSR (ie, receiving subsidies) in Texas as a whole (Figure 3). The percentage was slightly higher in people living in rural Texas (59.2%) compared with those in urban Texas (58.5%). South Texas tended to have a higher percentage of people with CSR subsidies (64% in rural and 67% in urban areas) than West Texas (55.9% in rural areas and 62.4% in urban areas) and East Texas (59% in rural areas and 56.1% in urban areas).
Percentage of People Enrolled in the Marketplace by Tier Level
Most (two-thirds or 67%) Texans who enrolled in Marketplace insurance had purchased Silver-level insurance (Figure 4). The percentage of people enrolled in the Marketplace with Silver-level insurance was slightly higher in rural vs urban Texas (67% vs 66%). When looking at Marketplace enrollment by region, the percentage of enrollees with Silver-level insurance was higher in rural (67%) than in urban (64%) areas in East Texas. However, the percentage was lower in rural vs urban areas in South (71% vs 73%) and West (65% vs 69%) Texas. South Texas tended to have a higher percentage of people with Silver-level insurance than East or West Texas in both rural and urban areas.
The number of uninsured NEATs with annual household income between 100% and 399% FPL without health insurance, who were eligible for enrollment in the Marketplace, was decreased by 791,000 from 2012 to 2014 (Table). The reduction in the number of the uninsured NEATs could be due to Marketplace enrollment. However, this reduction only accounted for 65.6% of the total number of enrollment in the Marketplace (1,205,130). This suggest that 34.4% of the number of people enrolled in the Marketplace switched from private insurance.
The present study showed that 1,205,130 Texans had enrolled in health insurance through the Marketplace as of February 2015, the end date of the data analyzed. This number of enrollees accounted for 4.6% of Texas' total population and for 20.5% of people who were previously uninsured in 2014. According to the Kaiser Family Foundation's recent estimates, 1,305,546 Texans were eligible for enrollment in the Marketplace in December 2015.14 Thus, most (92.3%) of Texans who were eligible had enrolled in the Marketplace, and only 7.7% of eligible Texans had failed to enroll by February 2015. More eligible Texans may have chosen to enroll by the deadline of December 17, 2015; however, this data was not available. Although 1.2-plus million Texans enrolled in the Marketplace accounted for 4.6% of the total Texas population in 2014, the percentage of the uninsured NEATs with household income between 100% and 399% FPL was reduced by 710,000 from the highest number of uninsured in 2012 after enrollment into the Marketplace in Texas. This suggests that 34.4% of the number of people enrolled in the Marketplace might have switched from private or employer-based insurance to Marketplace insurance.
Among those who were enrolled in the Marketplace, most (57%) were new enrollments (enrolled between November 15, 2014 and February 15, 2015), while the percentages of active reenrollment and auto-reenrollment were similar (21% vs 22%). Most of the enrollees (greater than 80% in any region) were able to take advantage of the APTC and or cost-sharing reduction, thus reducing their overall costs for health care coverage.
Interestingly, rural areas across the state had lower Marketplace enrollment rates than urban areas. The mechanism for this phenomenon is currently unknown. It may be due to the fact that incomes in rural areas are significantly lower than in urban areas.15 The median household income was only $41,198 in rural areas in the United States in 2012 as compared with $52,988 in urban areas. The median incomes in rural areas declined significantly in terms of inflation-adjusted value in the 5 years prior to 2012, with an overall decrease of 8.4 percent since 2007.16 Therefore, the percentage of income spent on health care was much higher in rural vs. urban areas. Although the Marketplace provides tax credits and incentives, the poor in rural areas still may not be able to afford the costs. Additionally, few rural areas had employers with greater than 50 employees, which are required under the ACA to provide health insurance to employees. People working in companies with fewer than 50 employees were required to purchase their own health insurance. All these issues may be contributing factors to the lower rates of enrollment in the Marketplace in rural areas in Texas.
When considering the rates of enrollment in the Marketplace as a percentage of the total population, we found differences among the three regions of Texas. In urban areas, East Texas had the highest rates of enrollment, followed by the South and West regions. In rural areas, South Texas had the highest enrollment rates, followed by East and West Texas. However, when enrollment is expressed as the percentage of the total number of the uninsured, the rate in South Texas is no longer higher than West Texas in urban areas. This is because the overall rate of people without health insurance was higher in South Texas (a larger denominator, resulting in a reduced percentage). The percentages of people taking advantage of the APTC or cost-sharing reduction were higher in South Texas in both rural and urban areas compared with East or West Texas.
In conclusion, more than 1.2 million Texans had enrolled in the Marketplace as of February 2015. Enrollment rates were lower in rural vs urban areas in all regions (East, South, and West) of Texas, possibly because of lower incomes, higher rates of people in the insurance gap, and lower rates of employer-sponsored insurance in rural areas. The number of uninsured NEATs was reduced by 710,000 by 2014, which is equivalent to two-thirds of the enrollees in the Marketplace. Approximately one-third of the enrollees previously had private or employer-based insurance before enrollment into the Marketplace.
- Collins SR, Gunja M, Doty MM, Beutel S. How high is America's health care cost burden? Findings from the Commonwealth Fund Health Care Affordability Tracking Survey, July-August 2015. The Commonwealth Fund; 2015. http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2015/nov/1844_collins_how_high_is-americas_hlt_care_cost_burden_tb_v1.pdf. Accessed January 13, 2016.
- Kaiser Family Foundation. 2015 Employer Health Benefits Survey. Menlo Park, CA. http://kff.org/report-section/ehbs-2015-summary-of-findings/. Accessed March 1, 2016.
- US Census Bureau. Income, poverty, and health insurance coverage in the United States: 2010 — Tables & Figures. https://www.census.gov/hhes/www/hlthins/data/incpovhlth/2010/tables.html and https://www.census.gov/hhes/www/hlthins/data/incpovhlth/2010/table10.pdf. Accessed February 3, 2016.
- Blumenthal D, Collins SR. Health care coverage under the Affordable Care Act ― a progress report. N Engl J Med. 2014;371(3):275-281.
- Georgetown University Health Policy Institute. Center for Children and Families. 2015 Federal Poverty Level Guidelines. http://ccf.georgetown.edu/wp-content/uploads/2015/01/2015-Federal-Poverty-Guidelines.pdf. Accessed March 5, 2016.
- Obamacare Facts. Summary of Provisions in the Patient Protection and Affordable Care Act. http://obamacarefacts.com/summary-of-provisions-patient-protection-and-affordable-care-act/. Accessed January 6, 2016.
- Geneson, J. & Coleman, K. 2016 Affordable Care Act market brings higher average premiums for unsubsidized. HealthPocket Website. https://www.healthpocket.com/healthcare-research/infostat/2016-obamacare-premiums-deductibles#.V7Mwn_krJph. Published November 2, 2015. Accessed August 16, 2016.
- Obamacare Facts. Cost Sharing Reduction Subsidies (CSR). http://obamacarefacts.com/insurance-exchange/cost-sharing-reduction-subsidies-csr/. Accessed January 6, 2016.
- Walters E. Texas' uninsured rate dips, remains highest in nation. The Texas Tribune. September 16, 2015. http://www.texastribune.org/2015/09/16/texas-uninsured-rate-dips-remains-highest-nation/. Accessed February 10, 2016.
- US Census Bureau. Income, poverty and health insurance coverage in the United States: 2014. https://www.census.gov/newsroom/press-releases/2015/cb15-157.html. Accessed January 10, 2016.
- US Census Bureau. 2009-2013 5-year American Community Survey. http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_14_5YR_S2702&prodType=table. Accessed December 1, 2015.
- Kaiser Family Foundation. http://www.countyhealthrankings.org/app/texas/2015/overview. Accessed December 1, 2015.
- US Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. Plan Selections by County in the Health Insurance Marketplace July 2015 (Updated). https://aspe.hhs.gov/basic-report/2015-plan-selections-county-health-insurance-marketplace. Accessed March 23, 2016.
- Kaiser Family Foundation. State Marketplace Statistics. http://kff.org/health-reform/state-indicator/state-marketplace-statistics/. Accessed December 1, 2016.
- US Department of Agriculture, Economic Research Service. Geography of poverty. http://www.ers.usda.gov/topics/rural-economy-population/rural-poverty-well-being/geography-of-poverty.aspx. Accessed January 10, 2016.
- DeNavas-Walt C, Proctor BD, Smith JC. Income, poverty, and health insurance coverage in the United States: 2012. Washington, DC: Economics and Statistics Administration, US Census Bureau; September 2013:60–245. https://www.census.gov/prod/2013pubs/p60-245.pdf. Accessed April 13, 2016.
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