Medical Debt

Uninsured Rate Highest Since 2014: Survey

January 24, 2019 1:49 pm

Gallup blamed the increase on rising premiums in recent years and policy decisions, including reduced outreach and advertising spending.

Jan. 23—The uninsured rate rose in fourth quarter of 2018 to its highest level since the first year of the coverage expansion provided by the Affordable Care Act (ACA), according to a Gallup survey.

By the end of 2018, 13.7 percent of U.S. adults were uninsured, which was the largest share since the first quarter of 2014. The latest rate remains below the 18 percent high point recorded before implementation of the ACA’s individual health insurance mandate in 2014.

The 2018 level represented an increase of 7 million people from the 10.9 percent rate achieved in 2016.

The results were based on quarterly surveys of about 28,000 residents.

The greatest increases in uninsured status occurred among women, people in households with annual incomes of less than $48,000 and among young adults under the age of 35. The uninsured rate for the latter group was more than 21 percent—a 4.8-point increase from two years earlier. The rate among women overall—still lower than men—increased from 8.9 percent in late 2016 to 12.8 percent at the end of 2018.

Among geographic regions, the East was the only one of four regions nationally where the rate was effectively unchanged since the end of 2016. The South, which has always had the highest uninsured rate, had a 3.8-point increase to 19.6 percent.

Influencing Factors

Gallup cited rising premiums and policy decisions for the increases since 2016.

Specifically, steep premium and out-of-pocket increases occurred each year until premiums stabilized for 2019 coverage. However, the earlier increases left many unsubsidized enrollees unable to afford coverage.

Among policy impacts was the Trump administration’s withdrawal of most outreach advertising and enrollment assistance grants, and its decision to shorten the open enrollment period.

Enrollment in the ACA federal insurance marketplaces peaked in 2016 at 9.6 million consumers, before declining to 8.4 million in 2019.

Dark Outlook

Some healthcare experts warn that rates of uninsured could continue to rise.

A major challenge could come from a lawsuit striking down the entire ACA. In December, a federal judge in the Northern District of Texas ruled in Texas, et al. v. United States, et al. that the entire ACA was rendered unconstitutional after Congress in 2017 repealed the tax penalty enforcing the law’s individual mandate.

“The nation’s essential hospitals always will work to meet their mission of caring for those who face economic and social hardships,” Bruce Siegel, MD, president and CEO of America’s Essential Hospitals, said after the decision. “But the crushing rise in the number of uninsured patients likely to follow this decision, absent a higher court’s reversal, would push these hospitals to the breaking point. Communities across the country are in jeopardy.”

The decision has been appealed by a group of state attorneys general.

The numbers of uninsured also could increase this year with the end of the tax penalty for the individual mandate.

The larger numbers of uninsured will increase the need for hospitals to focus on the financial impacts. A recent TransUnion Healthcare analysis found that 30 percent of self-pay accounts generated more than 80 percent of the self-pay revenue collected by hospitals.

Patient balances after insurance (PBAI) have been steadily rising—from 8 percent of the total bill responsibility in the first quarter of 2012 to 12.2 percent in the first quarter of 2017, according to TransUnion Healthcare.

“Re-evaluating a hospital’s current approach can be a challenge for revenue cycle leaders, but it can result in a great reward by maximizing the healthcare provider’s overall return,” said Dave Wojczynski, president of TransUnion Healthcare. “Determining which patients or accounts may present the best opportunities for payment is just one way a healthcare provider can increase their chances of maximizing reimbursements for services rendered.”

New Options

Among the emerging coverage options that may help some newly uninsured individuals is allowing residents to pay premiums to “buy in” to Medicaid, according to published reports.

The 10 states considering buy-in might not offer the full range of benefits available to traditional beneficiaries, but the option may appeal to those unable to afford coverage under the ACA marketplace.

One of the states, Nevada, passed a Medicaid buy-in program in 2017, but it was vetoed. A new version of the bill is expected to be introduced and passed, said advocates.

Such efforts come as popular sentiment appears more favorable to Medicaid expansion. In November, voters in Nebraska, Idaho, and Utah approved referendums to implement the ACA Medicaid expansion, which would add an additional 300,000 individuals to the Medicaid rolls.

“The support of voters in these states suggests that there could be further expansion among the 14 states that until now have not adopted it,” noted a new Moody’s analysis (subscription required).

To date, 36 states and the District of Columbia have expanded Medicaid eligibility, which added 12.7 million people to the Medicaid rolls and brought total enrollment to about 75 million beneficiaries.

Another positive development is the growing number of insurance plans sold in the ACA marketplace and the non-government-operated individual marketplaces following repeated annual declines in plan participation since 2015. This greater number of competitors contributed to average premiums in ACA marketplaces declining in 2019 for the first time.

Participation in the federally operated marketplaces declined from 8.8 million to 8.5 million—far less than experts had forecast.

A recent study from the Kaiser Family Foundation found 4.2 million uninsured people nationwide could qualify for subsidies that would get them a premium-free bronze plan. Although bronze plans have an average deductible of $6,258, some of those eligible for premium subsidies also could qualify for out-of-pocket cost subsidies.

Commercial insurers also have embraced the use of short-term plans expanded by the Trump administration, with many of the largest carriers launching plans of that type. Hospitals have warned about the financial impacts of such plans, which can exclude coverage for some of the range of services required by the ACA for most plans.

Moody’s also saw as positive the Trump administration’s efforts to expand health reimbursement arrangements (HRAs) to allow employers, especially small employers, to pay employees for health insurance premiums with pre-tax dollars. The U.S. Treasury Department estimated the new HRA policy would lead 800,000 employers to provide those benefits to more than 10 million employees.

“While some employers that currently provide group insurance might shift to this option, and others are already buying insurance, we believe this HRA expansion would add significantly to the insurance rolls without hurting the risk pool,” Moody’s wrote.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


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