Co-authored by Sara Collins
The Supreme Court decided last week in favor of the government in the King v. Burwell case. The case had contested the legality of the Affordable Care Act’s premium subsidies in the 34 states that have federally facilitated marketplaces.1 The decision means that the estimated 6.4 million Americans who are currently receiving subsidies in these states will continue to benefit from affordable health insurance.
A new survey from The Commonwealth Fund shows what a difference this new marketplace insurance and new Medicaid coverage have made in millions of people’s lives across the country. In the survey, more than half of working-age adults who currently have coverage either through marketplace plans or Medicaid were uninsured prior to gaining this coverage; of those more than six of 10 had been without insurance for a year or longer.
According to the survey, this new health insurance has improved people’s ability to get the health care that they need. Among adults with new coverage who have used it to go to the doctor or a hospital, or to fill a prescription, more than six of 10 reported that they would not have been able to access or afford this care before. While people who were uninsured previously were more likely to say they could not have gotten this care before, nearly half of those who had health insurance when they enrolled said the same.
But as critical as the ruling is, significant challenges remain to realize the potential of the law’s sweeping insurance reforms and expansions. This next set of challenges includes continuing to increase the number of Americans who have health insurance, keeping premiums affordable, and protecting people from high out-of-pocket costs.
The Commonwealth Fund survey finds that as many as 25 million adults remain uninsured. Nearly six of 10 remaining uninsured adults are living in the 22 states that have yet to expand eligibility for their Medicaid programs, as allowed under the Supreme Court’s 2012 Affordable Care Act decision. People in these states with incomes under 100 percent of poverty are in a coverage gap: they are ineligible for premium subsidies through the marketplaces because Congress assumed every state would expand Medicaid. Uninsured rates among people in this income group in nonexpansion states have barely budged from 2014, while uninsured rates have fallen significantly for poor adults in states that have expanded their programs.
But the Medicaid expansion is not the only reason why people who are eligible for the law’s coverage options are not yet enrolled. The survey finds that many uninsured adults are either unaware of the coverage options available to them or have reasons for not exploring their insurance options, including uncertainty about whether they can afford coverage. Future gains in coverage will be dependent on states finding ways to expand eligibility for Medicaid and the pursuit by federal and state policymakers of targeted outreach and education efforts to help those eligible enroll.
Keeping premiums and deductibles affordable for consumers will be an ongoing challenge for federal and state governments, and health industry stakeholders. A Commonwealth Fund report found that a majority of people with marketplace plans found their premiums very or somewhat easy to afford. But they were less likely than people with employer coverage to view their premiums as affordable. While marketplace premiums did not change on average in 2015, there was significant variability across states.
Similarly, while the law’s cost-sharing subsidies have been effective in reducing deductibles and copayments for people in marketplace plans with lower incomes, many who are above the subsidy thresholds are left with high deductibles. But the use of high deductibles in marketplace plans reflects broader trends in the U.S. health insurance industry. Another recent Commonwealth Fund report found that the share of Americans in employer-based plans with deductibles that are high relative to their incomes has climbed steadily over the past decade. According to the report, an estimated 31 million insured U.S. adults have such high out-of-pocket costs relative to their incomes that they are effectively “underinsured.” While this estimate has held steady since 2010, if insurers and employers continue to use deductibles to contain their own health care costs, underinsurance is certain to begin to climb again.
No policy, whether at the federal or state level, is static. Both Medicare and Medicaid have evolved over time to adjust to changes in health care and the needs of beneficiaries. The same is true of the Affordable Care Act. States that have used the resources and tools provided to them by the law have created different approaches to implementation that reflect the unique characteristics of their residents and political cultures. In 2017, every state can apply for the law’s so-called 1,332 waivers to further meld the law to fit their own vision of a health care system that insures nearly everyone in a way that guarantees access to timely care. With King v. Burwell resolved, policymakers, insurers, and providers can now focus their attention on continuous improvement of Americans’ insurance coverage and access to health care.
1Delaware and Pennsylvania, which have federally facilitated marketplaces, recently received conditional approval from the U.S. Department of Health and Human Services to operate their own marketplaces and enroll people through the federal website, HealthCare.gov. Three other states—Nevada, New Mexico, and Oregon—currently use this model.