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John Bouman

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Affordable Care Act Trumps Recession's Impact on Health Insurance Coverage

Posted: 09/18/2012 2:00 pm

Amidst the mixed news about poverty and income in the Census Bureau's data released last week, came some positive news about health coverage and the impact of the Affordable Care Act's (ACA) provisions that are already in effect.

Overall, the rate and number of people without insurance coverage dropped in 2011 for the first time since 2007, in spite of the recession, contrary to most expert predictions (which were based on the assumption that loss of employer supported insurance due to job loss might increase the rate of uninsurance).

The largest drop in the uninsured was among the 19-25 age group, clearly fueled by the ACA provision allowing young adults to stay on their parents' health insurance as dependents up to age 26. The Obama Administration estimates that three million people have gained coverage through this provision.

While private and employer-based insurance did not decline for the first time in 10 years (due in large part to the impact of the young adult provision), it was an increase in public insurance enrollment that fueled the overall drop in the uninsured. Both Medicaid and Medicare enrollments increased, and children's insurance held steady. The Medicaid and children's insurance results can be attributed to the "stability provisions" in the ACA, which require states to hold the line on Medicaid and State Children's Health Insurance Program eligibility ("maintenance of effort"). Medicaid and Medicare combined cover about one third of the country's population.

On another front, one of the main messages of the Census Report was the ongoing exacerbation of income inequality in the U.S. (with the bottom four-fifths of the population losing ground, and the top fifth gaining). There is a health insurance side to that story. In 2011, the uninsured rate grew the lower a family's income was: 25.4 percent of those with household income less than $25,000 were uninsured, compared to 7.8 percent of those in households with income over $75,000.

Thanks to the ACA, the country's performance on health coverage improved in 2011, when it otherwise could have been dragged down by the recession. But there is a long way to go, with over 15 percent of the population and 9.7 percent of children still uninsured. Addressing income inequality will have a positive impact on insurance coverage. The ACA's largest impact on coverage will come in 2014 and beyond, with implementation of the health insurance exchanges and the completion of Medicaid's coverage of the poor. Faithful and vigorous implementation of those changes will make this story even brighter.

 
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