Running Head: CRITICAL ISSUE: UNINSURED AMERICANS

Critical Issue: Uninsured Americans Jon Chao HCA450A Chris Tokonitz Warner Pacific College December 2, 2013

CRITICAL ISSUE: UNINSURED AMERICANS Critical Issue: Insurance For The Uninsured Americans Americas uninsured population is a critical issue that needs to be addressed. It is estimated that there are over 47 million uninsured non-elderly Americans in the United States. Most recently, in March 2010, President Barack Obama championed historic health care reforms that were passed by Congress as the Patient Protection and Affordable Care Act (ACA) (D. Miller, 2011). The goal of the health reform is to decrease the number of uninsured Americans through Medicaid or subsidized coverage for qualifying individuals and families. Why are there so many uninsured Americans? The main reason why there are so many uninsured Americans is the high cost of insurance. Majority of the uninsured does not have access to insurance through their job and with the lack in eligibility for public coverage leaves many with no other options. Many individuals blame the cost of coverage and some blame the lost of their jobs for being uninsured. In 2012, 61% of adults said one of the reasons why they are uninsured is either because the cost is too high or because they lost their jobs, compared to 1.5% who said they are uninsured because they do not need coverage (Kaiser Family Foundation, 2013). With millions of uninsured Americans, the question we must asked, who are the uninsured Americans that make up this staggering number? According to Kaiser Family Foundation (KFF), the majority of the uninsured are in low-income working families. Income has a lot to do with Americans being uninsured. Americans living below the poverty level, which was $22,350 in 2011 for a family of four, have the highest risk of being uninsured (CBSDFW, 2013). Americans who are uninsured were employed, but full-time employees had the option of signing up for medical coverage. More than 78%

CRITICAL ISSUE: UNINSURED AMERICANS of uninsured Americans come from working families, while 22% are in non-working families (Todd & Sommers, 2012). So why does so many working families do not have coverage? Many employers do not offer health insurance and if the employers do offer health insurance the employees are unable to afford the coverage. Many opt out due to the fact that it is hard to pay for their portion of the premium. In 2012, the average worker participating in employer-sponsored heath insurance contributed $79 per month for individual plans and $360 per month for family coverage (CBSDFW, 2013). Out of the uninsured Americans, nine out of ten low income or moderate income families are below 400 percent of the poverty level (CBSDFW, 2013). Majority of the uninsured Americans are from families with low to moderate incomes. Low-income families makes up 25.4% (less than $25,000 per year) of the uninsured, middle-income families makes up 21.5% ($25,000-$49,999 per year), while 37.4% of the uninsured had a household income above $50,000 (Todd & Sommers, 2012). The age of the uninsured varies. Children are least likely to be uninsured due to programs like Medicaid or CHIP. On the other hand, according to KFF, young adults makes up 27% of the uninsured population, but a decrease with the young adults has dropped due to the implementation of the ACA, which allows young adults to remain on their parents private insurance until the age of 26. However, young adults continue to have a have a high uninsured rate compared to other age groups (Kaiser Family Foundation, 2013). Even though, after subtracting the numbers of young adults away from the 47 million uninsured Americans that still leaves millions of Americans uninsured.

CRITICAL ISSUE: UNINSURED AMERICANS

Exhibit 1:

In exhibit 1, the rates of uninsured vary by state. Individuals living in the South and West are most likely to be uninsured (Kaiser Family Foundation, 2013). KFF also mentioned, eight out of ten uninsured are U.S. citizens and 19.7% are non-citizens. The percentage of non-citizens includes lawfully present and undocumented immigrants. Many of the uninsured are people with different ethnicities. By ethnicity, the Kaiser study found about one-third of Hispanics and over one-fifth of black Americans are uninsured, compared to 13 percent of non-Hispanic Whites (CBSDFW, 2013). Uninsured population is the U.S.; people with different ethnicity background tend to have a harder time finding insurance and makes up 33% of the uninsured population (CBSDFW, 2013).

CRITICAL ISSUE: UNINSURED AMERICANS Now that the uninsured Americans are identified, how does the lack of medical coverage affect access to health care? Uninsured Americans face many barriers when accessing health care. The uninsured are faced with financial difficulties. Many uninsured Americans tend to dodge preventative care, which can lead to other major health issues. The uninsured are more likely to be hospitalized for conditions that could have been prevented, and are more likely to die in the hospital than those with insurance (Kaiser Family Foundation, 2013). When uninsured families seek out medical care knowing that they are unable to pay for the medical bills, they are most likely wait until it is a life threating emergency. Uninsured families already faced with difficulties to provide for everyday needs financially let lone being faced with medical bills. The Chart below shows some of the implications why many uninsured Americans lack access to health care due to financial stability.

Exhibit 2: An average uninsured household has no net assets (Kaiser Family Foundation, 2013). Without the financial stability to pay for medical bills, the uninsured will most

CRITICAL ISSUE: UNINSURED AMERICANS likely be faced with debt they will not be able to pay which leads to bankruptcy. Medical debts contribute to almost half of all bankruptcies in the United States (Kaiser Family Foundation, 2013). Is being insured important? Do all Americans have to have insurance to have better health outcomes? Yes. Coverage matters. Uninsured Americans are being harmed by the lack of preventative care. The benefits of gaining health insurance will help with this problem. Studies show that for adults without health insurance, the evidence shows: Men and women are much less likely to receive clinical preventive services that have the potential to reduce unnecessary morbidity and premature death Chronically ill adults delay or forgo visits with physicians and clinically effective therapies, including prescription medications Adults are more likely to be diagnosed with later-stage cancers that are detectable by screening or by contact with a clinician who can assess worrisome symptoms Adults are more likely to die from trauma or other serious acute conditions, such as heart attacks or strokes (Miller, 2011). The lack of health insurance affects everyone. It is important that health insurance is available to all Americans in the U.S. It should be affordable and it should readily available when coverage is needed. Help is on the way for the uninsured or is it? On March 2010, The Affordable Care Act (ACA) was signed into law. The goal of the ACA is to decrease the number of uninsured in America.

CRITICAL ISSUE: UNINSURED AMERICANS The ACA will fill existing gaps in coverage by providing expansion of Medicaid for adults with incomes at or below 138% of poverty in states that choose to expand, building on employer-based coverage, and providing premium tax credits to make private insurance more affordable for many with incomes between 100400% of poverty (Kaiser Family Foundation, 2013). Some of the provisions of the law have already been implemented. Within the ACA, is the Health Care Reform (HCR). HCR is the strategic plan to get uninsured Americans the affordable healthcare they disparately need. The changes in healthcare may affect you as an individual, families, and businesses. HCR is to guarantee all Americans affordable medical coverage. Starting in January 1, 2014, all new individual and small group health insurance policies must be sold on a guaranteed issue basis (OregonHealthAnswers.org, 2013). Health insurance coverage can no longer be denied based on pre-existing conditions. You cannot be charged more based on pre-existing conditions nor can your coverage be cancelled because you happen to get sick (OregonHealthAnswers.org, 2013). This change also affect when you get coverage when you get hired with pre-existing conditions. Normally when employers hire an individual with pre-existing condition, that individual had a waiting period that could be as long as six months. HCR changed the time period for how long the waiting period can last from six months to the maximum of ninety days. In 2014, all health insurance must include minimum essential benefits. There are ten essential benefits that must be included in the health care plan. Here is a list of essential benefits that should be included in the health care plan:

CRITICAL ISSUE: UNINSURED AMERICANS Ambulatory patient services- these include outpatient services such as doctor visits Emergency services- these include care received in an Emergency Room Hospitalization- these include medically-necessary surgeries and other inpatient procedures Maternity and newborn care Mental health and Substance use disorder services- these services include behavioral health treatment Prescription drug coverage Rehabilitative and habilitative services and devices- Rehabilitative covers services such as relearning to walk after stroke. Habilitative services involve learning a new skill such as speaking without a speech impediment Laboratory tests and services Preventive and wellness services as well as the management of chronic diseases Pediatric services (including both oral care and vision care) (OregonHealthAnswers.org, 2013). These essential benefits have to be provided with all health care insurance. Under the HCR, includes creation of a healthcare insurance marketplace. The healthcare insurance marketplace also known as the exchange marketplace is a place where individuals, families, and small businesses could go to shop and compare different types of health insurance that best fits their needs. Each state participating has created an

CRITICAL ISSUE: UNINSURED AMERICANS online marketplace where comparison of healthcare insurance is available. There are 17 state-based marketplaces, 7-partnership marketplace, and 27 Federally facilitated Marketplace. These marketplaces are designed to make comparing health insurance easier. In the past comparing health insurance was a difficult task. Now, health insurance companies who has decided to offer insurance through the marketplaces has to provide certain standard that provide the same level of coverage. How much medical expenses do you have to pay? It all depends on the insurance plan you decide to purchase. The plans have to cover the essential benefits mentioned earlier and the difference depends on the amount of expenses the plan covers.

The chart above show the amount of medical expense it will cover accordance to plan. Bronze package covers 60 percent medical expenses each year, while the platinum

CRITICAL ISSUE: UNINSURED AMERICANS package cover 90 percent of the expenses each year. Depending on which insurance company you decide to purchase the insurance from, the cost of each package varies. The insurance companies will decide how much each plan costs. The cost of premium you pay each month also depends on the package you pick. With the Bronze plan, which the insurance company covers the lowest amount of medical expenses each year, in turn means you pay a lower monthly premium payment. In general, the lower your monthly premium, the higher your cost of care will be, on the other hand, the higher your monthly premium, the lower your out-of-pocket expense you pay. So, pick a plan that best fits your health care needs. If you and your family need a lot of healthcare, paying a higher premium will save you more money in the long run. If you are a healthy individual, paying a lower premium will cost you the least. The process of enrollment takes place on October 1, 2013. There are many incentives for individuals and small businesses that choose to enroll through the marketplace. There is financial assistance for all and most people qualify. Many uninsured Americans will qualify for government assistance for the medical coverage. Individuals and families with incomes low enough may quality for all or a large part of their premiums to be paid by the government (OregonHealthAnswers.org, 2013). Small businesses also benefit through the healthcare exchange. If a small business choose to participate they may be eligible for tax credits to help pay for cost of the insurance they provide for their employees. Medicaid is also expanding to cover individual and families if their income is under the 138 percent of the Federal Poverty Level (FPL). Not all states are expanding their Medicaid program. There are 26 states that are expanding their Medicaid coverage,

10

CRITICAL ISSUE: UNINSURED AMERICANS four are considering and 21 states are choosing not to expand Medicaid coverage at this time. The Supreme Court ruling of the ACA allowed states to opt out of the laws Medicaid expansion, leaving each states decision to participate in the hands of the nations governors and state leaders (The Advisory Board Company, 2013). This can potentially be a problem for millions of uninsured Americans. Information about Medicaid expansion will be discussed later in the paper. Due to the fact that healthcare insurance providers can no longer deny medical coverage to people with pre-existing conditions, health insurance coverage is mandatory. The Affordable Care Act includes two mandates the require individuals and certain employers to have health insurance coverage (OregonHealthAnswers.org, 2013). The individual mandate requires individuals to purchase insurance or the individual will have to pay a tax penalty. The tax penalty increases year to year if individuals choose not to purchase insurance. For the year 2014, the penalty for not having health insurance coverage is $95 per adult and $47.50 per child, up to the maximum of $285 or 1 percent of family income, whichever is greater. In 2015, the penalty will increase to $325 per adult and $162.50 per child; up to a family maximum of $975 or 2 percent of family income, whichever is greater. For 2016, the penalty increases even more to $695 per adult and $375.50 per child, up to a family maximum of $2,085 or 2.5 percent of family income, whichever is greater (OregonHealthAnswers.org, 2013). Most likely the penalty will continue to increase as each year approaches. Due to the fact that people with pre-existing condition cannot be denied of health insurance, the

11

CRITICAL ISSUE: UNINSURED AMERICANS individual mandate is necessary. If a mandate was not set in place, healthy people will opt out of coverage until they need it. The business side has a mandate too. The employer mandate requires businesses with 50 of more equivalent full-time employees to provide affordable and adequate health insurance coverage to its employees or pay a tax penalty (OregonHealthAnswers.org, 2013). If the employer does not offer insurance and the employees buy insurance with government subsidy the penalty is $2,000 per full-time employee not including the first 30 full-time employees. Remember that the employer penalty only applies if an employee receives either a subsidy or a cost-share reduction through the exchange (OregonHealthAnswers.org, 2013). This mandate was originally set to go into effect in 2014, but is now pushed until 2015. The changes and the impact the ACA has on the uninsured Americans vary depending on the peoples situation. The ACA goal is to make health insurance more accessible and affordable for all Americans. There are many options available to people that does not have insurance and people that already have coverage. The main goal overtime is to create a health care system that is sustainable and more affordable for all (OregonHealthAnswers.org, 2013). Since the rollout of the health insurance marketplace on October 1, 2013, there have been problems and implications with enrolling people when they are looking into purchasing health insurance coverage. There are not as many uninsured Americans going through the maketplace right now. The websites are plague with technical difficulties. The number of enrollees through the health insurance marketplace is extremely low. In the month of October, only 106,185 people have chosen a private health

12

CRITICAL ISSUE: UNINSURED AMERICANS insurance plan through the trouble exchanges. The number of enrollees fell way short of the predicted enrollees of 500,000 through the exchanges the Obama Administration set. As of today, according to The Advisory Board Company, 485,026 applied and 195,226 actually picked a plan and enrolled. HealthCare.gov, the federal online health insurance marketplace where 36 states rely on going to purchase health insurance is having issues when more than 20,000 to 30,000 people attempt to use it at the same time (Goldstein, Eilperin, & Sun, 2013). The state-run exchanges are having similar problems. Even though the health insurance exchange websites are having issues, the state-run exchange websites are doing a lot better with enrollment. Yes, the issues are similar to the federal exchange, but it is seeing enrollee numbers rise in the last month. Health policy experts said the momentum from the state exchanges is encouraging (Sun & Kliff, 2013). This means that the state-run websites are seeing good results. The state exchanges that have performed well were just better equipped and ready to handle high capacity of users, they worked out some of their technical issues, testing early on in the summer (Sun & Kliff, 2013). The coverage is set to go into effect on January 1, 2014 and there is not enough time for people to apply let alone enough time for carriers to process the applications. The dead line for uninsured Americans to apply for insurance was December 15, but is now pushed back one week to December 23 giving people enough time to apply. Is one week enough time? Insurers are worried that a flood of new applications at the last minute, combined with the inaccurate enrollment data they are receiving from HealthCare.gov, will leave them scrambling to verify information and receive payment

13

CRITICAL ISSUE: UNINSURED AMERICANS (Sun & Kliff, 2013). This can potentially cause a big problem with the uninsured Americans. The SWOT analysis below will provide more information about the Health Care Reform and how it impacts the uninsured Americans. The ACA and how it Impacts the Uninsured Americans: Strengths: Medicaid expansion Establishes subsidy program for low and moderate-income Americans with pre-existing conditions can no longer be denied coverage

14

Weaknesses: Health insurance marketplace (exchanges) having technical problems High premiums and out-of-pocket expenses Americans will opt out and pay the

Opportunities: Ensure that millions of Americans with insurance can have access to affordable health care Children up to age 26 can retain coverage under parents health insurance

Threats: Cancellation of non-compliance insurance States are not expanding their Medicaid program ACA enemies

CRITICAL ISSUE: UNINSURED AMERICANS Not only will the health insurance marketplace having trouble enrolling the uninsured, the ACA itself will leave millions of people uninsured, especially the populations that live in poverty. The coverage gap within the uninsured adults that live in states that do not expand Medicaid will remain uninsured. Lets take a look at all the states that do not expand their Medicaid program and the impact it will have on the uninsured. One of the major vehicles in the Affordable Care Act (ACA) to increase health insurance coverage is an expansion of Medicaid to adults with incomes at or below 138% of the federal poverty level (FPL) (Kaiser Family Foundation, 2013). A total of 4.8 million uninsured Americans will fall into the coverage gap. According to KFF, a fifth of the 4.8 million uninsured Americans who will gain access to health insurance if these states expand their Medicaid program resides in Texas, sixteen percent live in Florida, eight percent in Georgia, seven percent live in North Carolina, and six percent live in Pennsylvania. The chart below shows the number of Americans who will not be insured if the states do not expand their Medicaid program.

15

CRITICAL ISSUE: UNINSURED AMERICANS That is a total of 4.8 million in just five states. If we take a look at the other states which makes up 41 percent of the population who will gain health insurance if their Medicaid program is implemented. A total of 22.3 million uninsured with income below 138 percent of the FDL would be potentially eligible for Medicaid if all states fully implemented the ACA (Kenney, Dubay, Suckerman, & Hentress, 2012). Of these, 15.1 million are adults of the uninsured do not fall under the Medicaid program, but will if the states fully implement the Medicaid expansion, 2.9 million are children, and 4.3 million are adults who qualify for Medicaid but are not enrolled. The chart below shows the 22.3 million uninsured with incomes below 138 percent of the FDL.

16

CRITICAL ISSUE: UNINSURED AMERICANS The Supreme Courts rule that the expansion Medicaid program is up to the states leaders to fully implement or not. State decisions regarding whether to expand Medicaid under the ACA will directly affect the 15.1 million uninsured adults with incomes below 138 percent of FPL who are currently eligible for Medicaid (Kenney, Dubay, Suckerman, & Hentress, 2012). This can potentially leave millions of without any assistant for gaining health insurance. The lives of these individuals will be impacted with the expansion of Medicaid regarding their health and financial stability.

17

The map above shows the states that are implementing their Medicaid program and the states that are not. It is important that the states that are not expanding their Medicaid program are pushed to expand it. State leaders should put an effort to get lawmakers to approve expanding the Medicaid health insurance program for the poor and also putting in an effort to get all states to implement their Medicaid program. The ACA was signed into

CRITICAL ISSUE: UNINSURED AMERICANS law to help uninsured Americans gain health insurance. Millions of Americans are without health insurance today, due to the fact that either they cannot afford it or they do not have access to health insurance. People living with income below the FDL will gain access to health insurance if all states implement their Medicaid program. While we wait for the ACA to be fully implemented, millions of Americans will go without health insurance. In conclusion, there are 47 million uninsured Americans. The signing of the ACA into law with help decrease the number of uninsured Americans. The Medicaid expansion in the states that are implementing the expansion will give the opportunity to many Americans who will become eligible for health insurance. Also, many Americans will have access to affordable health insurance through health insurance marketplace. Subsidy programs will help those who needs it and will help with the cost of premium costs. On the other hand, millions of Americans will not have access to health insurance. With the implications the exchange marketplace are having, uninsured Americans will not be able to get insurance before January 1, 2014. Until all states implement the expansion of their Medicaid programs millions of Americans will also remain uninsured. The Medicaid expansion will reach only half the number of uninsured people it could, leaving many poor uninsured adults without coverage. Health care spending will continue to rise. The quality of care in care will not show improvement. In order for these areas of healthcare to improve, all uninsured Americans should have the opportunity to get health insurance coverage.

18

CRITICAL ISSUE: UNINSURED AMERICANS References CBSDFW. (2013, September 4). Who are the uninsured in america?. Retrieved from http://dfw.cbslocal.com/2013/09/04/who-are-the-uninsured-inamerica/ Kaiser Family Foundation. (2013, september 26). Key facts about the uninsured population . Retrieved from http://citationmachine.net/index2.php?reqstyleid=2&mode=form&rsid=5&reqsrci d=APAWebPage&more=yes&nameCnt=1 Kaiser Family Foundation. (2013, October 23). The uninsured: A primer - key facts about health insurance on the eve of coverage expansions. Retrieved from http://citationmachine.net/index2.php?reqstyleid=2&mode=form&reqsrcid=APA WebPage Kaiser Family Foundation. (2013, October 23). The coverage gap: Uninsured poor adults in states that do not expand medicaid. Retrieved from http://kff.org/healthreform/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-notexpand-medicaid/ Kaiser Family Foundation. (2013, July). Analyzing the impact of state medicaid expansion decisions. Retrieved from http://kaiserfamilyfoundation.files.wordpress.com/2013/07/8458-analyzing-theimpact-of-state-medicaid-expansion-decisions2.pdf Kenney, G., Dubay, L., Zuckerman,, S., & Huntress, M. (2012, July 5). Opting out of the medicaid expansion under the aca: How many uninsured adults would not be eligible for medicaid?. Retrieved from

19

CRITICAL ISSUE: UNINSURED AMERICANS References cont. OregonHealthAnswers.org. (2013). 7 healthcare changes and how they affect you. Retrieved from oregonhealthanswers.org OregonHealthAnswers.org. (2013). Cover oregon plans bronze, silver, gold, and platinum comparisons. Retrieved from http://oregonhealthanswers.org/coveroregon-plans/ Miller, D. (2011). The uninsured. Farmington Hills, MI: Greenhaven Press. The Advisory Board Company. (2013 , November 6). Where the states stand on medicaid expansion. Retrieved from http://www.advisory.com/DailyBriefing/Resources/Primers/MedicaidMap Sun, L., & Kliff, S. (2013, November 22). State-run health insurance exchanges report november enrollment surge. Retrieved from http://www.washingtonpost.com/politics/november-surge-seen-in-obamacaresign-ups-in-states/2013/11/22/4233cc50-539e-11e3-9fe0fd2ca728e67c_story.html http://www.urban.org/UploadedPDF/412607-Opting-Out-of-the-MedicaidExpansion-Under-the-ACA.pdf

20