Myths and Misperceptions: Who Will Be Helped by the Coverage Expansions in the ACA?

August 5, 2013

The debate about the Affordable Care Act (ACA) rages on as we get closer and closer to the big coverage changes that take effect starting on January 1, 2014 (with open enrollments for the health insurance exchange beginning in just a few months). The nature of the debates indicates that there is some misperception about who will be helped by these coverage changes. Those who want to repeal the ACA do not seem to realize that most of those who would be helped simply don’t have affordable choices today.

CHRT just released several issue briefs that should help policy makers and the public at large better understand the two groups of individuals who will be most affected by the ACA coverage changes: those who would be eligible for Medicaid in states that choose to expand Medicaid and those who would be eligible for tax credits to buy private health insurance through the insurance exchanges. CHRT’s reports examines the demographic characteristics of those two groups of individuals and details the regional variation of the ACA’s coverage of Michigan’s uninsured.

Ever since the Supreme Court decision of June 2012 made the Medicaid expansion optional, there has been considerable debate in many states about the pros and cons of such an expansion. In Michigan, initial proposals to expand Medicaid would have eliminated that coverage after 48 months. The compromise bill places higher cost sharing requirements on those who are on Medicaid for longer than 48 months. Those provisions imply that many in the legislature believe that individuals who would come into the Medicaid program under the expansion have other choices today. The reality is quite different.

In Michigan, those who would be newly eligible for Medicaid are working at much higher rates than those in the existing Medicaid program—50 percent of the newly eligible are working compared to only 29 percent in the current program. Those who would be newly eligible are also better educated than those currently enrolled in Medicaid—more than 85 percent have graduated from high school compared to less than 75 percent of those in the current Medicaid system. They are also more likely to be male and white than those in the current Medicaid program.

While there are many who would become newly eligible for Medicaid that have employer coverage today, the largest group that will become eligible for Medicaid are uninsured. They simply have no other affordable options.

Similarly, when we look at the population that would be eligible for tax credits to buy health insurance on the health insurance exchange. More than 70 percent of those who will be exchange eligible for tax credits are working and more than 90 percent of them have graduated from high school.

These individuals who would most be helped to get coverage in the ACA are working in low wage jobs that don’t offer them any affordable options today. And, as we showed in an earlier release, as the cost of health care has gone up, small businesses have been dropping health coverage for at least the last decade – so fewer and fewer people are able to get their health coverage through their employment. In other words, those who would be most helped by the Affordable Care Act are not able to get health coverage through no fault of their own.

So, the question really does come down to: do we want all Americans to have health care coverage or not? If we do and if we want to build on the current public/private system rather than replace it, then it would seem that the idea of expanding Medicaid and providing tax credits to individuals to enable them to afford health coverage does make sense and will help the private market work better. If not this approach, then what?

But, maybe at core, the critics of the Affordable Care Act really don’t think we should have health coverage for all in this country. Then, the core question is: do we really want to live in a society where millions of people are cut out of affordable health coverage?