Health insurance arithmetic

In June 2012 Chief Justice Roberts delivered the fifth and deciding vote that upheld President Obama’s Patient Protection and Affordable Care Act (ACA). The hope was that leaders would work on implementing the reforms, summarized in a Time magazine article as beefing up Medicaid for low-income Americans and opening up the private insurance market to everyone, regardless of health status—all while cutting health care costs. The rationale on paper made sense. More uninsured Americans would be able to purchase health insurance, thus relieving the economic burden on the taxpayer, who inevitably had to bear the brunt of unpaid hospital bills. It also made sense from a health perspective. The ranks of US adults with chronic diseases are swelling every year. Investing in preventive care is therefore a primary objective of the ACA.

Where do we stand one year later? Nearly two-thirds of Americans work (civilian labor force participation rate was 63.4% in July). Many workers will benefit from existing health coverage and may be unaffected by the upcoming changes, unless they are employed by companies contemplating dropping or changing health plans. Approximately 7.4% of Americans were unemployed in July (i.e. actively looking for work in the prior 4 weeks, as opposed to no longer in the labor force). This portion of the population may benefit from COBRA, subsidies towards individual health insurance plans purchased in state-run markets or Medicaid. Only 13.7% of Americans are ≥65 years old and thus eligible for or currently using Medicare. Theoretically, most Americans will now have access to affordable health care.

What does this mean in reality? Individuals may enroll in health insurance plans through state-run health insurance exchanges, effective 1 October 2013. New Yorkers can find a plan that fits their needs on the NYC Health Insurance Link (The Healthy NY program also lists competitive health insurance rates) and Connecticut residents can learn about tax credits that will be applied towards their premiums on the access health CT website. Residents in other states could find up-to-date profiles of state-run health insurance marketplaces on the website of The Henry J Kaiser Family Foundation. Low-income Americans may benefit from Medicaid expansion in participating states. The American Public Health Association defines Medicaid expansion as follows: As the law was written, nearly all U.S. citizens under 65 with family incomes up to 133 percent of the federal poverty level (FPL) ($30,675 for a family of four in 2012) will qualify for Medicaid under the expansion. As of April 2013, fifteen states (Alaska, Alabama, Georgia, Idaho, Indiana, Iowa, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Texas, Wisconsin, and Virginia) were not participating in Medicaid expansion.

Does the average American know about these impending changes? According to Gallup, 43% of uninsured Americans are unaware that they are required to get health insurance or pay an average fine of $1000 per year. In addition, most working Americans are ≥18 years old and the median age of the entire population is 37.1 (changing demographics and successful passage of the DREAM act may change the median age). Middle-aged Americans (30 to 60 years old) are increasingly diagnosed with chronic illnesses. These individuals are likely to need comprehensive health coverage (including prescription plans) compared with the catastrophic health coverage (high deductible/low premium monthly coverage) currently being advertised in the press.

In the next 8 weeks we should hear more about how our wallets and health will be affected by the ACA.