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The ACA has been live for a year. So why are millions still uninsured?

November 14, 2014

    Clare Rizer, The Daily Briefing

    Last year, more than seven million people purchased health insurance plans on the Affordable Care Act's (ACA) exchanges. At the same time, about six million Americans enrolled in states' Medicaid programs.

    But despite this—and a mandate requiring people to obtain insurance or pay a penalty to the federal government—millions of Americans remain uninsured.

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    To be more precise, Gallup data show that about 13.4% of Americans did not have insurance in the third quarter of 2014 (down from 17.1% in Q4 2013). That's about 42 million Americans still living without insurance.


    1. They're exempt from the mandate.

    The Obama administration originally provided a limited number of exemptions to the individual mandate under the law, including those for Native American tribes, undocumented immigrants, and certain religious groups.

    The administration in December 2013 expanded the number of exemptions to include 14 ways that U.S. residents can file for an exemption based on hardships, such as domestic violence, a recent death of a family member, or experiencing "another hardship obtaining health insurance," which could include trouble enrolling through the exchange websites.

    According to a report by the Congressional Budget Office, about 30 million U.S. residents will be uninsured between fiscal years 2015 and 2024. However, about 23 million of those individuals likely would qualify for one of the main exemptions created by the law. Of the remaining seven million people, about three million are expected to qualify for the mandate's additional hardship exemptions.

    So you have a whole subset of the population that may not have obtained coverage for a simple reason: The law doesn't require them to.

    2.  They're stuck in the 'coverage gap.'

    Some of those people exempt from the mandate—nearly five million, in fact—fall into the ACA coverage gap, an administrative "twilight zone" in which they do not qualify for Medicaid or for insurance subsidies.

    As it was originally written, the ACA would expand coverage to millions of Americans this year through its individual mandate provision and by making affordable coverage options available. Specifically, the federal government would offer insurance subsidies to residents making between 100% and 400% of the federal poverty level (FPL) and pay to expand Medicaid eligibility to all residents making less than 138% FPL.

    However, the Supreme Court in 2012 made Medicaid expansion optional, and 23 states have since rejected the federal funds, which cover the entire cost of the expansion for three years and then at least 90% thereafter. As a result, there are no new affordable coverage options for residents making below 100% FPL in states that opt not to expand Medicaid.

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    According to a 2013 report by the KFF, nearly 50% of the uninsured individuals who are expected to fall in the coverage gap live in Florida, Georgia, and Texas.

    3. They don't realize they're required to get covered.

    According to a recent Gallup survey conducted between Oct. 22 and Nov. 12, 70% of Americans say they are aware of the ACA's individual mandate to have health coverage or pay a fine. That means still 30% of Americans are unaware of the requirement, suggesting that challenges remain to educating the public about health coverage and their responsibilities under federal health reform.

    In addition, a Kaiser Family Foundation (KFF) tracking poll last month found that nine in 10 uninsured Americans were unaware that the ACA's second enrollment period begins tomorrow.  

    4. They're choosing to pay the penalty instead of buying coverage.

    Some individuals are purposefully choosing to forgo insurance coverage, opting instead to pay the individual mandate's penalty of $95 for an adult or 1% of an individual's taxable income, whichever is higher. The penalties will increase to $325 or 2% in 2015 and $695 or 2.5% in 2016.

    A new report by the Transamerica Center for Health Studies found that 27% Americans believe paying the penalty will be cheaper than purchasing a health plan. Similarly, 11% said they did not purchase health coverage during the last round of open enrollment because it was too expensive, and 42% said they could afford health insurance premiums totaling just $100 per month.

    4M Americans will pay Obamacare penalties in 2016, CBO says

    Have ACA questions? We've got answers

    Last week, our health policy experts hosted the latest in their series of popular "Pulse Check on Obamacare" webconferences.

    View the webconference or join us live on Nov. 19 to get a breakdown of the Halbig ruling, see the latest on ACA enrollment, and understand the other challenges—and opportunities—that still lie ahead for the health law.


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