A new study released on April 19, by the Commonwealth Fund underscores the necessity of having insurance, and the difficulties of navigating the individual market:
- Approximately one-quarter of adults between the ages of 19 and 64 experienced a significant gap in their health insurance coverage in 2011, and compared to those who had continuous coverage, they were less likely to have a primary care physician. They were also more likely to skip recommended preventive screenings, such as mammograms, or cholesterol checks.
- 41% of those who experienced a gap had been covered by employer-sponsored health insurance, with a majority of them citing the loss or change of jobs as the primary reason they experienced a gap in coverage. Many went without insurance for more than a year.
- More than a quarter of those surveyed had never had insurance.
- More than half of adults with incomes of 133% of the federal poverty level (about $19,000 for a single adult, or $30,000 for a family of four) were uninsured for part of the year, and a third of those with incomes between 133% and 250% of FPL had a gap in coverage.
- A majority of those who tried to buy their own insurance on the individual market struggled to understand coverage options, and nearly half never purchased health insurance.
These numbers indicate just how important the Affordable Care Act is:
- The ACA will significantly reduce the number of uninsured. Adults under age 64 who make less than 138% of FPL will be eligible for Medicaid in 2014, which will drastically reduce the number of uninsured adults among the low-income population.
- The ACA and health exchanges should make the insurance market easier to understand and navigate for families. The health insurance exchanges will allow those who are purchasing insurance to compare plans in an easy-to-understand way.
- Tax credits under the ACA will make coverage more affordable. And premium tax credits will help people making between 100% and 400% FPL to afford coverage.
However, efforts to undermine the ACA put these consumer benefits at risk.
The House of Representatives is considering a budget proposal package that includes changes to the premium tax credit repayment caps. When the ACA was passed, Congress capped the amount families would be asked to repay at $400 ($250 for an individual). Congress has twice increased those caps since 2010, and the current proposal would remove those caps entirely, meaning that people might repay up to five times the amount of the penalty for not having insurance. As a result, many individuals and families will choose to remain uninsured and pay the penalty.
Those in favor of removing the caps claim that many households will receive subsidies much larger than they are entitled to because the amount of the subsidies would be based on outdated tax information. However, the new rules for determining tax credits require that individuals and families validate and update the information on their prior year’s tax return and promptly report any changes in income to the exchange. The removal of the caps would mean that even those households that played by the rules and reported all changes promptly and accurately could end up paying several thousand dollars to the IRS at the end of the year. As a result, many of those families will choose to forego health insurance, and will instead pay the penalty, which defeats the general purpose of the ACA–encouraging everyone to have health insurance, while ensuring that health insurance is accessible and affordable.
The efforts in the House of Representatives to undermine the ACA are not helpful to working families. We want to make sure that everyone pays their fair share and takes responsibility for the health care coverage. But we must also consider the importance of ensuring that all of our citizens can access quality, affordable coverage. Striking the right balance between the two is important. And as the Commonwealth Report makes clear, the need for a robust implementation of health reform remains urgent.