Who Are the Remaining Uninsured, and Why Do They Lack Coverage?

The Affordable Care Act (ACA) brought sweeping change to the U.S. health care system, expanding comprehensive health insurance to millions of Americans and making it possible for anyone with health problems to get coverage by banning insurers from denying coverage or charging more because of preexisting conditions. In 2018 there were 18.2 million fewer uninsured people in the U.S. than when the ACA became law.¹ In addition, fewer people are forgoing health care because of cost or reporting high out-of-pocket costs relative to their income.²

Yet, in 2018, an estimated 30.4 million people were uninsured, up from a low of 28.6 million in 2016. Coverage gains have stalled in most states and have even eroded in some.³ In addition, more people have reported problems getting health care because of cost.

To examine why so many people remain uninsured, we use data from the 2018 Commonwealth Fund Biennial Health Insurance Survey. Answers to the survey questions can help federal and state policymakers find solutions to help uninsured Americans gain coverage.

Highlights

• In 2018, uninsured working-age adults in the United States were disproportionately low income, Latino, and under age 35.
• Nearly half of uninsured adults may have been eligible for subsidized insurance through the marketplace or their state’s expanded Medicaid program.
• Two-thirds (67%) of uninsured adults had not gone to the marketplace to examine their coverage options. Of those, one-third (36%) said they didn’t think they could afford health insurance.
• Following the ACA individual market subsidies and reforms, the share of adults who had tried to buy a plan in the individual market and reported difficulties finding an affordable plan fell from 60 percent to 34 percent. In 2018, 42 percent of adults reported difficulty finding affordable coverage.
• Despite affordability concerns and changes made by Congress and the Trump administration, 62 percent of adults with individual coverage and 84 percent with Medicaid rated their coverage as “good,” “very good,” or “excellent.”

The ACA’s coverage expansions led to significant declines in uninsured rates among people who had been the most likely to be uninsured: people with low incomes, Latinos, and young adults (Table 1). But in 2018, these groups remained disproportionately uninsured.

In 2018, 58 percent of uninsured adults had incomes below 200 percent of the federal poverty level ($24,120 for an individual and $49,200 for a family of four). Across age groups, young adults ages 19 to 34 made up the largest share of the uninsured. More than one-third of the uninsured were Latino even though Latinos make up 18 percent of the working-age adult population (Table 1).

We examined the remaining uninsured by income status to determine whether they might be eligible for subsidized coverage. The ACA provides subsidized insurance through two sources: Medicaid for adults who earn less than 138 percent of poverty ($16,643 for an individual or $33,948 for a family of four) in states that expanded Medicaid, and subsidized plans in the ACA marketplaces for those who earn up to 400 percent of poverty ($48,240 for an individual and $98,400 for a family of four).

The ACA excludes undocumented immigrants from both the marketplace subsidies and the Medicaid expansion: they may only buy coverage through the individual market outside the marketplaces. We use foreign-born status among Latinos as a rough proxy for uninsured adults who may not be eligible for subsidized coverage because of their immigration status.⁴ We do not have an estimate of undocumented immigrants of other ethnicities.

Nearly half (47%) of uninsured adults in 2018 had incomes that may make them eligible for either expanded Medicaid or subsidized marketplace plans. The remainder of uninsured adults would not qualify for either: 11 percent earn below 100 percent of poverty and live in a state that did not expand Medicaid;⁵ 8 percent have incomes at or above 400 percent of poverty and are ineligible for the tax credits; and 25 percent were foreign-born Latinos and may be ineligible for Medicaid or subsidized plans because of their immigration status.

While half of adults who were uninsured at the time of the survey might have been eligible for subsidized health care, the majority (67%) of uninsured adults did not try to get health insurance through the marketplace. When asked why, more than one-third (36%) reported it was because they did not think they could afford it, 15 percent said they did not think they needed it, 8 percent said they did not think they would be eligible for insurance, and 7 percent said they were not aware of the marketplace.⁶

Affordability is the top reason adults dropped their individual market coverage. One-third (34%) of adults who were either uninsured at the time of the survey or had a gap in coverage in the past 12 months, and who were previously covered by either a plan they bought through the marketplace or directly from an insurance company, reported they lost or dropped their plan because they could not afford it.⁷ Half of these adults were uninsured, about a quarter had reenrolled into the individual market, 12 percent transitioned into Medicaid, 7 percent enrolled in employer insurance, and 5 percent enrolled into Medicare (data not shown).

More than half (57%) of adults who were either uninsured at the time of the survey or had a gap in insurance coverage in the past 12 months and who were previously covered by Medicaid reported they lost their Medicaid coverage because they were no longer eligible. Fourteen percent said they did not reenroll in time and 10 percent had moved.⁸ After losing Medicaid, about half of these adults remained uninsured, nearly one-third reenrolled in Medicaid, 14 percent enrolled in employer coverage, 3 percent gained individual market coverage, and 3 percent gained Medicare (data not shown).

The ACA’s subsidies and reforms to the individual market, such as banning preexisting condition exclusions and premium setting based on health and gender, went into effect in 2014. Before these reforms, in 2010, 60 percent of adults who had individual coverage or had tried to buy it in the past three years said it was very difficult or impossible to find affordable coverage. By 2016, the share of adults reporting difficulty finding affordable coverage in the individual market fell by nearly half, to 34 percent. But in 2018, this progress eroded somewhat: 42 percent of adults reported difficulty finding affordable coverage.

Large majorities of insured adults continue to rate their health insurance highly. In 2018, 62 percent of adults with individual market plans and 84 percent with Medicaid rated their health coverage as “good,” “very good,” or “excellent.” Despite affordability concerns and changes made by Congress and the Trump administration, a majority of adults with individual coverage continue to give their health insurance high marks. Significantly more adults with Medicaid gave their coverage high ratings in 2018 compared to 2010.

Policy Recommendations

Affordability remains a key reason 30 million adults remain uninsured. Our findings show more than a third of uninsured adults who did not try to get coverage through the marketplaces cited affordability concerns. One-third of adults with a coverage gap who were previously insured through the individual market dropped their plans because they could not afford them. The survey also suggests a lack of knowledge among uninsured adults about their coverage options. While the national debate about health care is focused on more sweeping reforms, such as Medicare for All, federal and state policymakers have several options to help millions of people keep or gain coverage within the existing law.

• Expand Medicaid without restrictions. Seventeen states have yet to expand eligibility for Medicaid, leaving more than 3 million people with incomes under poverty uninsured.⁹ In addition, encouraged by the Trump administration, nine states have secured approval from HHS to impose work requirements in their Medicaid programs; another seven have submitted applications to do so. A federal district court judge has halted the implementation of work requirements in Kentucky, Arkansas, and New Hampshire but not before more than 18,000 poor adults in Arkansas lost their insurance coverage as a result.¹⁰
• Lift the 400-percent-of-poverty cap on eligibility for marketplace tax credits. In 2019, this action would help people with incomes exceeding $48,560 (individuals) and $100,400 (family of four) better afford marketplace plans. The tax credits work by capping the amount people pay toward their premiums at 9.86 percent of income. Lifting the cap has a built-in phase-out: as income rises, fewer people qualify, since premiums consume an increasingly smaller share of incomes. RAND researchers estimate that this policy change would increase insurance coverage by nearly 2 million and lower silver-plan premiums by nearly 3 percent as healthier people enroll. It would cost the federal government an estimated $10 billion annually.¹¹ Legislation has been introduced to lift the cap.¹²
• State or federal reinsurance. The ACA’s reinsurance program was effective in lowering marketplace premiums. After it expired in 2017, seven states implemented their own programs, four more will implement a program in 2020, and one has submitted an application to do so.¹³ Alaska’s program reduced premiums by more than 20 percent in 2018.¹⁴ These lower costs particularly help people with incomes too high to qualify for ACA premium tax credits. Several congressional bills have proposed a federal reinsurance program.¹⁵
• Reinstate outreach and navigator funding for the 2020 open-enrollment period. The administration has nearly eliminated funding for advertising and assistance to help people enroll in marketplace plans.¹⁶ Survey research indicates that people who received personal assistance when they shopped for coverage were more likely to enroll than those who did not.¹⁷ Some lawmakers have proposed reinstating this funding.¹⁸
• Ban or place limits on short-term health plans and other insurance that doesn’t comply with the ACA. The Trump administration loosened regulations on short-term plans that don’t have to comply with the ACA, potentially leaving people who enroll in them exposed to high costs and insurance fraud. These plans also draw healthier people out of the marketplaces, increasing premiums for those who remain and federal costs of premium subsidies. Twenty-three states and D.C. have banned or placed limits on short-term insurance policies.¹⁹ Some lawmakers have proposed a federal ban.²⁰
• Make premium contributions for individual market plans fully tax deductible. People who are self-employed are already allowed to do this.²¹
• Fix the so-called family coverage glitch. People with employer premium expenses that exceed 9.86 percent of their income are eligible for marketplace subsidies if their income falls between 100 and 400 percent of poverty. This then triggers a federal tax penalty for their employers. There’s a catch: this provision applies only to single-person policies, leaving many middle-income families caught in the “family coverage glitch.” Congress could help families by pegging unaffordable employer plans to family policies instead of single policies. In 2016, Matthew Buettgens and colleagues estimated more than 6 million people were affected by the glitch and fixing it would lower their spending on premiums from an average 12 percent of income to 6.3 percent, at a cost to the federal government of $3.7 billion to $6.5 billion.²²
• Inform people about their options. People who lose coverage during the year are eligible for special enrollment periods for ACA marketplace coverage. Those eligible for Medicaid can sign up at any time. But research indicates that many people who lose employer coverage do not use these options.²³ The federal government, the states, and employers could increase awareness through advertising and education.
• Reduce churn in Medicaid. Research shows that over a two-year period, one-quarter of Medicaid beneficiaries leave the program and become uninsured.²⁴ Many do so because of administrative barriers, particularly the renewal process.²⁵ By imposing work requirements, as some states are doing, this involuntary disenrollment will likely get worse. To help people stay continuously covered, the federal government and the states could consider simplifying and streamlining the enrollment and reenrollment processes.
• Extend the marketplace open-enrollment period. The current open-enrollment period lasts just 45 days. In 2019, eight states that run their own marketplaces have longer periods, some by as much as an additional 45 days.²⁶ Other states, as well as the federal marketplace, could extend their enrollment periods as well.