The Uninsured at the Starting Line: Findings from the 2013 Kaiser Survey of Low-Income Americans and the ACA

In January 2014, the major coverage provisions of the 2010 Affordable Care Act (ACA) went into full effect. These provisions include the creation of new Health Insurance Marketplaces where low and moderate income families can receive premium tax credits to purchase coverage and, in states that opted to expand their Medicaid programs, the expansion of Medicaid eligibility to almost all adults with incomes at or below 138% of the federal poverty level (FPL). The ACA has the potential to reach many of the 47 million Americans who lack insurance coverage, as well as millions of insured people who face financial strain or coverage limits related to health insurance.

Though implementation is underway and people are already enrolling in coverage, policymakers continue to need information to inform coverage expansions. Data on the population targeted for coverage expansions can help policymakers target early efforts, provide insight into some of the challenges that are arising in the first months of new coverage, and evaluate the ACA’s longer-term effects. The Kaiser Family Foundation has launched a new series of comprehensive surveys of the low and moderate income population to provide data on these groups’ experience with health coverage, current patterns of care, and family situation. This report, based on the baseline 2013 Kaiser Survey of Low-Income Americans and the ACA, provides a snapshot of health insurance coverage, health care use and barriers to care, and financial security among insured and uninsured adults across the income spectrum at the starting line of ACA implementation. The report also examines how findings from the baseline survey can help policymakers understand and address early challenges in implementing health reform.  Detailed information on the survey design, sample, and analysis can be found in the Methods section at the end of the full report.

Background

Prior to implementation of the ACA, over 47 million Americans—nearly 18% of the population—were without health insurance coverage. Because publicly-financed coverage has been expanded to most low-income children and Medicare covers nearly all of the elderly, the vast majority of uninsured people are nonelderly adults.¹ The main barrier that people have faced in obtaining health insurance coverage is cost: health coverage is expensive, and few people can afford to buy it on their own. While most Americans traditionally obtain health insurance coverage as a fringe benefit through an employer, not all workers are offered employer coverage, and not all adults are working. Medicaid and the Children’s Health Insurance Program (CHIP) cover many low-income children, but eligibility for parents and adults without dependent children is limited, leaving many adults without affordable coverage.

These barriers to coverage are reflected in the characteristics of the uninsured population. Uninsured adults are more likely to be low-income than people with private health insurance, while adults with Medicaid coverage are particularly low-income (reflecting very low pre-ACA eligibility limits). Corresponding to their lower incomes, uninsured adults are less likely than privately insured adults to be in a working family; however, the majority of uninsured adults are in a family with either a full- or part-time worker. Uninsured adults also differ from insured adults with regards to other demographic characteristics, often reflecting association with income or work status. For example, they are more likely to be younger than insured adults, as younger adults have lower incomes and looser ties to employment than older adults. There also are significant racial and ethnic differences in health coverage among nonelderly adults, primarily reflecting differences in income by race/ethnicity.

I. Patterns of Coverage and the Need for Assistance

Examining patterns of coverage and the reasons the uninsured lack coverage can inform both outreach avenues and potential barriers to outreach and enrollment. Key survey findings on access to coverage include:

For most currently uninsured adults, lack of coverage is a long-term issue. While some people experience short spells of uninsurance due to job changes, income fluctuations, or renewal issues, for most uninsured adults, lack of coverage is a chronic issue. The survey shows that almost half (47%) of uninsured report being uninsured for 5 years or more, and 18% report that they have never had coverage in their lifetime.

Many uninsured adults report trying to obtain insurance coverage in the past, but most did not have access to affordable coverage. Prior to the ACA, the uninsured reported difficulty gaining insurance coverage due to the high cost of coverage and limits on Medicaid eligibility for adults. Eight in ten uninsured adults report no access to employer insurance, and the majority of people who had access to coverage through an employer report that the coverage offered to them is not affordable. One in three uninsured adults (31%) reported trying to sign up for Medicaid in the past five years, and the majority of them were unsuccessful because they were told they were ineligible. And one in five uninsured adults (22%) reported trying to obtain non-group coverage in the past five years, with most not purchasing a plan because the policy they were offered was too expensive.

Health insurance coverage is not always stable. For most insured adults, coverage is continuous throughout the year and over time, but a sizable number have a gap or change in coverage. When accounting for both insured people with a gap in their coverage and uninsured people who recently lost coverage, the survey indicates that nearly 18 million adults lose or gain coverage over the course of a year. In addition to those who lose or gain coverage over the course of a year, 17 million continuously insured adults have a change in their health insurance plan. The most common reasons for a change in coverage appear to be related to employment. Last, a small number of insured adults report challenges in either renewing or keeping their coverage, another indication of instability in coverage throughout the year.

Informing ACA Implementation:  Many of the barriers to coverage that the uninsured report facing in the past are addressed by the ACA’s provisions to expand Medicaid and provide premium tax credits for Marketplace coverage. However, some uninsured adults may continue to face barriers to coverage, as not all employers are required to offer coverage and not all states are expanding their Medicaid programs. People targeted by the ACA have varying levels of experience with the insurance system. A large share of uninsured adults has been outside the insurance system for quite some time, and the long-term uninsured may require targeted outreach and education efforts to link them to the health care system and help them navigate their new health insurance. In addition, people who have attempted to obtain coverage in the past may be unaware that rules and costs have changed under the ACA; outreach and education will be needed to inform people that eligibility rules have changed and that financial assistance is available to offset the cost of coverage.

Survey findings on changes in insurance coverage over the course of the year indicate that, even after implementation, adults are likely to experience coverage changes due to job changes or income fluctuation. While there has been much focus on the early effort to enroll currently uninsured people in coverage, these findings demonstrate that implementation is not a “one shot” effort that will be done once people are enrolled in the early part of 2014 but rather will require a continuous effort to enroll and keep people in coverage.

II. What to Look for in Enrolling in New Coverage

While many currently uninsured adults have limited experience in signing up for and using health coverage, the past successes and challenges of insured low-and moderate income adults can inform the experiences of those seeking coverage under the ACA. Key survey findings related to plan enrollment and plan choice are:

Most adults did not report problems in applying for and enrolling in Medicaid coverage prior to the ACA, but some encountered difficulties in the process of gaining public coverage in the past. Adults who currently have Medicaid or who have attempted to enroll in the past five years report little difficulty in taking steps to enroll in Medicaid, with half saying the entire process was very or somewhat easy. However, the rest found at least one aspect of the process – finding out how to apply, filling out the application, assembling the required paperwork, or submitting the application – to be somewhat or very difficult.

In choosing their Medicaid or private insurance plan, adults do not always prioritize costs, and many find some aspect of the plan choice process to be a challenge.  Adults choose health plans for various reasons, with 32% reporting that they chose their plan because it covered a wide range of benefits or a specific benefit that they need, 29% because their costs would be low, and 22% because the plan had a broad selection of providers or included their doctor. In choosing a plan, people may face challenges in comparing costs, services, and provider networks, as these factors typically varied greatly across plans in the past. In general, insured adults report that they did not have difficulty in comparing their plan choices, but 36% found some aspect of plan choice—comparing services, comparing costs, and comparing providers— to be difficult.

Overall, insured adults report satisfaction with their current coverage but also report gaps in covered services and problems when using their coverage. Most (85%) insured adults rate their pre-ACA coverage as excellent or good, but they also report gaps in services that are covered by their current insurance. One in six (17%) insured adults report needing a service that is not covered by their current plan, typically ancillary services such as dental, vision care, and chiropractor services. Many insured adults reported experiencing a problem with their current insurance plan covering a specific benefit, either because they were denied coverage for a service they thought was covered (25%) or their out-of-pocket costs for a service were higher than they expected (37%).

Informing ACA Implementation. The ACA includes provisions to simplify the Medicaid application and enrollment process for coverage in all states, regardless of whether they are expanding their Medicaid program. The ACA also requires plans in the Marketplace to provide detailed, standardized plan information for people to compare coverage options. Uninsured adults applying for coverage after these new processes are implemented should encounter fewer challenges in navigating enrollment and plan choice than applicants have in the past. However, in evaluating the success of plan enrollment, it is important to bear in mind historical challenges people have faced in comparing and selecting insurance coverage. It is also important to remember that people place utility on a range of factors related to insurance, including scope of services and provider networks. Assessments of whether people are choosing the optimal plan for themselves and their family will need to consider the multiple priorities that people balance in plan selection. Last, while the ACA aims to ensure coverage of at least a basic set of essential health benefits (EHB), many of the ancillary services that people report needing coverage for—such as dental services—are not included in the EHB. Newly-insured people may be surprised to learn that some ancillary services are not included in their plan, and education efforts will be needed to make sure people understand their coverage.

III. Gaining Coverage, Getting Care

As uninsured adults gain coverage, there are likely to be changes in how often they seek care, what type of care they seek, and where they seek care. By comparing their current interactions with the health care system to their insured counterparts, the survey can provide insight into likely changes. Key findings in this area include:

A large segment of the uninsured has little or no connection to the health care system. Most uninsured adults report few connections to the health care system. Only 51% of uninsured adults report that they have a usual source of care, or a place to go when sick or need advice about their health, and only 33% of uninsured adults have a regular doctor, half the rate of insured adults. This lack of a connection to the health care system leads many uninsured adults to go without care. More than four in ten uninsured adults (41%) reported no health care visits in the past year, compared to 10% of Medicaid beneficiaries and 13% of adults with employer coverage.

A substantial share of the uninsured has health needs, many of which are unmet or only met with difficulty. Despite being as likely as those with private insurance to report having an ongoing health condition, uninsured adults are less likely than their insured counterparts to receive care. When uninsured individuals do receive care, they sometimes receive free or reduced-cost care, though the majority who use services do not. Almost half (49%) of the uninsured report needing but postponing care compared to 28% of adults with employer coverage, 36% with nongroup coverage, and 41% of Medicaid beneficiaries. The most common reason for postponing care among the uninsured is cost, as the uninsured must pay the full cost of their care.

Many of the uninsured report limited options for receiving health care when they need it. Uninsured adults are less likely than their insured counterparts to receive care in a private physician office when they do get care. Uninsured adults are more likely than other adults to report that they have limited options for their usual source of care, with 18% of uninsured people reporting that they chose their usual source of care because it is the only option available to them, compared to 10% of adults with Medicaid and 4% with employer coverage.

Informing ACA Implementation: The survey findings reinforce conclusions based on prior research: having health insurance affects the way that people interact with the health care system, and people without insurance have poorer access to services than those with coverage. Thus, gaining coverage is likely to connect many currently uninsured adults to the health care system. Given the health profile of the currently uninsured population, there is likely to be some pent-up demand for health care services among the newly-covered. However, outreach may be needed to link the newly-insured to a regular provider and help them establish a pattern of regular preventive care. In particular, some individuals who have relied on emergency rooms or urgent care centers as their usual source of care may require help in establishing new patterns of care and navigating the primary care system. While the uninsured may have more options for where to receive their care once they obtain coverage under the ACA, clinics and hospitals that already see a large share of uninsured adults may play an important role in serving this population once they gain insurance. Last, while coverage gains may reduce cost barriers to coverage, it will be important to monitor whether other barriers to care among the low-income population—such as transportation or wait times for appointments—continue to pose a challenge for access.

IV. Health Coverage and Financial Security

In addition to facilitating access to health care, health insurance serves primarily to protect people from high, unexpected medical costs. However, for low-income families, health costs can still be a burden, even if they have insurance. Understanding these issues can help policymakers monitor ongoing financial barriers to health services.

Health care costs pose a challenge for low- and moderate-income families, even if they have insurance coverage. Even among those with insurance, health care costs can be a burden, particularly for low- and moderate-income adults. About a third low- and moderate-income adults covered by employer coverage report that their share is somewhat hard or very hard for them to afford, and 76% of the low-income and 58% of moderate income adults with nongroup coverage report such difficulty. Health care costs translate to medical debt for many l0w-income adults, and these medical bills can cause serious financial strain. Among those who reported a problem with medical bills, the vast majority in every coverage and income category reported that medical bills caused them to either use up all or most of their savings, have difficulty paying for necessities, borrow money, or be contacted by a collection agency. Notable shares of low-income insured adults also report that they lack confidence in their ability to afford health care, given their current finances and health insurance situation. Of particular note is the finding that about half of adults with nongroup coverage do not feel confident that they could afford costs related to a major illness given their coverage and financial situation.

Low-income families face fragile financial circumstances. Low- and moderate-income adults across coverage groups report not being financially secure. However, adults who are low-income and uninsured or covered by Medicaid are particularly vulnerable to financial insecurity even outside of health care. General financial insecurity translates to concrete financial difficulties in making ends meet. Uninsured adults and those on Medicaid are more likely than privately-insured adults to have difficulty paying for other necessities such as food, housing, or utilities, with 58% reporting such difficulty compared to 19% of those with employer coverage and a quarter of those with nongroup coverage. While low-income adults across the coverage spectrum report high rates of difficulty paying for necessities, those with employer coverage report the lowest rates in this income group. These individuals may have the stronger or more stable ties to employment than their counterparts with other or no insurance coverage.

Informing ACA Implementation: Both insured and uninsured low-income adults struggle with medical bills and debt, and coverage expansions, assistance with premium costs, and limits on out-of-pocket costs under the ACA have the potential to ameliorate the financial issues associated with the cost of health care. However, given survey findings that many low-income insured people continue to face financial challenges related to health care, it will be important to track whether there are ongoing financial barriers as people enroll in coverage and seek care. While insurance coverage can provide financial protection in the event of illness or injury, it is not curative of all of the financial burdens faced by low-income families. Given their overall situation, health insurance alone may not lift low-income people out of poverty, and many low-income adults may continue to face financial challenges even after gaining coverage.

V. Low- and Moderate-income Uninsured Adults’ Readiness for the ACA

As outreach and enrollment efforts are underway, information on low- and moderate-income adults’ access to tools for signing up and connections to outreach avenues can be helpful in addressing barriers. Key survey findings in this area include:

A majority of uninsured adults who are income eligible for coverage expansions reported knowing little or nothing about Medicaid and Marketplace programs prior to the start of open enrollment. Despite ongoing media attention to the ACA, seven in ten uninsured adults with incomes in the Medicaid target range (<138% FPL) said they knew nothing at all or only a little about their state’s Medicaid program, and eight in ten uninsured adults in the income range for Marketplace subsidies (139-400% FPL) reported that they knew nothing at all or only a little about the Marketplaces. More recent polling data indicates that lack of knowledge remains high despite recent media attention to the ACA.

While most uninsured adults have the necessary tools for enrolling in coverage, some will experience additional logistical issues in signing up. Under the ACA, internet access is an important tool in accessing coverage. While the majority of uninsured adults have access to the internet either at home or outside the home, 19% of low-income (<138% FPL) and 14% of moderate income (139-400% FPL) uninsured adults report that they do not have internet access readily available. For Marketplace coverage, people will require a means to pay their premiums on a regular basis. While plans must accept various forms of payment, direct withdrawal from a checking account is a simple and reliable way to ensure that premiums are paid on time. However, nearly a quarter (23%) of uninsured adults in the income range for Marketplace subsidies report that they do not have a checking or savings account.

Many uninsured adults could be reached through targeted outreach avenues. Among uninsured adults with incomes in the range for Medicaid eligibility (<138% FPL), over six in ten (62%) report that they or someone in their immediate family receives either SNAP, cash assistance, disability payments, or Medicaid or CHIP, making “fast track” enrollment efforts through using information collected by other agencies a promising avenue for outreach. For those without a connection to social services agencies, outreach through providers may be a promising approach, as about one in five low- or moderate-income uninsured adults report that they use a clinic or health center as their usual source of care. While fewer report using a hospital outpatient department for regular care, hospitals reach many uninsured adults through periodic visits.

Informing ACA Implementation: Both survey findings and more recent polling data indicate that there is a great need for education of new coverage options among people targeted for expansions. Even once eligible individuals learn about coverage options, they may face logistical challenges in signing up. People without internet access via a computer may be able to enroll through other more traditional avenues such as over the phone or in person at county offices or providers, but efforts may be needed to inform people of these other application routes, and some using them may experience slower enrollment process than they would if they applied online. Finally, “fast track” enrollment efforts are a promising approach to facilitating enrollment, but broader efforts will also be needed to reach the eligible uninsured population.