Is ACA Coverage Affordable for Low-Income People? Perspectives from Individuals in Six Cities

Millions of people have gained access to health insurance coverage under the Affordable Care Act (ACA) through Medicaid and the Marketplaces. While research shows that coverage improves access to care and promotes financial stability, issues around access and affordability remain, and are more acute for the low-income population. To learn more about how low-income individuals have fared with their new coverage, we conducted nine focus groups (three groups with Medicaid enrollees and six groups with low-income Marketplace enrollees) in six states (California, Florida, Maryland, Missouri, Ohio, and Virginia).  Many participants were struggling financially and reported substantial debt (including medical debt). Many had ongoing physical and mental health needs and were accessing health services to treat those conditions. Following are key themes from the groups:

1. New coverage did not change underlying financial struggles and hardship due to medical debt incurred prior to gaining coverage. Many participants were stretched financially, had limited capacity to absorb unexpected costs, and struggled with finding secure employment in their area.
2. Medicaid stands up well for the lowest income participants in terms of ease of enrollment, out-of-pocket costs and affordability, and ability to find providers and access care. A small number of participants reported trouble affording care that wasn’t covered (particularly for vision or dental) and difficulty finding some providers, including mental health providers.
3. Largely due to premium tax credits in the Marketplace, premiums were generally affordable, but out-of-pocket costs weighed heavily on Marketplace participants, especially those with high deductible plans. Many reported being overwhelmed by plan choices. Some were able to make trade-offs to purchase higher cost plans with lower deductibles to meet anticipated care needs, but not everyone was able to afford higher premiums.
4. The fear of unknown costs was a constant worry for many Marketplace participants. Many got bills for services they thought were covered, such as screenings, colonoscopies and mammograms when issues were discovered and treated. These bills caused many to avoid getting needed care. Marketplace participants also reported trouble affording care that wasn’t covered by their plan, notably vision and some dental services.
5. Most participants had accessed care and were positive overall about new ACA coverage through Medicaid and the Marketplace. They were grateful that coverage was available to them, particularly those who had been previously ineligible for Medicaid or barred from private coverage due to pre-existing conditions. However, many Marketplace participants wanted coverage to be more affordable.

Introduction

Since the implementation of the Affordable Care Act in 2010, millions of people have gained health coverage through health insurance Marketplaces and expanded Medicaid in states that have opted to adopt the Medicaid expansion. This new coverage has improved access to care and provided financial protection against medical expenses for many.¹ However, affording this coverage is a problem for some. Particularly for low-income individuals with private insurance through the Marketplaces, premiums and out-of-pocket costs can be difficult to afford, creating barriers to accessing needed care. Although Medicaid offers protection from premiums and deductibles, some beneficiaries may still face challenges getting the care they need. Additionally, problems paying medical bills continue to plague many, even those with insurance.² These problems can be especially acute for low and moderate-income individuals and families, many of whom are burdened by debt and struggle to pay monthly bills.

The ACA expanded Medicaid to nearly all nonelderly adults with incomes at or below 138% of the federal poverty level (FPL).  With the June 2012 Supreme Court ruling, the Medicaid expansion effectively became optional for states, and as of January 2016, 31 states and DC had expanded Medicaid eligibility under the ACA. In states that did not adopt the expansion, individuals with incomes between 100-138% FPL are eligible for tax credits in the Marketplace, but Marketplace coverage has more out-of-pocket costs than Medicaid.

This report is based on focus group discussions with low and moderate income adults who gained Medicaid or Marketplace coverage following the implementation of the ACA. It explores several areas about their coverage, including their experiences signing up for coverage; their knowledge of what their plan covers and what factors they weighed in choosing their plan; what they pay for their coverage and their perceptions of whether these costs are affordable; their experiences accessing care; and the impact of out-of-pocket costs on their ability to get needed care. Building on other research in this area, this report provides valuable insights into the ongoing financial struggles facing low-income individuals and the problems they confront affording health coverage.

Methods

The findings are based on nine focus group discussions conducted by the Kaiser Family Foundation and Belden Russonello Strategists in six cities during January and February 2016. Sites included Baltimore, MD; Richmond, VA; Columbus, OH; St. Louis, MO; Oakland, CA; and Tampa, FL.  Three of these cities are in states that have expanded Medicaid—California, Maryland, and Ohio—and in these sites, we conducted separate focus groups with individuals (income 50-138% FPL) who were enrolled in Medicaid and with those enrolled in coverage through the Marketplace (income 139-250% FPL). In the three non-expansion states—Florida, Missouri, and Virginia—we conducted focus groups only with individuals (income 100-250% FPL) who were enrolled in coverage through the Marketplace. Annual income at 138% FPL is equal to $16,242 for an individual and $27,724 for a family of three in 2015.  Annual income at 250% FPL is equal to $29,700 for an individual and $50,400 for a family of three.

Each focus group consisted of 9-11 participants, with a total of 91 participants including 30 covered by Medicaid and 61 covered through the Marketplace.  Participants were selected to provide a mix of demographic characteristics, including age, race/ethnicity, marriage status, and work status.  All individuals had used services since obtaining their current coverage and most reported having at least one chronic condition. Additionally, all reported that they had trouble affording some aspect of their current coverage, including premiums, deductibles, and/or copayments. (For more details on participants see Appendix A).

Prior to enrolling in their current coverage, three-quarters of those with Medicaid were previously uninsured while about half of those with Marketplace coverage were uninsured. Across both groups, the length of time that participants were uninsured ranged from a few months to many years, with several participants reporting they had been uninsured their entire adult lives. Most participants were aware of the coverage options available through the ACA and signed up when the coverage became available in 2014 or when they lost their previous coverage.  Most participants said they learned about new coverage options through the news and media, were eager to have coverage, and signed up when the coverage became available. Some, however, were motivated to sign up to avoid paying the penalty.  Often the reason for signing up influenced how they chose their plans.