October Research Roundup: What We’re Reading

In honor of Halloween, this October CHIR’s Nia Gooding reviewed spooky studies on the projected impact of a repeal of the Affordable Care Act (ACA), troubling trends in the child uninsurance rate, and the ever-rising costs of employer-sponsored insurance coverage.

Blumberg, L, et al. The Potential Effects of a Supreme Court Decision to Overturn The Affordable Care Act: Updated Estimates, Urban Institute, October 2020. Researchers at the Urban Institute, supported by the Robert Wood Johnson Foundation, estimated the impact of overturning the ACA by looking at several metrics, including uninsurance rates, federal spending on health care, and demands for uncompensated care. 

What it Finds

  •  If the ACA is overturned: 
    • The national uninsurance rate is expected to increase by 69 percent in 2022, reflecting coverage loss for 21.1 million people. 
      • Uninsurance rates in the 37 states that expanded Medicaid eligibility under the ACA will more than double, while uninsurance rates in the remaining 14 states will increase by an average of 28 percent.
    • Uninsurance rates are expected to increase across all racial and ethnic groups; by approximately 85 percent for both Black people and white people, roughly 75 percent for both American Indians/Alaska Natives and people who are Asian/Pacific Islander, and over 40 percent for Hispanic people. In addition, gaps in coverage will widen between white people and these racial and ethnic groups. 
    • The elimination of premium tax credits and cost-sharing reductions would prompt 9.3 million people to lose income-based subsidies for marketplace coverage.
    • Coverage in Medicaid and CHIP is expected to decrease by 22 percent nationally, reflecting losses in coverage for an additional 15.5 million people.
    • Federal spending on health care is expected to decline by $152 billion annually, a decrease of 35 percent compared to current spending on marketplace subsidies and Medicaid acute care for the nonelderly.
    • Due to projected increases in the uninsured rate, the demand for uncompensated care is expected to rise by 74 percent, or $58 billion, with hospitals alone seeing a $17.4 billion increase in demand for uncompensated care in 2022.

Why it Matters: 

The ACA brought about significant coverage gains, bringing the uninsured rate down to an historic low. While the landmark legislation has survived several repeal attempts in Congress, in addition to numerous legal challenges, just this week, the Supreme Court heard another challenge to the ACA. If the nation’s highest court decides to overturn the law, tens of millions of people will become uninsured, placing a significant amount of strain on the healthcare system. As the study outlines, providers and consumers are likely to experience the financial consequences of an ACA repeal most immediately. And given the ACA’s impact in narrowing coverage disparities between white people and minority racial and ethnic groups, a repeal would have a disproportionate impact on people of color, who continue to suffer the worst of the COVID-19 pandemic and subsequent recession. While the future of the ACA remains uncertain, studies like this provide evidence of the legislation’s importance, and consequences that will reverberate across the healthcare system if it is overturned without an adequate replacement.

Alker, J. and Corcoran, A. Children’s Uninsured Rate Rises by Largest Annual Jump in More Than a Decade. Georgetown University Center for Children and Families, October 8, 2020. Researchers at Georgetown University’s Center for Children and Families (CCF) track trends in the child uninsured rate from 2016 to 2019 in this report. 

What it Finds

  • After reaching an historic low of 4.7 percent in 2016, the child uninsured rate began to rise in 2017, reaching 5.7 percent in 2019, reflecting an increase of roughly 726,000  children without health insurance. 
    • Given recent losses in employer-sponsored insurance coverage due to the COVID-19 pandemic, about 300,000 children are expected to lose coverage in 2020, in addition to increases that may have otherwise occurred before the pandemic.
  • As of 2019, the child uninsured rate in states that have not expanded Medicaid under the ACA is almost double the child uninsured rate in states that have expanded Medicaid.
  • The number of uninsured children increased during every year of the Trump Administration, with the largest increase between 2018 and 2019, when the number of uninsured children rose by 320,000, reaching a total of 4.4 million, the largest annual increase in the number of uninsured children in over ten years. 
  • A disproportionate number of uninsured children live in the South; 61 percent of the increase in the child uninsured rate occurred in this region. 
  • Although losses in children’s coverage were widespread across income, age, and race and ethnicity, they were largest among white and Latino children.
  • Losses in children’s coverage can largely be attributed to declines in Medicaid and CHIP enrollment. Factors driving the loss of public coverage include efforts to undermine the ACA, the Trump administration’s public charge rule and other actions creating a hostile environment for immigrant families, cuts to outreach and enrollment assistance, and barriers to enrolling and staying enrolled in Medicaid and CHIP. 

Why it Matters

Two years after the ACA’s coverage expansions went into effect, the child uninsured rate was at a historic low; under the Trump administration, the child uninsured rate had the largest increase in over a decade. In addition, the COVID-19 pandemic and economic recession are expected to further erode the ACA’s gains in children’s coverage. Federal actions, such as cuts to enrollment outreach efforts and policies that create a hostile environment for immigrant families, have caused hundreds of thousands of coverage losses for children. As a result, they are missing key health services during a critical time in their lives, while their families are forced to make impossible decisions about where to allocate limited resources during a pandemic and recession. Policymakers should take swift action to reverse this troubling trend.

Claxton, G, et al. 2020 Employer Health Benefits Survey. Kaiser Family Foundation, October 8, 2020. The Kaiser Family Foundation’s annual Employer Health Benefits Survey outlines trends in employer-sponsored insurance (ESI), including metrics on premium costs, employee contributions, cost-sharing provisions, and health and wellness programs. 

What it Finds

  • Similar to the last five years, 56 percent of all firms offered health benefits to at least some of their employees in 2020. The offer rate is lower among small firms (55 percent) and higher among large firms (99 percent).
  • Average annual premiums for ESI were $7,470 for single plans and $21,342 for family plans, reflecting a 4 percent increase over 2019 rates.
    • In the past five years, the average premium for family coverage has risen by 22 percent, which is more than inflation (10 percent) and employee earnings (15 percent).
    • On average, covered workers contributed 17 percent of premiums for single coverage and 27 percent of premiums for family coverage, with an average worker contribution of $1,243 for single coverage and $5,588 for family coverage.
  • Eighty-three percent of covered workers have a general annual deductible for single coverage, similar to last year but up from 70 percent of covered workers ten years ago.
  • The average deductible was $1,644 for single coverage, similar to 2019. This number was higher for workers in high-deductible health plans, who had an average general annual deductible of $2,303, and in small firms, where workers across plans had an average general annual deductible of $2,295 for single coverage.
  • Among firms with 50 or more workers offering health benefits, 85 percent cover the provision of some service through telemedicine in their largest plan, a substantial increase from  2019 (69 percent). 

Why it Matters

This annual survey provides key insights into trends and developments in the employer insurance market. However, fielding of the survey (between January and July of 2020) took place before and during the early part of the COVID-19 pandemic and subsequent recession. Given the ongoing pandemic, it is unclear how offer rates, costs for employers and employees, and benefit design may change in the months ahead. What is clear is that health care costs are rising at an unsustainable pace for employers and workers alike.

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