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Middle-Income Consumers Drop Private Coverage

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Problems in the commercial health insurance market may be overwhelming the ability of the Affordable Care Act premium tax credit program to help middle-income people stay covered.

Analysts at the U.S. Centers for Disease Control and Prevention have published data on middle-income U.S. residents’ declining use of private major medical insurance, and rising uninsurance rates, in a new batch of National Health Interview Survey data. 

The report covers survey results collected during the first half of 2017. A copy of the full report is available here.

The ACA provides premium tax credit subsidies, but not cost-sharing reduction subsidies, for people with income from 250% to 400% of the federal poverty. Those people often must pay substantially more than $100 per month out of pocket for individual major medical coverage purchased through the ACA public exchange system.

For U.S. adults who were ages 18 to 64 during the survey period, with income in that 250% to 400% of federal poverty level category, the percentage with private health coverage fell to 76.5% in the first half of 2017, from 78.3% in the first half of 2016.

For the adults in that difficult age and income category, the percentage who were completely uninsured jumped to 12.2%, from 10.2%.

(Related: Average Short-Term Health Premium Creeps Lower)

Adults with income in the 250% to 400% of federal poverty level category suffered a bigger increase in uninsurance, year-over-year, than people in any other income category.

During the first half of this year, the overall uninsured rate for all U.S. residents held steady at 9%.

The overall rate for people ages 64 and younger may have increased to 10.5%, from 10.4% in the first half of 2016. But the margin of error was 0.3 percentage points. From the perspective of statisticians, the overall uninsurance rate for the first half of the 2017 was the same as the rate for the comparable period in 2016.

The uninsurance rate for people with income under 100% of the federal poverty level, who often qualify for Medicaid or similar programs, improved, and the uninsurance rates for people who were eligible for CSR studies, or who earned too much to qualify for any subsidies, stayed about the same.

Insurers increased their individual major medical premiums substantially for 2017, and again for 2018.

The ACA premium tax credit subsidy and CSR subsidy appear to eliminate most of the effect of those increases for people with income under 250% of the federal poverty level, and blunt the effect for people with income from 250% to 400% of the federal poverty.

The new survey report also implies that consumers have been more likely to keep private insurance in place in states that run their own ACA public exchange programs, or support, than in states that have resisted cooperating with ACA programs.

In states with state-based exchange programs, for example, the percentage of residents 18 to 64 with private insurance increased to 70.4% this year, from 69.5% in the comparable period in 2016. The uninsurance rate in those states fell to 8.3%, from 8.6%.

In states that do not have a state-based exchange, or help promote, the percentage of people with private insurance edged lower, to 68.4%, from 68.5%. The uninsurance rate in those states increased to 16.1%, from 15.7%. 

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