Impact of Repeal on the Number of Insured Pennsylvanians

The below blog post is take from the PBPC report, “Devastation, Death, and Deficits: The Impact of ACA Repeal on Pennsylvania.”

The first, and most important, aim of the Affordable Care Act was to reduce the number of uninsured Americans by means of two different policies. Americans with incomes too high to receive Medicaid but at or below 138% of the federal poverty line ($16,242 for a single individual and $33,465 for a family of four) can receive health insurance if their state expands Medicaid. Americans with incomes above 138% of the federal poverty line can purchase health insurance on a state or federally-run health care exchange, also known as a health care marketplace. Individuals and families with incomes up to 400% of the federal poverty line ($47,520 for a single individual and $97,200 for a family of four) are eligible to receive tax credits that reduce the costs of insurance purchased on the exchange. Those with lower incomes in this range are also eligible to receive cost-sharing reductions that limit their out of pocket health care costs.

Reduction in the Uninsured Rate in 2015

One indication of the success of the Affordable Care Act is the decline in the rate of uninsured Pennsylvanians. As chart 1, which relies on Census Bureau data shows, in 2011, 11.1% of Pennsylvanians were uninsured. The rate declined to 9.7% in 2013, 8.5% in 2014 and then fell to 6.4% by 2015. [1]

The rate dropped slowly in part because the state was slow to embrace the expansion of Medicaid, and our examination below of the details of who received health insurance through the ACA in Pennsylvania suggests that it continued to drop through 2016 (although full-year data to confirm this are not yet available).

Chart 1

Repeal of the ACA is likely to reverse this decline in the uninsured rate entirely. To understand why, we have to look at the details of who receives health insurance under the ACA and how they do so.

Medicaid Expansion

The Pennsylvania Department of Human Services estimates that roughly 685,000 Pennsylvanians receive health insurance as a result of Medicaid expansion.[2] Table 1 breaks the numbers down by Congressional districts and shows that Pennsylvanians in every corner of the state and in both urban and rural districts benefit from this program.

The second largest group of Pennsylvanians who receive health insurance under the Affordable Care Act are those who purchase health insurance in the exchange/marketplace.

In the first quarter of 2016, 412,347 Pennsylvanians received health insurance in the ACA marketplace. Of those people, 321,345 received a tax credit that averaged $248 a month. Of those receiving tax credits, 227,304 also received cost-sharing reductions that limited their out-of-pocket costs.

We believe it is likely that all of the 321,000 people who receive support from the federal government to purchase health insurance will lose their insurance if the ACA is repealed. Without subsidies through tax credits and cost-sharing reductions, almost all of these people will be unable to purchase insurance. A small number may be able to secure more expensive, yet affordable, insurance through their workplace or that of their spouse.

What about the 91,000 Pennsylvanians who do not receive any federal support for purchasing health insurance in the ACA marketplace? Changes in the non-group insurance market brought about by the partial repeal of the ACA might make it difficult for them to receive coverage.

The Non-group Health Insurance Market

In addition to the 91,000 people who do not receive any government support to purchase health insurance in the ACA marketplace. Another 427,172 Pennsylvanians purchase non-group insurance with no subsidy outside the ACA marketplace. For reasons we explain in Appendix 2, we expect that the non-group health insurance market will largely collapse in Pennsylvania and that 75% of these 518,000 people will lose their insurance if the ACA is repealed.

How Many Pennsylvanians Will Lose Health Insurance if the ACA is Repealed?

Chart 2 and Table 2 summarize our analysis of the number of people we expect to lose their health insurance if major parts of the ACA are repealed through the reconciliation process.

As explained above, we expect 585,000 of the 685,000 who receive health insurance under Medicaid expansion to lose their insurance as a result of repeal. We expect all 321,000 of those who secure health insurance through the marketplace with tax credits (and in some cases cost sharing reductions) to lose their insurance. We expect 75% of both the 91,000 who are insured through the marketplace without tax credits and the 472,000 who purchase insurance through the non-group market to lose their insurance. This gives us a sub-total of 1,294,500 Pennsylvanians who would lose insurance. We expect that a small portion of these losses will be offset by a number of people returning to employer-provided insurance either because they or their spouse were already eligible for such insurance at their job or secured a new job that included insurance. Our estimate of 150,000 is based on the two observation that between 2013 and 2015, the number of Pennsylvanians securing insurance through their employer declined by roughly 300,000. Looking at the previous rate of decline in employer based insurance, we attribute half of that decline to a reduction in the number of businesses offering insurance and the other half to employees who purchased cheaper insurance in the marketplace. Thus we assume that half of those people might return to employer-based insurance.[3]

Adding our estimate of the number of Pennsylvanians who return to employer-based insurance, we project that that over 1.1 million Pennsylvanians will lose health insurance as a result of partial repeal of the ACA.[4]

Chart 2

  Table 2

The Impact on Children

The data available from government agencies does not allow us to replicate our approach to estimating the impact of ACA repeal on health insurance for children. We can, instead, rely on the simulation conducted by the Urban Institute. I found that repeal of the Medicaid expansion and tax credits and subsidies for marketplace insurance will lead to a more than doubling of the number of children who are uninsured in Pennsylvania from 95,000 to 202,000. The uninsurance rate would climb from 3.4% to 7.2%. These results presume that Pennsylvania would make no changes in its Medicaid and CHIP coverage for children. If repeal of the ACA includes repeal of the provision requiring states to maintain their effort providing health care to children, and the state reduced its commitment to children to the minimum level, 546,000 children would be uninsured and the uninsurance rate for children would rise to 19.4%.

Maintaining insurance for children is crucial to the future of our Commonwealth. A substantial body of research shows that there are long-term benefits of providing health insurance for children. Not only do they have better health, but they do better in school and complete more education, and have higher life-time earnings. Those benefits ultimately flow to all of us.[5]

The Impact on Health

We do not have space to discuss in detail the impact on the health of the previously uninsured who have secured health insurance under the ACA. But it is important to recognize that health insurance matters, and enables people to live healthier and financially more stable lives. A study of the Medicaid expansion in Oregon showed that those who had secured health insurance self-reported that their health and mental status improved.[6] A study of Massachusetts health care reform showed that the new insurance led not only to self-reported improvements in physical and mental health but a decline in mortality.[7] Other research has shown that the proportion of non-elderly adults who say that they are in fair or poor health, or say that their activities are limited by health problems, drops as coverage is expanded.[8] Studies of other state Medicaid expansion that took place before the ACA all lead to the same conclusion.[9] Research on the impact of CHIP has shown that access to health insurance in childhood reduces later life risk of hospitalization and death.[10]

All these studies, and others as well, provide us with evidence that expanding health insurance coverage improves health, well-being, and longevity. Other provisions of the ACA besides expansion of insurance coverage have led to improvements in health. The provision that allows young adults to stay on their parent’s health care plan has been shown to lead to improvements in self-reported health status.[11] 

How Many Will Die Prematurely?

The impact of lack of health insurance on premature death has been a subject of great controversy over the last few years, with early studies that claimed a substantial impact coming under scrutiny for their methodological flaws.[12] That some states have embraced Medicaid expansion and others have not has created a natural experiment that has allowed researchers to look at the impact of health insurance on mortality by comparing the experience of states that expanded Medicaid with those that did not.[13] This study found that mortality rates in states that did not expand Medicaid were higher by 19.6 deaths per 100,000 people. Applied to Pennsylvania, that means expanding Medicaid in the Commonwealth reduces the number of deaths in the state by 2,350 people. About half as many people received health insurance in Pennsylvania by receiving a tax credit in the marketplace as through Medicaid expansion. Thus, it is reasonable to suppose that another 1,175 premature deaths are prevented each year by that part of the ACA. And note that this study looks at the impact of providing insurance to people in only one year. It does not take into account the long-term effect of people being insured consistently on treatment for chronic diseases that get worse when not treated.

Repeal of the ACA without a replacement as good is likely to lead to at least an additional 3,525 deaths per year in the Commonwealth.

[1] United States Census Bureau, 2015 American Community Survey, 1-Year Estimates. https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_15_1YR_CP03&prodType=table, accessed January 17, 2017.

[2] The disparity between the estimate that 685,000 people statewide receive health insurance under expanded Medicaid and the total for 18 Congressional districts of 672,000 is due to the difficulty in determining in which Congressional district a small number of Medicaid recipients live.

[3] The Urban Institute estimates that in the wake of repeal of the ACA the percentage of Americans securing insurance through their employer would increase by 1%. Our estimate doubles that percentage partly on the grounds that Pennsylvania has a higher percentage (58% vs 54%) than the nation as a whole of people who receive insurance through their employer We also adopt a more conservative approach in order to give the reader more confidence in our approach. The Urban Institute projection can be found in Linda J. Blumberg, Matthew Buettgens, and John Holahan, Implication of the Partial Repeal of the ACA Through Reconciliation, Urban Institute, December 2016. http://www.urban.org/research/publication/implications-partial-repeal-aca-through-reconciliation, accessed January 14, 2017.

[4] While there are many elements in our projection that are uncertain, we note that we are in the same ballpark as the Urban Institute, which estimates that 956,000 Pennsylvanians would lose health insurance as a result of repeal of the ACA. We believe that our more fine-grained and Pennsylvania-specific approach, which relies largely on administrative information about actual enrollments in Medicaid and the health insurance marketplace, gives us more a more accurate tally of who received health insurance as a result of the ACA than the Urban Institute’s numbers, which rely on their micro-simulation health care model which that generates estimates for all 50 states. That our results are still quite close to those the Urban Institute does increase our confidence in them.

[5] For summaries of this research see: “Medicaid at 50: Covering Children Has Long-term Educational Benefits,” Center on Budget and Policy Priorities, July 7, 2015, http://www.cbpp.org/blog/medicaid-at-50- covering-children-has-long-term-educational-benefits, “Medicaid at 50: Cuts Poverty, Boosts Financial Health,” Center on Budget and Policy Priorities, July 27, 2015, http://www.cbpp.org/blog/medicaid-at-50-cuts- poverty-boosts-financial-health, and “Medicaid’s Long-Term Earnings and Health Benefits,” Center on Budget and Policy Priorities, May 12, 2015, http://www.cbpp.org/blog/medicaids-long-term-earnings-and-health- benefits. These summaries include direct links to the original research papers for more detailed information.

[6] Finkelstein, Amy, et al. 2012. “The Oregon Health Insurance Experiment: Evidence from the First Year.” The Quarterly Journal of Economics 127(3): 1057-106, 2012 and Baicker, Katherine, et al. “The Oregon Experiment – Effects of Medicaid on Clinical Outcomes.” New England Journal of Medicine 368(18): 1713-22, 2013.

[7] Van der Wees, Philip J., Alan M. Zaslavsky, and John Z. Ayanian. “Improvements in Health Status after Massachusetts Health Care Reform.” The Milbank Quarterly 91(4): 663-89, 2013 and Sommers, Benjamin D., Sharon K. Long, and Katherine Baicker. “Changes in Mortality After Massachusetts Health Care Reform: A Quasi-Experimental Study.” Annals of Internal Medicine 160(9): 585-93, 2014.

[8] Sommers, Benjamin D., et al. 2015. “Changes in Self-Reported Insurance Coverage, Access to Care, and Health Under the Affordable Care Act.” The Journal of the American Medical Association 314(4): 366-74.

[9] Sommers, Benjamin D., Katherine Baicker, and Arnold M. Epstein. “Mortality and Access to Care Among Adults After State Medicaid Expansions.” The New England Journal of Medicine 367(11): 1025-34, 2012. http://www.nejm.org/doi/full/10.1056/NEJMsa1202099#t=article, accessed January 18, 2017.

[10] Wherry, Laura R., et al. “Childhood Medicaid Coverage and Later Life Health Care Utilization.” NBER Working Paper 20929. Cambridge, MA: National Bureau of Economic Research, 2015; Brown, David W., Amanda E. Kowalski, and Ithai Z. Lurie. “Medicaid as an Investment in Children: What Is the Long-Term Impact on Tax Receipts?” NBER Working Paper 20835. Cambridge, MA: National Bureau of Economic Research, 2015; and Wherry, Laura R., and Bruce Meyer. “Saving Teens: Using a Policy Discontinuity to Estimate the Effects of Medicaid Eligibility.” Journal of Human Resources 51(3): 556-88, 2016.

[11] Barbaresco, Silvia, Charles J. Courtemanche, Yanling Qi. “Impacts of the Affordable Care Act Dependent Coverage Provision on Health-Related Outcomes of Young Adults.” Journal of Health Economics 40(C): 54-68, 2015.

[12] Richard Kronick, Health Insurance Coverage and Mortality Revisited, Health Serv Res. 2009 Aug; 44(4): 1211–1231.
http://onlinelibrary.wiley.com/store/10.1111/j.1475-6773.2009.00973.x/asset/j.1475-6773.2009.00973.x.pdf;jsessionid=3D3D2B5F029AD090F8F4173E548AF45E.f01t02?v=1&t=iy2tyx03&s=3543d1e540e14c30b89a2a03a8685f684bef21d4, accessed January 18, 2017.

[13] Benjamin D. Sommers, M.D., Ph.D., Katherine Baicker, Ph.D., and Arnold M. Epstein, M.D. Mortality and Access to Care among Adults after State Medicaid Expansion.