Low-income and minority populations have the most to lose from the repeal of Obamacare
Since the passage in 2010 of the Affordable Care Act (ACA) — also known as Obamacare — more than 20 million Americans have gained health insurance coverage, causing the national uninsured rate to drop to a historic low of 10 percent.
Even more noteworthy, however, are the groups that have experienced the largest increases in coverage under the country’s most expansive healthcare reform law.
According to the U.S. Department of Health and Human Services (HHS), the uninsured rate dropped from 22.4 to 10 percent among African Americans and from 41.8 to 30.5 percent among Hispanics. Non-citizen legal immigrants, low-income individuals, and part-time and low-wage workers also experienced some of the largest increases in coverage, which has helped reduce healthcare disparities related to socioeconomic status.
“Before the ACA, people of color, low-income individuals, and immigrants all had much higher uninsured rates compared to white, higher-income people and native-born citizens,” says Samantha Artiga, associate director for the Commission on Medicaid and the Uninsured at the Henry J. Kaiser Family Foundation. “This helps improve their access to and utilization of care and provides their families increased financial protection from high medical costs.”
But many fear these gains will be for naught following the election of Donald Trump, who during the campaign repeatedly vowed to repeal Obamacare. While nothing can be certain until Trump takes office in January, his choice of an ardent and longtime critic of Obamacare, Georgia Rep. Tom Price (R), as head of HHS signifies to many the law’s imminent demise.
The Impact of Repeal
To understand what repeal might look like, one has only to examine the ACA’s impact. While it may be too early to draw any conclusions, Artiga says that those who have gained the most under the law have the most to lose.
“I think it’s really difficult to speculate about what might happen under repeal because there are so many details that are not yet known,” she says. “However, looking at the coverage gains that have occurred under the ACA and who has benefited from them provides us insight into whose coverage is really at stake when we’re discussing repeal.”
One of the most prominent provisions of Obamacare, the expansion of Medicaid, is cited as having the most significant impact on health insurance coverage. The program is targeted at low-income Americans and was previously limited to groups such as children, pregnant women, the elderly, and individuals with disabilities. Under the ACA, Medicaid was expanded to cover adults with incomes up to 138 percent of the poverty level — which translates to $16,400 a year for a single adult or about $20,000 for a family of three. Artiga says this change played an important role in increasing coverage for immigrants and minorities.
“The Medicaid expansion component has been particularly important for these groups because they are disproportionately low-income, so they are more likely to fall in that income range,” she says. “And when we look at enrollment data [through August 2016] for Medicaid, we see that net enrollment has grown by more than 15.7 million people since before the ACA.”
Impressive as that figure may be, it would have been much higher had all states adopted the expansion. However, a ruling by the U.S. Supreme Court made the provision a state option, which only 32 states implemented. “In the states that did not expand [Medicaid], there are about 2.6 million adults who fall into a coverage gap, and that’s because they earn too much to qualify for Medicaid because it remained at those low-eligibility levels.”
African Americans would have likely experienced more gains in coverage had all states enacted the expansion. In fact, according to The New York Times, “blacks … disproportionately live in states that chose not to expand Medicaid,” and 60 percent of poor blacks live in states that did not change eligibility limits.
The second main coverage expansion under the ACA was the creation of health insurance marketplaces in each state. Designed to provide federal tax credit subsidies to individuals with incomes between 100 and 400 percent of the poverty level — from $11,880 to $47,520 for one person — these marketplaces have helped millions of low-income individuals and families gain and pay for health insurance.
Trump has made clear his intent to cut both health insurance tax subsidies and Medicaid expansion provisions. He could easily accomplish such cuts through a maneuver called “reconciliation,” which involves defunding the initiatives. This move alone could cause tens of millions of Americans to lose coverage.
According to a report released in June by the research think tank Urban Institute titled The Cost of ACA Repeal, 24 million Americans would become uninsured by 2021 if the ACA were repealed next year. Nearly 9 million fewer people would have insurance through the health insurance marketplace, while 14.5 million would lose Medicaid coverage. And the impact on underrepresented and low-income populations would be disproportionate.
Matthew Buettgens, PhD, senior research associate with the Urban Institute and co-author of the report, says of those who would lose coverage, 30 percent have incomes below the poverty line, while another 20 percent have incomes between 100 and 150 percent of this level; 23 percent are aged 25 to 34; about two-thirds are working families; 66 percent have a high school education or less; and 50 percent are non-Hispanic whites.
The Cost of Care
Much of the criticism of Obamacare is due to its expense. According to estimates by the Congressional Budget Office, should it continue, the program will cost the federal government $1.34 trillion over the next 10 years. However, although premiums are higher — a result of less competition because some insurers have pulled out of the health insurance marketplace — data reveal that the cost of insurance today is actually less than it would have been without the ACA.
A study by the Kaiser Family Foundation shows that while average family premiums grew 20 percent from 2011 to 2016, this rate of increase is much lower than in previous years. Between 2006 and 2011, this figure rose 31 percent, and from 2001 to 2006, it increased 63 percent. According to Buettgens, along with the cost savings afforded by the ACA, Americans are receiving more comprehensive healthcare coverage.
“Paying more for a more comprehensive plan does not necessarily make you worse off,” he says, adding that hospitals have also experienced decreases in uncompensated care because of uninsured patients — a fact confirmed by Rachel Garfield, PhD, a senior researcher at the Kaiser Family Foundation.
“What we’ve seen under the ACA is that when people come in with insurance coverage, they don’t have to pay anything or very little out of pocket for those services, and the hospital’s bad debt goes down,” she says.
Should the ACA be repealed, however, this “bad debt” would increase, causing more hospitals, insurance providers, and — to some extent — taxpayers to shoulder the costs. Federal healthcare spending would decrease by $927 billion over the next decade, while state spending would increase by $68.5 billion over the same period, according to the Urban Institute’s report.
“The federal government would spend less on healthcare, but state and local governments as a whole would end up spending more because of increased uncompensated care for the uninsured,” says Buettgens. “However, it is important to note that the financial effects of repeal would differ between states, particularly given whether or not they expanded Medicaid. Also, healthcare providers would spend more on uncompensated care.”
Although Trump has vowed to repeal and replace Obamacare — it’s No. 5 on his action plan list for his first 100 days in office — many believe a full repeal is unlikely. Still, he will be able to make significant changes to the law by defunding parts of it. Without a specific plan for how to replace it, though, many Americans fear being stranded without insurance come January.
Thus far, Trump’s ideas for healthcare reform — which are largely reflective of the plan proposed by soon-to-be HHS Director Price, should his appointment be confirmed by Congress — have included lifting restrictions that prohibit the sale of health insurance across state lines, expanding the use of health savings accounts to bolster savings for medical purposes, allowing prescription drug importation, and allowing premiums to be fully tax deductible. Many have criticized this plan, asserting that it would help the rich and healthy while harming the poor, the sick, and the elderly.
“I will say that a lot of these are ideas that have been around for quite some time and have either been tried or studied extensively and have shown … not to have a huge impact on the big problem in healthcare, which was, before the ACA, 40-plus million people [without] health insurance coverage,” Garfield says.
Some policy analysts, however, believe the ACA won’t look much different under a President Trump. And in fact, the president-elect has already indicated his intent to keep certain provisions of the law, including the pre-existing condition requirement and allowing children to remain on their parents’ insurance until they are age 26.
It is unclear how well Trump’s proposals will make up for the losses caused by repeal. However, without subsidies and the current Medicaid expansions, coverage will likely remain elusive for millions of low-income individuals, minorities, and immigrants — and the inequalities we saw ameliorated by the ACA will likely re-emerge.●
Alexandra Vollman is the editor of INSIGHT Into Diversity.