Reform Update: Nearly 60% of ACA enrollees had been uninsured, Kaiser survey finds

Among Americans who purchased health insurance through the Obamacare exchanges, the percentage of those who were previously uninsured may be twice as high as earlier estimates indicated, according to survey results released today by the Henry J. Kaiser Family Foundation.

Nearly six in 10 people who obtained insurance in the new marketplaces were uninsured just prior to buying coverage, Kaiser reported, with the majority having been uninsured for at least two years. And nearly half of that group had gone without insurance coverage for at least five years.

That's much higher than the percentage of previously uninsured enrollees reported in previous studies from the RAND Corp. and McKinsey & Co., (PDF) which had estimated one-third or less of new-marketplace enrollees were previously uninsured.

The latest findings are important because, although the Patient Protection and Affordable Care Act was designed to reduce the large number of uninsured Americans, critics have argued that most people getting healthcare coverage under the law already had insurance. A number of surveys over the last two months have shown that the U.S. uninsured rate has dropped significantly, which is consistent with the Kaiser survey's findings.

“Most were uninsured because insurance was too expensive, or they didn't have access to employer coverage,” said Drew Altman, president and CEO of the nonpartisan Kaiser Family Foundation. “The ACA appears to have been a big motivator.”

Income-based premium subsidies have made a significant difference in helping people pay for coverage, said Dean Clancy, a former senior White House health policy official in the George W. Bush administration. “When you give people subsidies, they will take them,” he said. “It's certainly a way to help get people covered.”

The survey found that those who received subsidies held a more favorable view of the healthcare reform law, and among those who reported receiving subsidies to help them purchase a plan, 60% said they benefited from the ACA. But among those who had their coverage canceled within the past year because their plans did not meet Obamacare requirements, nearly 57% viewed the ACA in a negative light.

“It's a mixed bag at best,” Clancy said. It's also too early to draw many conclusions from the data, both in terms of the impact on the uninsurance rate and public perception. “There's too many unknowns with premiums, cost-sharing, employer dumping and skinny networks,” Clancy said. “If I were uninsured, I'd be happy to find coverage. But I might be sad when I realized how costly and skimpy it is. It remains to be seen how happy people will be as they actually use their coverage.”

The Kaiser survey was based on a nationally representative sample of 742 adults who purchased their own coverage. It was conducted in April and early May, so some respondents had little or no experience in using their health plan.

But plan switchers indicated that their new exchange coverage is similar to the coverage they had previously, the survey reported.

The survey also found:

• 34% of surveyed enrollees said they benefited from the new healthcare law, while 29% said they were adversely affected
• 55% rated their coverage as an excellent or good value, while 39% said it was a fair or poor value
• 43% said it is difficult to pay their premiums
• 46% are not confident they could afford their share of the cost of a major illness or injury

The findings suggested that the Obamacare market for individual coverage “is working far better than critics say it is, but probably not as well as advocates hoped it would be,” Altman said.

Recent data released from the U.S. Census Bureau in its Quarterly Services Survey show that hospital revenues are down from the fourth quarter of 2013, indicating that consumers have not been rushing en masse to use their new Obamacare insurance, said Yevgeniy Feyman, a fellow at the conservative Manhattan Institute.

That's despite the fact that the enrollees in ACA-compliant plans reported somewhat worse health than those in pre-ACA plans, according to the Kaiser survey. It found that 20% of those with exchange coverage rated their health as fair or poor.

Insurers are setting their rates for 2015 based on whether their predictions about the health status of Obamacare enrollees are accurate, so they are watching the issue closely. “We expect the sickest to enroll,” Feyman said.

Previous estimates of the number of people who had their individual insurance policies canceled because they weren't compliant with ACA requirements were generally far too high, according to an analysis published by Health Affairs. Last October, the news media and Congress estimated some 4.8 million health insurance policies had been canceled. But subsequent surveys and analyses from the Urban Institute, the Commonwealth Fund and the RAND Corp. put that number closer to 2 million canceled policies. And though a portion of those estimated 1.9 million individuals had to pay higher premiums for their ACA policies, they were typically more the exception than the rule, the analysis said.

Cities in states that expanded Medicaid under Obamacare will see far fewer uninsured residents compared with cities in non-expansion states. That's based on a report out today from the Robert Wood Johnson Foundation that shows that by 2016, Medicaid-expanding states will experience, on average, a 57% decline in uninsured residents. That's compared to a 30% reduction in states that did not expand the program. The projections by Urban Institute researchers were based on a look at 14 large and demographically diverse U.S. cities, seven of which are in states that did not expand Medicaid, and seven of which are in states that made that election.

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