Millions of middle class Americans will remain uninsured despite Obamacare

Commentary: no-man's land captures those too rich for subsidies but too poor for sanctions



Gov. Bill Haslam, left, speaks with lawmakers in Murfreesboro, Tenn., about his proposal to extend health coverage to 280,000 low-income Tennesseans. A special session to take up the matter is scheduled to begin on Monday, Feb. 2, 2015. 

Erik Schelzig/AP

The good news from last week’s Congressional Budget Office report was that Obamacare will cost 20 percent less through 2019 than originally expected. That’s in  part because medical inflation has slowed more than the CBO anticipated back in 2010 when the law went into effect.

But the report had bad news too.  Fewer people are signing up for coverage than the government had hoped. In fact, the CBO estimates that 31 million of us will still be uninsured 10 years from now.

The Supreme Court bears some of the responsibility on that front.  It ruled in 2012 that even though Congress intended for all the states to expand their Medicaid programs to include more low-income individuals and families, states could opt out of that requirement. And many with Republican governors and legislatures did. .

The other main reason for the sobering estimate of uninsured 10 years down the road:  many people still can’t afford to buy health insurance, even with financial help from the government.

Back in 2010, the CBO predicted that 13 million people would have signed up for coverage by the end of this year through the Obamacare exchanges—which have been operating in every state and the District of Columbia since the fall of 2013.   The CBO revised its projection downward last week to 12 million, but the actual number very likely will be less than that. The Obama administration’s enrollment target for 2015 is just 9 million.

The CBO projects that health plan enrollment on the exchanges will jump to 21 million next year and that an additional 16 million previously uninsured Americans will be covered by either Medicaid or the Children’s Health Insurance Program by the end of 2016.

The vast majority of the people who have enrolled in exchange plans so far have had incomes so low they were eligible for federal subsidies to help them pay their premiums.

But millions of other people earn just a little too much to qualify for financial help from the government, and many of them are choosing to remain uninsured.

Although the Obama administration and Congressional Democrats who voted for the law don’t talk much about it, a significant percentage of the population will always be in a kind of no-man’s land. They earn too much to quality for either Medicaid or federal subsidies, but they also earn too little to be penalized for not buying it.

The law states that most people who remain uninsured have to pay a penalty, but many people are exempt from that provision for various reasons.

Probably the largest category of folks exempted from the penalty (which is 2 percent of household income in 2015, up to a maximum of $975) are those for whom the cost of the lowest priced policy available to them—even after their employer’s contribution or a federal subsidy—would still exceed more than 8 percent of their household income. Other so-called hardship exemptions are available for people who have filed for bankruptcy or been evicted in the past six months.

This means that the majority of the 31 million the CBO believes will still be uninsured 10 years from now will probably be middle-income folks —people who would like to be insured but just can’t make the numbers work.

About a third of those 31 million will likely be undocumented residents, but a lot of them might actually be in a better position to get coverage—and care—than many middle-class families who can’t find an affordable health plan. A bill introduced in the California General Assembly in December would create a separate, state-sponsored exchange for the millions of undocumented workers and their families in that state. Several California counties already fund clinics that provide free or low-cost care to the undocumented.

And now an increasing number of Republican governors are pursuing waivers from the federal government to expand Medicaid in their states, albeit with some shared-responsibility requirement. Indiana just became the 28th state to expand. Its plan, just approved by the feds, would require enrollees to contribute a few bucks to a health savings account every month. In Tennessee, the legislature will go into special session today to consider a similar plan from Gov. Bill Haslam. It, too, would  require many Medicaid enrollees to contribute something to the cost of their care. The federal government is weighing similar requests from Utah and Wyoming.

All that’s good. The more people with coverage, the better. But I haven’t seen any proposals from anyone yet to help the folks in the middle class who are falling through the cracks. 

Wendell Potter is the author of Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans and Obamacare: What’s in It for Me? What Everyone Needs to Know About the Affordable Care Act.

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