Racial and Income Disparities is Common in U.S. Health Insurance Sector

Health Insurance

The percentage of Americans without health insurance is currently much below than it was a decade ago, as there has been a significant rise in the insured numbers in the last few years. However, racial health disparities remain in the U.S. Native Americans and Hispanics along with African Americans and Hawaii natives are more likely to be uninsured compared to Whites. Though racial disparities have narrowed since the implementation of the Affordable Care Act, a lack of adequate health coverage is associated with poorer health outcomes. Besides color, low-income Americans are also likely to be uninsured. More than eight out of ten uninsured Americans have income below 400% of the poverty level.

Uninsured are Unaware of the ACA Benefits

Around 45% of the uninsured population is ineligible for financial assistance under the ACA, as some of the states have refused to expand Medicaid, lack of sufficient immigration documentation, or an income that makes them ineligible for subsidized premiums in the exchange. Though, the other 55% could potentially obtain affordable insurance due to the Affordable Care Act. People often don’t have an understanding of average medical insurance costs and the ACA benefits available to them.

Premium Subsidies keep Coverage Affordable

The ACA includes fairly generous premium tax credits to keep premiums affordable. It is a common misconception that subsidies are for people who require low-income health plan but subsidy-eligibility extends to middle-class also. Premium subsidies are available in 2020 for a family of five with a household income of over $120,000. A single individual qualify for premium subsidies with an income of $50,000.

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The government takes a generous approach to calculate income for subsidy eligibility. Contributions made to pre-tax retirement accounts or health savings accounts are made from an individual’s income. This enables people to earn more than these limits to qualify for premium subsidies. Premium subsidies are quite large for lower-income group people, resulting in affordable health insurance. Premium subsidies are so large for some of the enrollees that some of the health plans turn out to be of absolutely no cost after the subsidy is applied.

As premium subsidies depend upon the silver plan cost, the subsidies are currently larger compared to earlier. With the help of those subsidies, people can buy plans at any metal level, and in some areas, the subsidies are large to completely cover the cost of a bronze plan or sometimes even a gold plan. According to the Kaiser Family Foundation analysis, in 2018 around 4.2 million uninsured people were eligible for free bronze plans but many didn’t enroll for it due to lack of awareness. There are huge premium subsidies, especially in the states that use federally run exchange, it averages $539 per month in 2019 and around 87% of enrollees are receiving the subsidies.

Pre-existing Conditions Are Covered

Nowadays ACA-complaint plans, whether these plans are purchased in the exchange or outside the exchange, do not use medical underwriting. Thus, medical history is no longer a factor for determining premiums or eligibility, and pre-existing medical conditions are covered immediately after the policy becomes effective. Though pre-existing conditions are covered under all ACA-complaint plans, people with pre-existing conditions need to be careful about the provider networks along with the covered drug lists, to ensure that their current treatments are covered under the new plan.

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Low-Income Native Americans have Enhanced Coverage

Low-income Native Americans having income up to 300% of the poverty level can enroll in health plans through the exchange that does not include any out-of-pocket costs. Thus, such individuals ill have health plans with no deductible, copays, etc. Native Americans can enroll in a health plan all through the year, without having to wait for open enrollment. This provision was made just to reduce racial health disparities for Native Americans. Due to the ACA, though the uninsured rate among Native Americans has declined but remains much higher than the overall uninsured rate in the U.S.

CHIP and Medicaid Expansion

It is all due to the CHIP and Medicaid expansion under the ACA benefits that many low-income families qualify for free or greatly reduced cost health insurance coverage. With the majority of the states expanding Medicaid, it has played a crucial role in reducing health and low-income disparities. In every state, CHIP benefits are available, though its eligibility guidelines vary from state to state and even the low-income criteria vary from state to state.

Cost-sharing reductions

Individuals with income of up to 250% of the poverty level are eligible for cost-sharing reductions and these benefits are particularly strong for individuals with income up to 200% of the poverty level. The prime objective of the CSR is to make health insurance coverage robust for lower-income enrollees having a lower deductible and lower out-of-pocket costs. Half of the individuals enrolled through the exchange are receiving CSR benefits that have also played a crucial role in reducing low income and racial health disparities. Applicants need to select a silver plan to receive CSR benefits and due to these benefits the plan becomes much richer than a normal silver plan, and in some cases, the plan becomes as robust as a platinum plan. Bronze plans prove to be less expensive than silver plans, due to which applicants find it tough to decide between cheap health plans and plan that costs more but has much lower out-of-pocket costs. There is no one size fits all plan but people need to carefully consider all their options before picking a plan.

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