If all states expand Medicaid, Obamacare still leaves millions uncovered

September 10, 2013

I wrote a story in Monday's paper that looked at the 31 million people who are expected to remain uninsured under the new health care law. One common response I got to this piece was to blame Republican governors who had opted against expanding their Medicaid program.

That's part of the explanation for why we'll still have millions of uninsured people with the health law in place, but it's definitely not the entire explanation.

The Congressional Budget Office estimated back in 2012, before the Supreme Court even gave states the option of opting out of the Medicaid expansion, that there would be 27 million people who lacked health insurance coverage under the Affordable Care Act.

Since the Supreme Court decision, the CBO has subsequently updated its estimates to project 31 million people without health insurance coverage. When we talk about the impact of Republican governors opting out of the Medicaid expansion, we're really talking about the difference of 4 million people between the 2012 and 2013 forecasts. That's certainly not nothing, especially if you're one of those 4 million people. But it's also not the bulk of Obamacare's uninsured.

So, who are the rest of them? Matthew Buettgens wrote an excellent paper on this for the Urban Institute back before the Supreme Court decision. He estimates that more than half of those without health insurance would fall into two categories: Undocumented immigrants (who are ineligible for the insurance expansion) and people who are eligible for Medicaid but not enrolled).

"Medicaid and CHIP have never achieved anything like 100 percent enrollment of those eligible," Buttegens told me recently. "Even in states that have done a good job with outreach, they're way below 100 percent, maybe around 60 percent. So even with the increased outreach under the Affordable Care Act, we're projecting take up rates in the range of 70 to 75 percent."

 I asked Buttegens for his thoughts on why you have this wide swath of people who could sign up for a program, but don't end up enrolling.

"Some of the reasons are people who don't know that they're eligible," he says. "There are a lot of different programs, and if people apply for the wrong program first, they might fall through the cracks and not figure out what they're eligible for. There's significant effort involved in their part, and people often need assistance in being guided to the right application."

Renewals can be another point where beneficiaries drop off the rolls if they don't file the correct forms.

The health care law does include a number of assistance programs, which is why the Urban Institute projects slightly higher take up of Medicaid than what we have right now.  But they certainly don't expect everyone to sign up for the newly-expanded programs.

As for the rest of the uninsured under Obamacare, Buttegen's work estimates that some will have an affordability exemption: They won't be able to find a health insurance plan that costs less than 8 percent of their income, which means they don't have to pay a penalty for not carrying insurance coverage. Others will find affordable coverage but simply decide not to buy it. And they'll all be among Obamacare's uninsured, regardless of whether a state expands Medicaid.

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Dylan Matthews | September 10, 2013