December 10, 2020

Affordable Care Act Indirectly Affects SSI

The Affordable Care Act (ACA) requires that insurance companies offer coverage to young adults with disabilities – like all young people – through their parents’ employer coverage until age 26.

So, up to this point, many adults with disabilities now have a viable way to get health services, independent of any government assistance. But at 26, that changes.

A Mathematica study finds that’s when some start applying to the federal Supplemental Security Income Program (SSI) – probably partly to gain access to Medicaid health coverage. Health insurance is critically important to people with disabilities, who often need expensive, specialized medical services. SSI’s purpose is to provide monthly cash assistance for living expenses if they lack financial resources and don’t have the work history required for federal disability insurance. SSI recipients also qualify automatically for Medicaid in a majority of states.

The researchers examined the trends in applications to SSI by people in their 20s before and after the Affordable Care Act’s 2010 passage. They found that the annual application rates among people right around their 26th birthdays have recently been 3.4 percent higher than what would be expected based on the steady pattern of overall age trends. This jump in applications at age 26 was not evident before the ACA – when people tended to lose parental insurance earlier in their 20s.

The number of SSI applications that were approved was also somewhat higher, according to the study, which was funded by the U.S. Social Security Administration.

The risk to young adults who go on SSI, the researchers said, is that they might develop a long-term dependence on the program’s cash assistance and Medicaid. And this, in turn, could discourage people with less severe disabilities from trying to work at a critical point in their lives, because SSI strictly limits how much money its recipients can earn. …Learn More

August 13, 2020

Workers Lacking 401ks Need a Solution

Although COVID-19 has exposed alarming gaps in a health insurance system that revolves around the employer, the Affordable Care Act is one potential solution for workers who lack the employer coverage.

There is nothing equivalent on the retirement side, however.

Many workers between ages 50 and 64 are in jobs that provide neither health insurance nor a retirement savings plan. But, in contrast to the health insurance options available to them, “no retirement sav­ing vehicle appears effective in helping older workers in nontraditional jobs set aside money for retirement,” concluded a new analysis of workers in these nontraditional jobs.

Nontraditional workers who want to save for retirement are left with two options: their spouse’s 401(k) savings plan or an IRA operated by a bank, broker or financial firm.

A spouse’s 401(k) hasn’t been an effective fallback for a couple of reasons. First, a substantial number of the workers who lack their own 401(k)s are not married. And second, if they are married to someone with a 401(k), they’re not any better off. The researcher found that married people currently contributing to 401(k)s do not save more to compensate for the spouse without a 401(k), reinforcing other research showing these couples don’t save enough for two.

The other option – an IRA – is open to everyone. But only a small fraction of Americans currently are saving money in IRAs, and most of them already have a 401(k). So IRAs, in practice, aren’t doing much for the people who need the help: workers who lack employer benefits. … Learn More

June 2, 2020

Home Care Reform’s Outcome a Surprise

Medicaid pays for care for six out of 10 nursing home residents.

To reduce the program’s costs, the Affordable Care Act (ACA) encouraged states to expand the care that people over 65 can receive in their homes or through community organizations. The hope was that they would delay or – even better for them – avoid moving into a nursing home if they had easier access to medical and support services.

Many states historically did not use Medicaid funding to pay for home care. The ACA’s Balancing Incentive Payments Program required the 15 states that chose to participate in the reform, including Nevada, Texas, Florida, Illinois, and New York, to increase spending on home and community care to half of their total Medicaid budgets for long-term care. By the end of the program, the states had met their goals of more balanced spending on home care versus nursing home care.

But four years after the reform went into effect in 2011, the states’ nursing home population had not changed, compared with the states that did not expand their services, according to a University of Wisconsin study for the Retirement and Disability Research Consortium. The researchers said one possible reason the reform didn’t reduce nursing home residence was that people who were never candidates for this care were the ones taking advantage of the alternative forms of care.

The analysis did find other unintended consequences of the shift in Medicaid funds to home and community care. First, somewhat more older people moved out of a family member’s house and were able to live on their own.

Second, as more people moved into their own place, costs may have increased for a different federal program: Supplemental Security Income (SSI) for low-income people. The increase had to do with how this program calculates financial assistance. SSI’s monthly benefits are based on an individual’s income. When retirees decide to live on their own, the housing, meals and other supports the family once provided are no longer counted as income. The drop in a retiree’s income means a bigger SSI check.

On the other hand, the Medicaid reform may have financial benefits for caregiving families, the researchers said.

The greater availability of home and community care for seniors – whether they live with family or on their own – frees up time for their family members to earn more money at paying jobs. …
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May 5, 2020

Layoffs Fray Health Insurance Network

The majority of Americans who have health insurance – some 150 million workers – get their coverage through their employers. But this network has suddenly developed a big hole in the midst of a pandemic.

The economic shutdown that is suppressing the coronavirus has thrown nearly 30 million people out of work – and taken away their health insurance. Millions more are expected to be laid off.

About 10 percent of the U.S. population did not have health insurance in 2018, Kaiser’s most recent estimate. This share will certainly increase sharply, but how high it goes and how quickly the situation will improve is hard to predict, given all the uncertainties, said Jennifer Tolbert, director of state health reform for the Kaiser Family Foundation.

The Affordable Care Act (ACA) does provide options that were unavailable to people who lost their jobs during the 2008-2009 recession. Even so, “there are still so many ways that people can lose insurance,” Tolbert said.

The coronavirus “highlights the still-existing gaps in our healthcare system and coverage,” she said.

Under the ACA, the newly unemployed potentially have two options: purchasing private policies on the state insurance exchanges or enrolling in the Medicaid program for poor and very low-income people.

Medicaid enrollment is available year-round for the newly unemployed and for low-paid workers whose hours have been cut, causing them to lose the insurance they had when they were full-time. But this program is not an option for thousands of laid-off workers in 14 states, including Florida and Texas. They will slip through the cracks, because their states have declined the ACA option to extend their programs to cover more residents.

Medicaid historically has provided health insurance for low-income parents with dependent children. Under the ACA, most states did expand their programs and now include adults who do not have children. The ACA also expanded coverage by increasing the income ceiling for Medicaid eligibility to 138 percent of the federal poverty level. …Learn More

March 5, 2020

State Uninsured Rates All Over the Map

A decade after the passage of the Affordable Care Act, about one out of every five Texans under age 65 still do not have health insurance. Georgia, Oklahoma and Florida are close behind.

The contrast with Hawaii, Minnesota, Michigan, and New Hampshire is stark – only about one in 20 of their residents lacked insurance in 2018, the most recent year of available data, according to the Kaiser Family Foundation’s annual roundup of insurance coverage in the 50 states.

Despite this glaring disparity, the share of Americans lacking coverage has dropped dramatically across the board, including in Texas. Texas’ uninsured rate fell from 26 percent in 2010 to 18 percent in 2018. This translates to 2.3 million more people with health insurance. (Large populations of undocumented immigrants in states like Texas can push up the uninsured rate.)

States that had fairly broad coverage even prior to the Affordable Care Act’s (ACA) 2010 passage didn’t have as far to fall. For example, Connecticut’s uninsured rate is 6 percent, down from 10 percent in 2010.

One upshot of these two trends is that the disparity between the high- and low-coverage states has shrunk. Certainly, the strong job market gets credit for reducing the ranks of the uninsured. But millions of Americans who don’t have employer insurance have either purchased a policy on the insurance exchanges or gained coverage when their state expanded Medicaid to more low-income residents under the ACA.

For example, just two years after Louisiana’s 2016 Medicaid expansion, the uninsured rate had fallen from 12 percent to 9 percent.

But the initial benefits of the ACA seem to have played out. The U.S. uninsured rate increased slightly, from 10 percent to 10.4 percent between 2016 and 2018.

The share of people who are underinsured is also rising, the Commonwealth Fund found in a recent analysis. …

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August 27, 2019

The ACA and Retirement: Is there a Link?

When older workers are able to get health insurance from a source outside of their jobs – Medicare, a spouse’s job, or an employer’s retiree health coverage – they become much more likely to decide it is time to retire.

So it’s reasonable to ask whether the Affordable Care Act, which provided millions of people with health insurance for the first time, has also helped to nudge more older workers into early retirement.

The answer, surprisingly, is no, according to a recent study for the University of Michigan Retirement and Disability Research Center.  This finding is important, because baby boomers who are poorly prepared financially to retire should be working longer – not retiring sooner – to improve their retirement outlook.

The researchers, who are at the University of Michigan and Vanderbilt University, estimated that the uninsured rate of 50- to 64-year-olds dropped substantially after the ACA went into effect in 2014 – from 16 percent in 2013 to 12 percent in 2016.  But when they tracked these older workers for several years, they found no evidence that they started retiring at a faster pace after the ACA established the state insurance exchanges and gave tax subsidies to people who purchased coverage on the exchanges.

The study also looked at whether retirement activity increased in response to a separate provision of the ACA: the expansion of the Medicaid health insurance program for low-income Americans.  The expansion, which was voluntary for each state, was achieved by increasing the income ceiling for eligibility. The federal government gave a financial incentive to states that broadened eligibility for Medicaid coverage, and about two-thirds of the states have expanded to date.

In comparing states that expanded their Medicaid programs to states that had not, the researchers again found virtually no change in low-income workers’ retirement trends.

There is widespread agreement that turning 65 and becoming eligible for Medicare motivates people to retire. So why is the ACA different?

One possible explanation is that the “political uncertainty” surrounding the ACA and Medicaid expansion “discourage[s] older workers from counting on them when making career decisions,” the researchers said. …Learn More

August 22, 2019

Health Plan Confusion and Bad Decisions

A popular idea for reducing healthcare costs is to arm consumers with detailed information about the prices of drugs and medical procedures so they can make smarter decisions.

But the academic community is reaching the opposite conclusion: people don’t understand the information they already have and are making bad decisions based on these misconceptions. The latest example is a survey of Wisconsin state workers who sometimes defer care because they are under the mistaken impression that they can’t afford it.

“Workers do not understand how health plans work, the role of deductibles, co-insurance and co-pays … and what goes into out-of-pocket costs,” concludes a report by the University of Wisconsin public affairs school, which surveyed 2,200 government workers.

Before getting into the specific findings, it’s important to note that Wisconsin’s employees are in an enviable position. They choose from just four health insurance options approved and overseen by the state. The broader implications of the report are more distressing, if one considers that millions of Americans buying insurance through the Affordable Care Act exchanges, Medicare Advantage plans, or Medicare Part D drug plans must sort through oodles of plan options with different copayments, deductibles, physician and hospital networks, or drug coverages.

The confusing patchwork of Part D plans hurts retirees’ pocketbooks, according to research in Health Affairs, which found that only one out of 20 retirees selects the cheapest drug plan to meet their medication needs. A different study found that health insurance buyers purchase overly expensive plans when they have to choose from a complex menu of options.

The Wisconsin report said state workers there are also overwhelmed: …
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