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Study: Newly insured to be poorer, less educated

October 8, 2012

New health insurance coverage created by the 2010 health reform law will attract a lower-income, less-educated and more diverse set of customers than the insurance markets that exist today, according to a new analysis by PricewaterhouseCoopers. And that could create challenges for doctors and hospitals trying to care for those patients.

The accounting firm’s Health Research Institute issued its predictions last week after analyzing government databases on the demographics of the insured and uninsured in America.

The law, called the Patient Protection & Affordable Care Act, is expected to extend coverage to an additional 30 million Americans either through the state-federal Medicaid program or through subsidies to buy private health insurance in online marketplaces called exchanges.

In Indiana, state officials have yet to decide whether to expand the state’s Medicaid program to cover adults with incomes up to 138 percent of the federal poverty limit. State officials also have until Nov. 16 to notify the federal government whether they will start a state-run insurance exchange or instead let Hoosiers use a federally run exchange.

PricewaterhouseCoopers expects one-third of the newly insured to gain coverage through Medicaid, 45 percent to shop on the exchanges and the rest to enroll in employer-sponsored plans.

These new customers will have about half as much income as those who are currently insured. Pricewaterhouse predicts the average newly insured person will earn 166 percent of the federal poverty limit, compared with an average of 333 percent for those who have health insurance today.

Those differences even factor out the fact that far more of the newly insured will be single—52 percent—than is the case among those with health insurance today, where the rate of single patients is 29 percent.

A big reason for that income gap is that only 42 percent of the newly insured will have full-time jobs, versus 59 percent of insured patients today. Another 31 percent of the newly insured will either be unemployed or have only a part-time job, compared with just 17 percent of those who are insured today.

Another reason for the expected income gap: differences in education levels. Among the newly insured, just 22 percent will have an associate’s degree or higher, the analysis said, compared with 48 percent who have that much education among today’s insured population.

There will be slightly more minorities among the newly insured—25 percent, compared to 21 percent among today’s insured Americans. But the bigger diversity will be in language. Among the newly insured, Pricewaterhouse predicts, 24 percent will speak Spanish as their first language, compared to just 7 percent of those who are currently insured.

“The new patient population is more likely to have difficulty with English and be unaccustomed to deciphering the vagaries of the health system,” wrote the Pricewaterhouse researchers. “And although the new group reports feeling healthy, physicians suspect there will be a range of undetected medical issues to address.”

One physician interviewed by the Pricewaterhouse team said that the influx of new patients who have not received much medical care in recent years—while helpful for doctors and hospitals financially—likely will create a huge initial strain on the system.

“Even the initial health care assessment might be a problem for some of those patients and providers,” said Dr. Georges Benjamin, executive director of the American Public Health Association. “Because they may not have seen a physician recently, they will require more hours of assessment and care.”

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