Key Facts on Health Coverage for Low-Income Immigrants Today and Under Health Reform

Kaiser Commission on Key Facts
February 2012
As of 2010, there were 38 million immigrants residing in the United States, accounting for 12.5 percent of the total population. They include 16.7 million naturalized citizens and 21.4 million non-citizens, including both lawfully present and undocumented individuals. The Pew Hispanic Center estimates there were 11.2 million undocumented immigrants in the United States as of 2010, accounting for about 3.7 percent of the total population.
In 2010, the median annual household income for non-citizens was $25,000, roughly half the amount for citizen households.
Health coverage for naturalized citizens is very similar to that of U.S.-born citizens, with the majority covered through employer-sponsored or other private coverage. However, non-citizens are three times as likely as U.S.-born citizens to be uninsured due to lower rates of both public and private coverage.
Coverage Options for Immigrants Under Health Reform
Almost all uninsured non-citizens have household incomes that would qualify for Medicaid or tax credits for exchange coverage under reform, but many will continue to face immigrant eligibility restrictions.
The Medicaid expansion will make many lawfully present immigrants newly eligible for the program, particularly low-income adults who have very limited eligibility for Medicaid today. However, the five-year wait for coverage will remain in place, limiting eligibility for many lawfully present immigrants, although states will maintain the option to eliminate the waiting period for lawfully residing children and pregnant women.
Lawfully present immigrants without access to affordable employer based coverage will be able to purchase health coverage in the new exchanges, and those with incomes up to 400 percent of poverty will be eligible for tax credits. This will include lawfully present immigrants with incomes below 133 percent of poverty who are unable to enroll in Medicaid due to the five-year waiting period.
Undocumented immigrants will remain ineligible for Medicaid and will be ineligible for tax credits and prohibited from purchasing coverage through an exchange, even at full cost.
Safety-net providers will remain a major source of care for immigrants. Today, uninsured individuals, including many uninsured immigrants, often rely on community health centers and clinics for their care. Safety-net providers are seen as a trusted source for care and are able to offer culturally and linguistically appropriate services that meet the needs of diverse populations. Under reform, these providers will likely remain a primary source of care for millions of newly insured individuals, including lawfully present immigrants, as well as citizens and non-citizens who remain uninsured after 2014.
http://www.kff.org/uninsured/upload/8279.pdf

Everyone should have health care. How well will the Affordable Care Act (ACA) work for our immigrant population? It depends partly on immigration status.
The ACA provisions apply to naturalized citizens just as they would for native-born citizens. Thus their barriers will be the same as for most of the rest of us. They will face the same issues of whether or not the subsidies will be adequate to purchase private plans, and whether or not they will be exposed to excessive cost sharing with inadequate subsidies when accessing care.
Non-citizen immigrants are faced with the additional problem of having household incomes that average only half that of the U.S. median. Those who are lawfully present also must wait for five years before they are eligible for the Medicaid program. They will be eligible to purchase programs in the new exchanges, though the subsidies will likely be inadequate for those with incomes that already don’t cover other essential needs.
For immigrants who are undocumented, Congress decided to yield to the forces of anti-immigrant politics, and not only make them ineligible for tax credits for the exchange plans, but also to prohibit them from purchasing the plans with their own funds, even at full cost. It is very unfortunate that Congress co-mingled heath care justice with immigration policy. The sanctity of human life should always prevail over the politics of ideology.
Yes, some will receive excellent care from our safety-net providers, but many will not. Community health centers cannot possibly fill in the full void in coverage.
Most undocumented workers are productive individuals, just like our citizens, and there is no reason that they should not contribute to and participate in a single payer national health program that covers everyone – absolutely everyone.

Covering People with Pre-Exisiting Conditions: Report on the Implementation and Operation of the Pre-Existing Condition Insurance Plan Program

CMS
February 23, 2012
Before the Affordable Care Act, Americans with pre-existing conditions who did not receive health coverage through their employers had few affordable options to get the care they needed. In most States, insurance companies could refuse to sell them coverage, charge exorbitant premiums, or offer them coverage that excluded benefits for their health conditions.
The law ends discrimination against people with pre-existing conditions.
As a bridge to 2014, when these protections apply to all Americans, the law created a new program designed to help the tens of thousands of Americans who have been locked out of the insurance market due to their health conditions. The Pre-Existing Condition Insurance Plan or PCIP is a temporary high-risk health insurance program that makes health coverage available and more affordable immediately to individuals who are uninsured and have been denied health insurance by insurance companies because of a pre-existing condition. Twenty-seven States are operating their own program, often in coordination with existing State High Risk Pools, and 23 States and the District of Columbia have opted to have a Federally-operated program.
The PCIP program will continue to provide affordable coverage to consumers who are enrolled and will facilitate their transition to Affordable Insurance Exchanges in 2014.
Enrollment as of December 31, 2011: 48,879
http://www.cciio.cms.gov/resources/files/Files2/02242012/pcip-annual-report.pdf

Under the Affordable Care Act (ACA), 48,879 previously uninsurable people with serious medical problems are receiving essential health care services under the pre-exisiting condition insurance program. We can’t celebrate this gain because far too many people are still left out. It is a mere glimmer that doesn’t light our path to reform. But temporarily we should accept what limited benefits ACA does provide, instead of trying to repeal it, while we work on a program that actually is going to take care of everyone – an improved Medicare for all.

California health insurers to raise average rates 8% to 14%

By Chad Terhune
Los Angeles Times, February 23, 2012
California’s largest health insurers are raising average rates by about 8% to 14% for hundreds of thousands of consumers with individual coverage, outpacing the costs of overall medical care.
Anthem has proposed raising premiums 9.6% to 13.8% on average, effective May 1 or July 1, for about 700,000 individual policyholders and their family members.
Nonprofit Kaiser Permanente increased premiums 9% on average for nearly 300,000 customers last month.
Blue Shield of California, also a nonprofit, is boosting average rates by 7.9% for 265,000 members and by 8.9% for 56,000 members, both effective March 1.
The cost of goods and services associated with medical care grew just 3.6% over the last 12 months nationally, government figures show. But insurance premiums have kept climbing at a faster pace in California.
Insurers defended their rate hikes, saying they are based on their claims experience with the customers they insure and not just the broader rate of medical inflation. They also say that healthier members dropped out of the individual market as premiums rose and the economy worsened in recent years, leaving behind a group of policyholders who have higher average costs.
http://www.latimes.com/business/la-fi-0223-health-insurance-rate-hikes-20120223,0,7634380.story

Why should individual health insurance premiums continue to increase at a rate much greater than the cost of goods and services associated with medical care?
One of the most important reasons is that health insurance is now so expensive that many individuals who consider themselves to be healthy are choosing to go without coverage. Those who have health care needs make greater efforts to retain their insurance, thereby concentrating high-cost individuals within the insurance risk pools. This is known as adverse selection.
As the insurance premiums continue to increase, a greater number of healthier individuals will find the premium costs to be intolerable and will drop out, driving premiums up even higher – a phenomenon known as the death spiral of insurance premiums.
One purpose of the Affordable Care Act (ACA) was to correct such dysfunctions of the private insurance industry. Can we really expect adverse selection with skyrocketing insurance premiums to go away once the Act is fully implemented?
Keep in mind that in the individual market insurers have been using one of the most effective tools to reduce adverse selection. They have refused to cover individuals with greater health care needs, filling their risk pools with healthier individuals – favorable selection. That is now going away. They are going to be required to insure all applicants. That will surely drive up the premiums for the populations expected to be served by the state insurance exchanges.
Under ACA, it is also predicted that 23 million individuals will remain uninsured. A very large percentage of these individuals, who otherwise likely would have participated in the insurance exchanges, will not because of the unaffordable premiums – unaffordable even with the subsidies. Some will remain uninsured based on affordability exemptions in ACA, but some will simply not comply and be subject to penalties which the government may or may not be able to collect. These will be healthier individuals since those with needs will make greater efforts to obtain coverage. More adverse selection.
So once we’ve established the state insurance exchanges, what can we expect? Very high premiums due to adverse selection. A mediocre benefit package based on state small group plans. Very low actuarial values which shift the costs of health care to the very individuals who have greater needs. In other words, UNAFFORDABLE UNDER-INSURANCE will be the new standard in America.
We’re a better country than that. Let’s fix Medicare and provide it for everyone.

By John Schmitt
Center for Economic and Policy Research, February 2012

In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979.

Coverage problems are particularly severe for Latino workers. Almost 40 percent of all Latino workers (not just low-wage workers) have no health insurance of any form. African American (about 22 percent) and Asian (about 17 percent) workers are also much less likely to have coverage than white workers (about 12 percent).

Affordable Care Act of 2010

For simplicity, if we assume that all adults – workers and non-workers – have the same coverage rate, then under CBO’s projections, workers as a group would have a 5.8 percent non-coverage rate after the ACA. By comparison, in 2010, the actual non-coverage rate for all workers was about 17.7 percent. The CBO gives no guidance about how the coverage improvements for workers would be divided across the wage distribution. If, at the extreme, we assume that all of the uncovered workers are low-wage workers by our definition – that is that all 5.8 percent of workers remaining without coverage are in the bottom quintile – then the non-coverage rate for low-wage workers would be about 29.0 percent. This would be a reduction of one-fourth in the share of low-wage workers without coverage relative to the actual non-coverage rate for low-wage workers in 2010 (38.5 percent). A less extreme assumption about the distribution of non-coverage rates by wage level after the ACA would produce larger gains for low-wage workers. For example, if instead we assume that the top 80 percent of workers have a frictional 3 percent non-coverage rate, then an overall non-coverage rate for workers of 5.8 percent implies a 17.0 percent non-coverage rate for low-wage workers, well short of universal coverage, but a non-coverage rate that is less than half of the current rate.

The ACA will not produce universal coverage for low-wage workers. But, if the ACA is not enacted – due to judicial or legislative action – every indication is that coverage rates will continue their three-decades-long decline.

http://www.cepr.net/documents/publications/health-low-wage-2012-02.pdf

Comment: 

By Don McCanne, MD

Conservatives who oppose health care reform often argue that being uninsured is a consequence of the individual’s own personal irresponsibility. Those individuals merely need to shape up and go out and get a job, and then they would have health insurance. The conservatives lose their credibility on this point when the actual data show that 38 percent of low-wage workers, who do go out and get a job, lack health insurance from any source.

Because of such deficiencies in our system reform advocates were able to muster the political support to pass the Affordable Care Act – a half-glass reform. Those who view this as a glass half full celebrate the fact that over half of these uninsured workers will become insured under ACA.

The advocates of reform who view this as a glass half empty bemoan the fact that ACA will still leave about 17 percent of low-wage workers without insurance. The diversionary half full, half empty debate is particularly tragic when you consider that a single payer national health program would have brought us a full glass.

The addendum below is from this same report. It is added because it explains the roots of the decline in coverage rates – an important concept indicating that our battle for health care justice is only a part of the offensive that must take place to expedite social justice throughout the United States.

ADDENDUM

The decline in coverage rates has its roots in two long-standing economic processes. The first is the rising cost of health care, which has squeezed workers’ wages and made it less economical for firms to offer health insurance, especially to low-wage workers. In the absence of reforms to the existing health-care system, these costs – and implicitly the pressure on workers’ after-health-insurance compensation – are projected to continue rising indefinitely.

The other force behind falling coverage rates, especially for low-wage workers, is the decline over the last three decades in the bargaining power of most workers. Beginning in the late 1970s, a set of structural changes in the economy has significantly reduced the bargaining power of workers, especially those at the middle and the bottom of the wage distribution. These structural changes include: a steep decline in unionization; an erosion in the inflation-adjusted value of the minimum wage; the deregulation of many historically high-wage industries (trucking, airlines, telecommunications, and others); the privatization of many state and local government functions (from school cafeteria workers to public-assistance administrators); the opening up of the U.S. economy to much higher volumes of foreign trade; a sharp rise in the share of immigrant workers, who often lack basic legal rights and operate in an economy that provides few labor protections regardless of citizenship; and a macroeconomic policy environment that has typically maintained the unemployment rate well above levels consistent with full employment. All of these changes have acted to reduce the bargaining power of workers, especially those at the middle and bottom of the wage distribution. As a result, workers as a group have seen their relative (and even absolute) wages fall and the availability and quality of health-insurance and retirement plans decline.

Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond

By John Schmitt
Center for Economic and Policy Research, February 2012
In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979.
Coverage problems are particularly severe for Latino workers. Almost 40 percent of all Latino workers (not just low-wage workers) have no health insurance of any form. African American (about 22 percent) and Asian (about 17 percent) workers are also much less likely to have coverage than white workers (about 12 percent).
Affordable Care Act of 2010
For simplicity, if we assume that all adults – workers and non-workers – have the same coverage rate, then under CBO’s projections, workers as a group would have a 5.8 percent non-coverage rate after the ACA. By comparison, in 2010, the actual non-coverage rate for all workers was about 17.7 percent. The CBO gives no guidance about how the coverage improvements for workers would be divided across the wage distribution. If, at the extreme, we assume that all of the uncovered workers are low-wage workers by our definition – that is that all 5.8 percent of workers remaining without coverage are in the bottom quintile – then the non-coverage rate for low-wage workers would be about 29.0 percent. This would be a reduction of one-fourth in the share of low-wage workers without coverage relative to the actual non-coverage rate for low-wage workers in 2010 (38.5 percent). A less extreme assumption about the distribution of non-coverage rates by wage level after the ACA would produce larger gains for low-wage workers. For example, if instead we assume that the top 80 percent of workers have a frictional 3 percent non-coverage rate, then an overall non-coverage rate for workers of 5.8 percent implies a 17.0 percent non-coverage rate for low-wage workers, well short of universal coverage, but a non-coverage rate that is less than half of the current rate.
The ACA will not produce universal coverage for low-wage workers. But, if the ACA is not enacted – due to judicial or legislative action – every indication is that coverage rates will continue their three-decades-long decline.
http://www.cepr.net/documents/publications/health-low-wage-2012-02.pdf

Conservatives who oppose health care reform often argue that being uninsured is a consequence of the individual’s own personal irresponsibility. Those individuals merely need to shape up and go out and get a job, and then they would have health insurance. The conservatives lose their credibility on this point when the actual data show that 38 percent of low-wage workers, who do go out and get a job, lack health insurance from any source.
Because of such deficiencies in our system reform advocates were able to muster the political support to pass the Affordable Care Act – a half-glass reform. Those who view this as a glass half full celebrate the fact that over half of these uninsured workers will become insured under ACA.
The advocates of reform who view this as a glass half empty bemoan the fact that ACA will still leave about 17 percent of low-wage workers without insurance. The diversionary half full, half empty debate is particularly tragic when you consider that a single payer national health program would have brought us a full glass.
The addendum below is from this same report. It is added because it explains the roots of the decline in coverage rates – an important concept indicating that our battle for health care justice is only a part of the offensive that must take place to expedite social justice throughout the United States.
ADDENDUM
The decline in coverage rates has its roots in two long-standing economic processes. The first is the rising cost of health care, which has squeezed workers’ wages and made it less economical for firms to offer health insurance, especially to low-wage workers. In the absence of reforms to the existing health-care system, these costs – and implicitly the pressure on workers’ after-health-insurance compensation – are projected to continue rising indefinitely.
The other force behind falling coverage rates, especially for low-wage workers, is the decline over the last three decades in the bargaining power of most workers. Beginning in the late 1970s, a set of structural changes in the economy has significantly reduced the bargaining power of workers, especially those at the middle and the bottom of the wage distribution. These structural changes include: a steep decline in unionization; an erosion in the inflation-adjusted value of the minimum wage; the deregulation of many historically high-wage industries (trucking, airlines, telecommunications, and others); the privatization of many state and local government functions (from school cafeteria workers to public-assistance administrators); the opening up of the U.S. economy to much higher volumes of foreign trade; a sharp rise in the share of immigrant workers, who often lack basic legal rights and operate in an economy that provides few labor protections regardless of citizenship; and a macroeconomic policy environment that has typically maintained the unemployment rate well above levels consistent with full employment. All of these changes have acted to reduce the bargaining power of workers, especially those at the middle and bottom of the wage distribution. As a result, workers as a group have seen their relative (and even absolute) wages fall and the availability and quality of health-insurance and retirement plans decline.

By Timothy Jost
Health Affairs Blog, February 18, 2012

On December 16, 2011, the Department of Health and Human Services issued a bulletin describing the approach that it intended to take to defining the essential health benefits (EHB) that individual (nongroup) and small group plans must cover under the Affordable Care Act.

The EHB bulletin raised a host of questions as to how this approach would work.  On February 17, 2012, HHS issued guidance in the form of an FAQ (frequently asked questions) addressing some of these questions. This post will discuss this FAQ.

Summing up:

The FAQ do go some distance toward clarifying a number of the issues left open by the initial bulletin, in particular how plan flexibility will (and will not) work, that states will not establish a new EHB every year, and that a state’s commercial plan EHB need not apply to Medicaid. The approach selected by HHS will allow states to maintain their coverage mandates (or at least those that apply to the small group market) until 2016, but will preclude the addition of new mandates. It is still hard to imagine how this is all going to work out in practice, however, and more to the point how plan compliance will ever be monitored, given the ability of plans to substitute services within categories. One must wonder whether in the end it might not have been more straightforward simply to come up with a federal menu of services.

http://healthaffairs.org/blog/2012/02/18/implementing-health-reform-essential-health-benefits-and-medical-loss-ratios/

CMS – FAQs on essential health benefits:
http://cciio.cms.gov/resources/files/Files2/02172012/ehb-faq-508.pdf

Comment: 

By Don McCanne, MD

Being the fine gentleman he is, Professor Jost politely states, “One must wonder whether in the end it might not have been more straightforward simply to come up with a federal menu of services.”

You don’t have to wonder. Not only should we have a national standard calling for comprehensive benefits for everyone, we also should have simplified the financing system to make it more equitable and much more efficient so that health care would be accessible and affordable for everyone.

Implementing Health Reform: Essential Health Benefits And Medical Loss Ratios

By Timothy Jost
Health Affairs Blog, February 18, 2012
On December 16, 2011, the Department of Health and Human Services issued a bulletin describing the approach that it intended to take to defining the essential health benefits (EHB) that individual (nongroup) and small group plans must cover under the Affordable Care Act.
The EHB bulletin raised a host of questions as to how this approach would work.  On February 17, 2012, HHS issued guidance in the form of an FAQ (frequently asked questions) addressing some of these questions. This post will discuss this FAQ.
Summing up:
The FAQ do go some distance toward clarifying a number of the issues left open by the initial bulletin, in particular how plan flexibility will (and will not) work, that states will not establish a new EHB every year, and that a state’s commercial plan EHB need not apply to Medicaid. The approach selected by HHS will allow states to maintain their coverage mandates (or at least those that apply to the small group market) until 2016, but will preclude the addition of new mandates. It is still hard to imagine how this is all going to work out in practice, however, and more to the point how plan compliance will ever be monitored, given the ability of plans to substitute services within categories. One must wonder whether in the end it might not have been more straightforward simply to come up with a federal menu of services.
http://healthaffairs.org/blog/2012/02/18/implementing-health-reform-essential-health-benefits-and-medical-loss-ratios/
CMS – FAQs on essential health benefits:
http://cciio.cms.gov/resources/files/Files2/02172012/ehb-faq-508.pdf

Being the fine gentleman he is, Professor Jost politely states, “One must wonder whether in the end it might not have been more straightforward simply to come up with a federal menu of services.”
You don’t have to wonder. Not only should we have a national standard calling for comprehensive benefits for everyone, we also should have simplified the financing system to make it more equitable and much more efficient so that health care would be accessible and affordable for everyone.