{"subscriber":false,"subscribedOffers":{}} The Affordable Care Act’s Coverage Expansions Will Reduce Differences In Uninsurance Rates By Race And Ethnicity | Health Affairs
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Research Article

The Affordable Care Act’s Coverage Expansions Will Reduce Differences In Uninsurance Rates By Race And Ethnicity

Affiliations
  1. Lisa Clemans-Cope ( [email protected] ) is a senior research associate and health economist at the Urban Institute’s Health Policy Center, in Washington, D.C.
  2. Genevieve M. Kenney is a senior fellow at the Urban Institute’s Health Policy Center.
  3. Matthew Buettgens is a senior research associate at the Urban Institute’s Health Policy Center.
  4. Caitlin Carroll is a research assistant at the Urban Institute’s Health Policy Center.
  5. Fredric Blavin is a research associate at the Urban Institute’s Health Policy Center.
PUBLISHED:May 2012Free Accesshttps://doi.org/10.1377/hlthaff.2011.1086

Abstract

There are large differences in US health insurance coverage by racial and ethnic groups, yet there have been no estimates to date on how implementation of the Affordable Care Act will affect the distribution of coverage by race and ethnicity. We used a microsimulation model to show that racial and ethnic differentials in coverage could be greatly reduced, potentially cutting the eight-percentage-point black-white differential in uninsurance rates by more than half and the nineteen-percentage-point Hispanic-white differential by just under one-quarter. However, blacks and Hispanics are still projected to remain more likely to be uninsured than whites. Achieving low uninsurance under the Affordable Care Act will depend on effective state policies to attain high enrollment in Medicaid and the Children’s Health Insurance Program and the new insurance exchanges. Coverage gains among Hispanics will probably depend on adoption of strategies that address language and related barriers to enrollment and retention in California and Texas, where almost half of Hispanics live. If uninsurance is reduced to the extent projected in this analysis, sizable reductions in long-standing racial and ethnic differentials in access to health care and health status are likely to follow.

TOPICS

A growing body of research has examined the likely effects of the Affordable Care Act of 2010 on health insurance markets and coverage at the national and state levels. According to estimates from the Congressional Budget Office, under full implementation the Affordable Care Act will reduce the number of uninsured people by thirty-two million in 2019. 1

Studies have examined how the law’s effects will be distributed by characteristics such as geography, age, and income. 2,3 However, no research has yet assessed its potential impact by racial and ethnic group. This omission exists even though some have advocated for coverage expansions as a primary strategy for reducing racial and ethnic differentials in health. 4

Large differentials in health insurance coverage by racial and ethnic group are a long-standing feature of coverage in the United States. 5 In 2010, uninsurance rates among the nonelderly were 2.6 and 1.8 times higher for Hispanics and blacks, respectively, than for non-Hispanic whites. 6 Ample evidence demonstrates that uninsured people are more likely than their insured counterparts to have unmet medical needs and worse health outcomes. 7,8 In addition, differential rates of health insurance coverage by race and ethnicity are associated with differences in access to health care related to factors such as citizenship, income, and employers’ offers of health insurance. 4,5,9

Assuming that the US Supreme Court upholds the constitutionality of the Affordable Care Act, the law is expected to expand coverage substantially, but an estimated 23–26 million people are expected to remain uninsured. 1,10 The extent to which the Affordable Care Act might reduce existing differentials in coverage is unknown.

A recent study of the Massachusetts 2006 reform initiative, upon which the Affordable Care Act was modeled, underscores the complexity of the issue. 11 That study’s authors found that the state law greatly reduced the rate of uninsurance among racial and ethnic minority groups but did not reduce racial and ethnic differentials in coverage or access to care, in part because of comparable or larger improvements among nonminorities and the overall low baseline rate of uninsurance in the state.

Key Coverage Provisions

The Affordable Care Act aims to extend coverage through three key initiatives: an expansion of Medicaid eligibility up to 138 percent of the federal poverty level; 12 new health insurance exchanges for small-employer and individual purchase of private coverage, with subsidies for individuals with incomes of 138–400 percent of the federal poverty level; and a requirement that most US citizens and legal residents have qualifying health coverage or pay a tax penalty, referred to as the minimum coverage requirement or “individual mandate.”

The penalty for not complying with the coverage requirement will eventually be the greater of $695 per year, up to a maximum of three times that amount ($2,085) per family, or 2.5 percent of household income. The law allows exemptions from the penalty for undocumented immigrants, those for whom the lowest available premium for single coverage exceeds 8 percent of family income, and those with incomes below the tax filing threshold, among other groups. 13

Under the Affordable Care Act, undocumented immigrants are prohibited from enrolling in Medicaid and the Children’s Health Insurance Program (CHIP) or purchasing coverage through the exchanges. States or localities may provide state-funded coverage for immigrants, documented or undocumented, without federal matching funds.

Lawfully residing immigrants with family incomes below 138 percent of the federal poverty level and more than five years of US residency will be eligible for Medicaid with low or no premium. 14 Lawfully residing immigrant adults in that income band who have five years or less of US residency will not be eligible for Medicaid but will be eligible for tax subsidies for insurance purchased through an exchange.

However, these immigrants will be required to pay at least 2 percent of their incomes for premiums. That requirement may constitute a financial barrier to becoming insured, compared with equivalently poor citizens or lawfully residing immigrants who have been in the country for more than five years, who will be eligible for Medicaid with low or no premium.

This analysis presents estimates of the effects of the Affordable Care Act on coverage for the nonelderly US population by race and ethnicity. We address three key issues.

First, to what extent will coverage expansions under the Affordable Care Act reduce racial and ethnic differentials in coverage? Second, how do patterns of coverage change under the Affordable Care Act across racial and ethnic groups? Third, do the reasons for being uninsured after implementation of the Affordable Care Act differ by race and ethnicity?

Our analysis shows that the Affordable Care Act has the potential to reduce racial and ethnic coverage differentials substantially. However, coverage gains will depend heavily on the intensity of efforts to enroll eligible people into Medicaid and CHIP and exchange coverage, and on penalty and subsidy levels and exemptions. Policy decisions at the national, state, and local levels in the years leading up to full implementation of the law will have an impact on coverage gains.

Study Data And Methods

Details Of The Model

Our analysis used a microsimulation model, the Urban Institute’s Health Insurance Policy Simulation Model, to derive estimates of insurance coverage for children and adults, by racial and ethnic group, under the Affordable Care Act. This model provides estimates of the effects of implementation of key provisions of the Affordable Care Act relative to current law.

The model relied on multiple data sources to reflect demographic characteristics, health insurance coverage and premiums, health spending, and employers at the state and national levels. The analytic sample for this analysis was the nonelderly resident civilian noninstitutionalized US population.

An important policy question that the analysis considered was the effect of the Affordable Care Act on undocumented immigrants. Because the core data set did not contain sufficient information to determine whether an individual was an authorized immigrant, we simulated documentation status for noncitizens based on an approach developed by Jeffrey Passell and Paul Taylor. 15

The model started with estimates of coverage under conditions in 2011 before the Affordable Care Act was implemented and then simulated the act’s main coverage provisions as if they had been fully implemented in 2011. Our approach differs from that of the Congressional Budget Office, which provided ten-year estimates.

The model simulated the responses of individuals and employers to policy changes. It implicitly captured differential price responsiveness across demographic characteristics such as race and ethnicity. The underlying survey data captured differences across racial and ethnic groups in baseline coverage decisions and in other factors that are key to behavioral responses under reform, such as health care spending and employment.

Medicaid and CHIP participation rates—defined as the ratio of eligible individuals enrolled in the programs to that number of individuals plus uninsured eligible individuals—were also calibrated by demographic characteristics and observed patterns, and thus varied across racial and ethnic groups. 16 Participation rates after reform were notably higher for all racial and ethnic groups compared to pre–Affordable Care Act baseline rates.

The application of the individual mandate to dependents has not been fully addressed in regulations. Because this could have a significant effect on our estimates, we examined the sensitivity of the results to two alternative interpretations. (See the online Technical Appendix for further details on the model, assumptions, and differences between the estimates presented here and previous studies.) 17

Racial And Ethnic Groups

Changes in coverage were examined for the following racial and ethnic groups: white non-Hispanic—referred to as white; black or African American non-Hispanic—referred to as black; Hispanic; and Asian, Native Hawaiian or other Pacific Islander, American Indian or Alaskan Native, or other race—referred to as Asian/other.

Hispanic ethnicity was identified using responses to the Current Population Survey question, “Are you Spanish, Hispanic, or Latino?” Respondents designating multiple races were included in the Asian/other group. The distribution of races within the Asian/other group category was as follows: Asian/Pacific Islander (67.4 percent), multiracial (23.2 percent), and American Indian/Aleutian/Eskimo (9.5 percent).

States For Analysis

To identify states for which our analyses were most relevant, we indicated the ten states with the largest nonelderly black populations and the ten states with the largest nonelderly Hispanic populations, using estimates from the 2009 American Community Survey.

Uninsured Groups

Those predicted to be uninsured after implementation of the Affordable Care Act were classified into five groups.

Group 1 contained those eligible for Medicaid or CHIP but not enrolled.

Group 2 contained undocumented immigrants.

Group 3 contained those exempt from the coverage requirement—for example, because of income below the tax filing threshold.

Group 4 contained those bound by the coverage requirement and eligible for subsidized coverage in the exchanges. This group includes individuals or families with incomes under 400 percent of the federal poverty level and no “affordable” offer of employer-based coverage, defined under the Affordable Care Act as those for whom the lowest premium for single employer-based coverage exceeds 9.5 percent of family income.

Group 5 contained those bound by the coverage requirement and not eligible for subsidized coverage in the exchanges.

Assessing The Act’s Impact

In this analysis, we examined the impact of the Affordable Care Act on coverage across racial and ethnic groups through estimates of uninsurance rates and coverage differentials by race and ethnicity before and after the act’s implementation. We examined percentage-point changes in uninsurance rates and reductions in uninsurance relative to baseline rates by race and ethnicity.

We calculated racial and ethnic differentials in the rates of uninsurance by subtracting the rate of uninsurance for one racial and ethnic group from that of another, resulting in percentage-point differences in rates of uninsurance between racial and ethnic group pairs. Whites were the reference group for these differentials.

We further explored the impact by examining the type of coverage projected under the Affordable Care Act by racial and ethnic group and baseline coverage type. Finally, we examined the reasons for being uninsured under the Affordable Care Act by racial and ethnic group, using the groups described above. This analysis included a discussion of undocumented immigrants, who are predicted to account for one-quarter of those who remain uninsured after full implementation of the Affordable Care Act. 18

Study Limitations

This analysis had a number of limitations. First, we relied on survey data that had known limitations, 19 which we attempted to adjust for in our analytic data set. To the extent that the data under- or overstated baseline coverage, our estimates of the impacts of the Affordable Care Act would be over- or understated.

Second, our results were sensitive to the assumptions made that impute undocumented immigration status to individuals, primarily Hispanics. Third, the coverage distributions and eligibility simulation for Medicaid and CHIP were both measured with error, because many people were classified as having these coverage types on the survey but had no identifiable eligibility pathway.

Fourth, we calibrated the responsiveness of families to changes in price so that in aggregate, model take-up behavior matched elasticity targets drawn from the empirical economics literature. 20–23 However, generally accepted elasticity estimates in the literature do not vary by race and ethnicity. Although the existence of such benchmarks might lead to slightly different results, the existing elasticities do vary by factors such as income and current health coverage that are correlated with race and ethnicity. Also, the model’s calibration process preserved differences in reported choices at baseline, such as take-up of public coverage. Thus, our model implicitly included differential enrollment rates under the Affordable Care Act across a broad range of demographic characteristics, including race and ethnicity.

Fifth, our results were also sensitive to the modeling of the coverage requirement. 16

Sixth, additional assumptions regarding specific aspects of the Affordable Care Act were made to simulate the law’s impact, as described above.

Seventh and last, the model also assumed uniform implementation of the Affordable Care Act in all states and, in particular, assumed that risk adjustment between coverage inside and outside of the exchanges was highly effective and that markets were well regulated in all states. To the extent that some states fall short, particularly in states that include a disproportionately large share of blacks and Hispanics, our estimates may overstate coverage gains for blacks and Hispanics.

Study Results

Baseline Uninsurance Rates

In our pre–Affordable Care Act baseline estimates that modeled coverage under current conditions, US black and Hispanic racial and ethnic groups had much higher rates of uninsurance (21.6 percent and 33.3 percent, respectively) compared to US whites (13.9 percent; Exhibit 1 ). After full implementation of the Affordable Care Act, blacks and Hispanics are projected to experience large reductions in uninsurance but nevertheless to remain more likely to be uninsured than whites.

Exhibit 1 US Population Younger Than Age 65 Who Were Uninsured Before The Affordable Care Act And Will Be Uninsured After The Act’s Implementation, By Race And Ethnicity

Insurance statusTotal White a Black aHispanic Asian/other a,b
Population below age 65 (millions)268.8166.434.1848.120.1
Uninsured before the ACAc
Number (millions)50.323.17.416.03.7
Percent uninsured18.7%13.9%21.6%33.3%18.5%
Differential with whites — d — d7.7%19.4%4.6%
Uninsured under the ACA
Number (millions)26.410.83.410.12.1
Percent uninsured9.8%6.5%9.8%21.1%10.4%
Differential with whites — d — d3.3%14.6%3.8%
Change in uninsurance
Number (millions)−23.8−12.3−4.0−5.9−1.6
Percentage-point change in uninsurance rate−8.9−7.4−11.8−12.2−8.2
Percent change in uninsurance rate−47.4%−53.1%−54.6%−36.6%−44.1%
Change in uninsurance rate differential with whites
Percentage-point change in rate — d — d−4.4−4.8−0.8
Percent change in rate — d — d−57.3%−24.7%−16.8%

SOURCE Urban Institute analysis, Health Insurance Policy Simulation Model, 2011.

aDoes not include those who indicate Hispanic ethnicity.

bThe “Asian/other” category is Asian/Pacific Islander (67.4 percent), multiracial (23.2 percent), and American Indian/Aleutian/Eskimo (9.5 percent).

cBaseline pre–Affordable Care Act (ACA) models coverage under current conditions. This simulation estimates coverage under the key coverage-related components of HR 3590, the Patient Protection and Affordable Care Act, and HR 4872, the Health Care and Education Reconciliation Act of 2010. Reforms were modeled as if they were fully implemented in 2011, and estimates are for that single year. This exhibit shows coverage for nonelderly people only, including some who are undocumented immigrants.

dNot applicable.

Absolute Reductions In Uninsurance

Blacks and Hispanics are projected to have the largest absolute reductions in uninsurance rates under the Affordable Care Act compared to other racial and ethnic groups. The drop is 11.8 percentage points for blacks, corresponding to 4.0 million fewer people uninsured, and 12.2 percentage points for Hispanics, corresponding to 5.9 million fewer people uninsured ( Exhibit 1 ). In comparison, the uninsurance rate among whites is expected to fall by 7.4 percentage points, corresponding to 12.3 million fewer people uninsured, which is large relative to the baseline uninsurance rate for whites but much smaller than the drops that are projected for blacks and Hispanics.

Proportional Changes In Uninsurance

The pre–Affordable Care Act baseline uninsurance rates varied greatly by race and ethnicity. Thus, the largest percentage-point drops in uninsurance do not correspond to the largest relative reductions in uninsurance levels. For example, Hispanics are projected to have the largest percentage-point decrease in their uninsurance rate, but they also had the highest rate of uninsurance at the baseline. As a result, the relative reduction in uninsurance for Hispanics—36.6 percent—is projected to be smaller than for whites and blacks—53.1 percent and 54.6 percent, respectively. This result was driven in part by the differential treatment of immigrants, undocumented and legal, under the Affordable Care Act, which disproportionately affects coverage gains for Hispanics, as discussed below.

The black-white differential in uninsurance rates is predicted to shrink by 57.3 percent, from 7.7 percentage points to 3.3 percentage points. The Hispanic-white differential is projected to be more persistent, falling by 24.7 percent, from 19.4 percentage points to 14.6 percentage points.

These patterns, including the high uninsurance rate of 21.1 percent projected among Hispanics under the Affordable Care Act, can be explained by several factors, which we examine in turn below.

Sources Of Coverage

The Affordable Care Act is projected to increase rates of health insurance coverage across all racial and ethnic groups as a result of increased access to free or subsidized health insurance through Medicaid and CHIP and the new subsidies available for coverage in the exchanges ( Exhibit 2 ). Hispanics—the group with the lowest rate of coverage in the pre-baseline period—had the largest projected percentage increase in coverage rates under the Affordable Care Act (18.2 percent), compared to blacks (15.1 percent) and whites (8.6 percent).

Exhibit 2 Insurance Coverage Before The Affordable Care Act And Under The Affordable Care Act, And Changes In Coverage, By Race And Ethnicity

Source of coveragePopulation below age 65 White a Black aHispanic Asian/other a,b
Baseline pre-ACAc
Insured81.3%86.1%78.4%66.7%81.5%
 Medicaid and CHIP d16.811.328.027.317.7
 Medicare and other public coverage e3.23.54.21.62.8
 Employer-sponsored insurance56.064.743.435.055.1
 Nongroup insurance5.46.62.72.85.8
Uninsured18.713.921.633.318.5
Coverage under the ACA
Insured90.2%93.5%90.2%78.9%89.6%
 Medicaid and CHIP d22.916.936.533.723.3
 Medicare and other public coverage e3.23.54.21.62.8
 Employer-sponsored insurance57.565.645.438.157.0
  Employer plan in exchange3.74.22.23.03.3
  Employer plan not in exchange53.861.443.235.153.8
 Nongroup insurance6.67.54.15.66.5
  Nongroup plan in exchange5.76.53.64.65.3
  Nongroup plan not in exchange0.91.00.51.01.2
Uninsured9.86.59.821.110.4
Percentage-point change in coverage under the ACA
Insured8.97.411.812.28.2
 Medicaid and CHIP d6.15.78.46.35.6
 Employer-sponsored insurance1.50.92.03.11.9
 Nongroup insurance1.20.81.42.80.7
Uninsured−8.9−7.4−11.8−12.2−8.2
Insurance rate
Increase in rate10.9%8.6%15.1%18.2%10.0%

SOURCE Urban Institute analysis, Health Insurance Policy Simulation Model, 2011.

aDoes not include those who indicate Hispanic ethnicity.

bThe “Asian/other” category is Asian/Pacific Islander (67.4 percent), multiracial (23.2 percent), and American Indian/Aleutian/Eskimo (9.5 percent).

c Baseline pre–Affordable Care Act (ACA) models coverage under current conditions. For details about the simulation, see Exhibit 1 notes.

dThose with dual Medicaid/Medicare coverage are included in the “Medicaid and CHIP” (Children’s Health Insurance Program) insurance type.

eThose with Medicare and other public insurance at pre-ACA baseline are assumed to remain in this coverage after the ACA.

The largest coverage gains under the Affordable Care Act can be attributed to Medicaid and CHIP coverage. Disproportionately large gains in coverage through these programs are projected among blacks: The share of blacks covered by the two programs is projected to increase by 8.4 percentage points to 36.5 percent, compared to increases of 5.7 percentage points among whites and 6.3 percentage points among Hispanics.

Under the Affordable Care Act, the most prevalent insurance type across all racial and ethnic groups continues to be employer-sponsored coverage. Whites’ high rates of employer-based coverage are projected to increase only by 0.9 percentage point to 65.6 percent under the Affordable Care Act.

The gains in the rate of employer-based coverage among blacks and Hispanics are projected to be somewhat higher—2.0 and 3.1 percentage points, respectively—mainly because of increased access to employer plans offered through the exchanges. However, the rates of employer-based coverage among Hispanics and blacks, at 45.4 and 38.1 percent respectively, are still projected to be well below rates for whites.

Additional small gains in the rate of nongroup coverage are projected across the board but are largest for Hispanics, 2.8 percentage points, largely as a result of enrollment in the nongroup exchanges.

Of the estimated 26.4 million individuals projected to be uninsured after the implementation of the Affordable Care Act, those eligible for Medicaid and CHIP, but who remain unenrolled, constitute the single largest group, at 35.7 percent ( Exhibit 3 ). This eligible-but-unenrolled group includes 58.8 percent of the blacks who we estimate will remain uninsured under the Affordable Care Act, which is a higher proportion than found in the other racial and ethnic groups examined.

Exhibit 3 Uninsured US Population Younger Than Age 65 Under The Affordable Care Act, By Eligibility Criteria And Race And Ethnicity

All nonelderly
White a
 Black a
 Hispanic
Asian/other b
ACA c eligibility criteria MillionsPercentMillionsPercentMillionsPercentMillionsPercentMillionsPercent
Eligible for public coverage9.435.74.238.42.058.82.625.30.735.0
Not eligible for public coverage
 Undocumented immigrant6.825.70.43.30.37.45.655.00.629.0
 Not undocumented immigrant
  Exempt from coverage requirement2.28.51.412.80.26.00.44.40.29.6
  Not exempt, subsidy eligible4.215.82.522.60.516.10.99.00.313.6
  Not exempt, not subsidy eligible3.814.42.522.90.411.70.76.40.312.9
Total uninsured under the ACA26.4100.010.8100.03.4100.010.1100.02.1100.0

SOURCE Urban Institute analysis, Health Insurance Policy Simulation Model, 2011.

aDoes not include those who indicate Hispanic ethnicity.

bThe “Asian/other” category is Asian/Pacific Islander (67.4 percent), multiracial (23.2 percent), and American Indian/Aleutian/Eskimo (9.5 percent).

c Baseline pre–Affordable Care Act (ACA) models coverage under current conditions. For details about the simulation, see Exhibit 1 notes. People reporting “multiple races” are categorized as “other” race.

Undocumented immigrants are projected to constitute the second-largest group among the uninsured. They account for 25.7 percent of the total uninsured. Hispanics constitute the vast majority—82.2 percent—of undocumented immigrants projected to remain uninsured under the Affordable Care Act. 24 In fact, 55.0 percent of Hispanics who remain uninsured under the Affordable Care Act are projected to be undocumented immigrants—a far higher share than among the other racial and ethnic groups.

Exemptions From The Coverage Requirement

Among all who are projected to remain uninsured under the Affordable Care Act, 15.8 percent—including a disproportionately large share of whites, 22.6 percent—would not be exempt from the coverage requirement and would be obligated to pay penalties for being uninsured, despite being eligible for subsidized coverage in the exchanges ( Exhibit 3 ).

Another 14.4 percent of the uninsured—again, a disproportionately large share of whites, 22.9 percent—would be bound by the coverage requirement and would be subject to penalties but not eligible for subsidized coverage in the exchanges, largely because their incomes exceed 400 percent of the federal poverty level.

Only 8.5 percent of the uninsured would be ineligible for public coverage and exempted from the coverage requirement and penalty payments.

Roles Of The States

These estimates were predicated on enrollment in Medicaid and CHIP, subsidized exchange coverage, and other forms of coverage under the Affordable Care Act as modeled in the simulation. However, within broad federal guidelines in the reform law, states will have considerable latitude in how coverage-related programs are structured and implemented, which will lead to variation in enrollment in different forms of coverage. Given that blacks and especially Hispanics are concentrated more heavily in some states than in others, the coverage effects of the Affordable Care Act may differ from those presented here.

To shed more light on the dynamics that will be in play as the coverage expansion is implemented, Exhibit 4 shows the ten states with the largest nonelderly black populations, which together accounted for 58.8 percent (19.3 million) of the total nonelderly black US population.

Exhibit 4 Ten States With The Largest Black Populations And Hispanic Populations Younger Than Age 65 In 2009

Black population
Hispanic population
StateMillionsPercent below age 65Cumulative total percent below age 65StateMillionsPercent below age 65Cumulative total percent below age 65
GA2.68.08.0CA12.828.428.4
NY2.57.615.6TX8.518.947.3
TX2.57.623.1FL3.57.855.2
FL2.57.530.6NY3.06.761.8
CA1.95.736.3AZ1.94.266.1
NC1.75.241.6IL1.94.270.2
IL1.65.046.5NJ1.33.073.2
MD1.54.451.0CO0.92.175.3
VA1.34.054.9NM0.81.877.1
LA1.33.958.8GA0.81.778.9
Total19.358.858.8Total35.578.978.9

SOURCE 2009 American Community Survey (ACS). NOTES “Black” does not include people who indicate Hispanic ethnicity. Population is restricted to noninstitutionalized civilians younger than age 65. Race/ethnicity is based on self-identified ACS response.

The Hispanic population is even more heavily geographically concentrated than the black population. Nearly half of the nonelderly Hispanic population live in two states, California with 28.4 percent, 12.8 million, and Texas with 18.9 percent, 8.5 million ( Exhibit 4 ). Combined, the next eight states with the largest nonelderly Hispanic populations account for another 31.5 percent (14.2 million) of nonelderly US Hispanics. Altogether, these ten states account for almost 80 percent of the nation’s Hispanic population.

Discussion

National Policy Implications

Estimates from our microsimulation model suggest that the Affordable Care Act will greatly expand health insurance coverage for all racial and ethnic groups, largely because of increased access to free or subsidized health insurance through Medicaid and CHIP and the new exchanges. The largest reductions in uninsurance rates are predicted among blacks and Hispanics. Thus, the Affordable Care Act is poised to greatly reduce the country’s persistent racial and ethnic differentials in coverage.

The results of this analysis focused on the reduction in racial and ethnic coverage differentials specifically related to the coverage provisions of the Affordable Care Act. Many additional policy initiatives are under way that could contribute to reductions in racial and ethnic disparities.

Additional provisions of the Affordable Care Act, such as expanded data collection and reporting and major investment in preventive and primary health care services provided to vulnerable populations through community health center programs, could directly or indirectly affect racial and ethnic differences in access to care and health outcomes. In addition, a major new federal initiative aims to build on provisions of the new law and coordinate with complementary public and private initiatives, as outlined in the Department of Health and Human Services’ first Action Plan to Reduce Racial and Ethnic Health Disparities. 25,26

Hispanics have the potential for the largest gains in coverage rates relative to baseline. The Affordable Care Act is projected to disproportionately increase blacks’ enrollment in Medicaid and CHIP. In addition, the availability of employer plans in the exchanges is expected to support increased employer coverage for blacks and Hispanics, but overall rates of employer coverage are still expected to be far lower for those two groups compared to whites.

Small increases in nongroup coverage are projected to occur primarily through enrollment in nongroup exchange coverage, particularly among Hispanics. Overall, of the 26.4 million people projected to remain uninsured after implementation of the Affordable Care Act, 12.7 percent are black and a disproportionate share, 38.4 percent, are Hispanic.

Our findings suggest that gains in coverage among blacks would be particularly enhanced by effective Medicaid and CHIP outreach and enrollment efforts. Blacks are more likely than whites to rely on these programs under the Affordable Care Act because of their lower incomes and a lower prevalence of employer-sponsored insurance. And although a relatively large share of blacks is predicted to gain coverage through enrollment in Medicaid and CHIP, most blacks who are projected to remain uninsured under the Affordable Care Act would be eligible for these programs but not enrolled.

State Policy Implications

Our analysis suggests that Affordable Care Act implementation and related policy choices in both California and Texas will be critical for determining coverage effects for the Hispanic population, because nearly half of nonelderly US Hispanics reside in those two states. Relative to other states, those states currently have lower-than-average participation rates among children who are eligible for Medicaid and CHIP. 16

Thus, strategies to boost rates of Medicaid and CHIP enrollment in those two states will be essential to reducing uninsurance among Hispanics under the Affordable Care Act. Doing so will probably require strategies such as targeted outreach efforts to people with limited English proficiency and addressing language and related barriers to enrollment and retention.

Effective outreach to those who are eligible for coverage but who remain uninsured are likely to be key to improving health outcomes for blacks and Hispanics. Evidence from countries with universal health care such as Canada 27 and the United Kingdom 28 suggest that narrowing coverage differentials could decrease health differentials and improve access throughout the system.

Undocumented Immigrants

We estimated that more than five million people remaining uninsured will be undocumented immigrants, and 82.2 percent of this group are Hispanic. None of the coverage provisions of the Affordable Care Act addresses undocumented immigrants. States will continue receiving federal Medicaid reimbursement only for emergency care for undocumented immigrants if the patient would otherwise meet the state’s eligibility criteria for Medicaid. 29 States can also continue using CHIP funds to cover pregnant women, regardless of immigration status. 30

Under the Affordable Care Act, access to care for uninsured undocumented immigrants will depend heavily on funding levels for safety-net providers in communities 31 and on the willingness of private physicians and hospitals to provide care that goes beyond the requirement under federal law to screen and stabilize all people with emergency medical conditions. 32

The most important impact of the Affordable Care Act on undocumented immigrants may be to provide coverage for other family members who are documented. Indeed, millions of families have mixed immigration status, including many families with citizen children. 33 However, encouraging take-up of Medicaid and CHIP or of exchange subsidies among eligible people in families with mixed immigration status may require targeted outreach efforts to address fears that the immigration status of a family member could be adversely affected by program participation. 34

Conclusion

The Affordable Care Act appears poised to shrink the country’s long-standing racial and ethnic differentials in health insurance coverage. It will potentially cut the black-white coverage differential in uninsurance rates by more than half and the Hispanic-white coverage differential by just under a quarter.

Achieving those gains will depend largely on the extent to which state policies are effective in attaining high rates of enrollment in Medicaid and CHIP and the new insurance exchanges for people of different racial and ethnic groups, particularly in states that contain a large share of the nation’s Hispanic and black populations.

The forthcoming US Supreme Court ruling on the constitutionality of the federal health reform law will have profound implications. If the Court upholds the constitutionality of the Affordable Care Act, and the law reduces uninsurance to the extent projected in this analysis, substantial reduction in long-standing racial and ethnic differentials in access to health care and health status are likely to follow.

ACKNOWLEDGMENTS

This research was funded in part by the Annie E. Casey Foundation. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the Annie E. Casey Foundation or the Urban Institute and its sponsors or trustees. The paper has benefited from the helpful comments of Margaret Simms, Tim Waidmann, and three anonymous referees. The authors thank Christine Coyer, Michael Huntress, and Dean Resnick of the Urban Institute Health Policy Center for their assistance.

ABOUT THE AUTHORS: LISA CLEMANS-COPE, GENEVIEVE M. KENNEY, MATTHEW BUETTGENS, CAITLIN CARROLL & FREDRIC BLAVIN

In this month’s Health Affairs , Lisa Clemans-Cope and coauthors, all from the Urban Institute’s Health Policy Center, report on their use of a microsimulation model to project the impact of the Affordable Care Act in reducing racial and ethnic differentials in health insurance coverage. Although coverage is likely to remain higher in whites, the authors project substantial reduction in differentials in coverage rates between blacks and whites and between Hispanics and whites. State outreach and enrollment efforts will play a major role in determining outcomes, and enrollment of Hispanics will depend heavily on reaching people with limited English proficiency in California and Texas, where almost half of all Hispanics in the United States live.

Clemans-Cope is a senior research associate and health economist. Her areas of expertise include access to health care, health spending, Medicaid and the Children’s Health Insurance Program (CHIP), Medicaid and Medicare dual eligibles, and health reform initiatives and legislation. Her current research includes analyses of local geographic variation in Medicaid health spending, health care access, and health care use. She holds a doctorate in health economics from the Johns Hopkins University.

Genevieve Kenney is a senior fellow. Her areas of expertise include Medicaid and CHIP. She has published many articles examining insurance coverage and access to care for low-income children, pregnant women, and other adults. Kenney has two master’s degrees, one in economics and the other in statistics, and a doctorate in economics, all from the University of Michigan.

Matthew Buettgens, a senior research associate, led the development of the institute’s Heath Insurance Policy Simulation Model. The model is used to provide technical assistance for health reform implementation in Massachusetts, Missouri, New York, Virginia, and Washington, as well as in the federal government. Buettgens’s research focus includes the costs and savings of health reform for federal and state governments, the effect of reform on employers, and state-by-state analysis of changes in health insurance coverage. He holds a doctorate in mathematics from the University at Buffalo, State University of New York.

Caitlin Carroll is a research assistant. Her research concerns domestic health care and insurance. She works with the Health Insurance Policy Simulation Model to analyze the effects of current and proposed legislation on the state of US health care. Her current research includes the Medicaid expansion, exchange costs, and the uninsured population. Carroll received a bachelor’s degree from Tufts University.

Fredric Blavin is a research associate, working with the Health Insurance Policy Simulation Model to estimate the cost and coverage implications of various state and national health insurance reform policies. He earned his doctorate in health economics from the University of Pennsylvania.

NOTES

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