You are on page 1of 12

At the Intersection of Health, Health Care and Policy

Cite this article as:


Lisa Clemans-Cope, Genevieve M. Kenney, Matthew Buettgens, Caitlin Carroll and
Fredric Blavin
The Affordable Care Act's Coverage Expansions Will Reduce Differences In
Uninsurance Rates By Race And Ethnicity
Health Affairs, 31, no.5 (2012):920-930
doi: 10.1377/hlthaff.2011.1086

The online version of this article, along with updated information and services, is
available at:
http://content.healthaffairs.org/content/31/5/920.full.html

For Reprints, Links & Permissions:


http://healthaffairs.org/1340_reprints.php
E-mail Alerts : http://content.healthaffairs.org/subscriptions/etoc.dtl
To Subscribe: http://content.healthaffairs.org/subscriptions/online.shtml

Health Affairs is published monthly by Project HOPE at 7500 Old Georgetown Road, Suite 600,
Bethesda, MD 20814-6133. Copyright 2012 by Project HOPE - The People-to-People Health
Foundation. As provided by United States copyright law (Title 17, U.S. Code), no part of Health
Affairs may be reproduced, displayed, or transmitted in any form or by any means, electronic or
mechanical, including photocopying or by information storage or retrieval systems, without prior
written permission from the Publisher. All rights reserved.

Not for commercial use or unauthorized distribution


Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012
at Connecticut College

Coverage Expansion
By Lisa Clemans-Cope, Genevieve M. Kenney, Matthew Buettgens, Caitlin Carroll, and Fredric Blavin
10.1377/hlthaff.2011.1086
HEALTH AFFAIRS 31,
NO. 5 (2012): 920930
2012 Project HOPE
The People-to-People Health
Foundation, Inc.

doi:

Lisa Clemans-Cope
(lclemans@urban.org) is a
senior research associate and
health economist at the Urban
Institutes Health Policy
Center, in Washington, D.C.
Genevieve M. Kenney is a
senior fellow at the Urban
Institutes Health Policy
Center.
Matthew Buettgens is a
senior research associate at
the Urban Institutes Health
Policy Center.
Caitlin Carroll is a research
assistant at the Urban
Institutes Health Policy
Center.
Fredric Blavin is a research
associate at the Urban
Institutes Health Policy
Center.

The Affordable Care Acts


Coverage Expansions Will Reduce
Differences In Uninsurance Rates
By Race And Ethnicity
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 Childrens 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.

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 laws 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
920

H e a lt h A f fai r s

M AY 2 0 1 2

31 : 5

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,

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

the law is expected to expand coverage substantially, but an estimated 2326 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 studys 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 138400 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 Childrens 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 Institutes
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
M AY 2 0 1 2

31:5

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

H e a lt h A f fai r s

921

Coverage Expansion
Care Act was implemented and then simulated
the acts 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 ratesdefined as the ratio of eligible individuals enrolled
in the programs to that number of individuals
plus uninsured eligible individualswere 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 preAffordable 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-Hispanicreferred to
as white; black or African American nonHispanicreferred to as black; Hispanic; and
Asian, Native Hawaiian or other Pacific Islander,
American Indian or Alaskan Native, or other
racereferred 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 un922

H e a lt h A f fai r s

M AY 2 0 1 2

31 : 5

Blacks and Hispanics


are projected to have
the largest absolute
reductions in
uninsurance under the
Affordable Care Act.

insured 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 requirementfor 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 Acts 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 acts 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 percentagepoint 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 Af-

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

fordable 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 onequarter 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.2023 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 models
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 laws 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.

Exhibit 1
US Population Younger Than Age 65 Who Were Uninsured Before The Affordable Care Act And Will Be Uninsured After The
Acts Implementation, By Race And Ethnicity
Insurance status
Population below age 65 (millions)
Uninsured before the ACAc

Total
268.8

Whitea
166.4

Blacka
34.18

Hispanic
48.1

Asian/
other a,b
20.1

Number (millions)
Percent uninsured
Differential with whites
Uninsured under the ACA

50.3
18.7%
d

23.1
13.9%
d

7.4
21.6%
7.7%

16.0
33.3%
19.4%

3.7
18.5%
4.6%

Number (millions)
Percent uninsured
Differential with whites

26.4
9.8%
d

10.8
6.5%
d

3.4
9.8%
3.3%

10.1
21.1%
14.6%

2.1
10.4%
3.8%

23.8
8.9
47.4%

12.3
7.4
53.1%

4.0
11.8
54.6%

5.9
12.2
36.6%

1.6
8.2
44.1%

4.4
57.3%

4.8
24.7%

0.8
16.8%

Change in uninsurance
Number (millions)
Percentage-point change in uninsurance rate
Percent change in uninsurance rate

Change in uninsurance rate differential with whites


Percentage-point change in rate
d
Percent change in rate
d

d
d

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 preAffordable 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.

M AY 2 0 1 2

31:5

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

H e a lt h A f fai r s

923

Coverage Expansion
Study Results
Baseline Uninsurance Rates In our preAffordable 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.
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
preAffordable 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 Hispanics36.6
percentis projected to be smaller than for
whites and blacks53.1 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
924

Health Affai rs

M AY 20 1 2

31 : 5

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). Hispanicsthe
group with the lowest rate of coverage in the prebaseline periodhad 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).
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 higher2.0 and 3.1 percentage
points, respectivelymainly 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.
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
majority82.2 percentof undocumented im-

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

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 coverage
Baseline pre-ACAc
Insured
Medicaid and CHIPd
Medicare and other public coveragee
Employer-sponsored insurance
Nongroup insurance
Uninsured

Population
below
age 65

Whitea

81.3%
16.8
3.2
56.0
5.4
18.7

86.1%
11.3
3.5
64.7
6.6
13.9
93.5%
16.9
3.5
65.6
4.2
61.4
7.5
6.5
1.0
6.5

Coverage under the ACA


Insured
90.2%
22.9
Medicaid and CHIPd
3.2
Medicare and other public coveragee
Employer-sponsored insurance
57.5
Employer plan in exchange
3.7
Employer plan not in exchange
53.8
Nongroup insurance
6.6
Nongroup plan in exchange
5.7
Nongroup plan not in exchange
0.9
Uninsured
9.8
Percentage-point change in coverage under the ACA
Insured
Medicaid and CHIPd
Employer-sponsored insurance
Nongroup insurance
Uninsured
Insurance rate

8.9
6.1
1.5
1.2
8.9

7.4
5.7
0.9
0.8
7.4

Increase in rate

10.9%

8.6%

Hispanic

Asian/
othera,b

78.4%
28.0
4.2
43.4
2.7
21.6

66.7%
27.3
1.6
35.0
2.8
33.3

81.5%
17.7
2.8
55.1
5.8
18.5

90.2%
36.5
4.2
45.4
2.2
43.2
4.1
3.6
0.5
9.8

78.9%
33.7
1.6
38.1
3.0
35.1
5.6
4.6
1.0
21.1

89.6%
23.3
2.8
57.0
3.3
53.8
6.5
5.3
1.2
10.4

Blacka

11.8
8.4
2.0
1.4
11.8

12.2
6.3
3.1
2.8
12.2

15.1%

8.2
5.6
1.9
0.7
8.2

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). cBaseline preAffordable 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
(Childrens 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.

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

ACAc eligibility criteria


Eligible for public coverage
Not eligible for public coverage
Undocumented immigrant
Not undocumented immigrant
Exempt from coverage
requirement
Not exempt, subsidy eligible
Not exempt, not subsidy eligible
Total uninsured under the ACA

All nonelderly

Whitea

Millions

Millions

Percent

Blacka
Percent

Millions

Asian/otherb

Hispanic
Percent

Millions

Percent

Millions

Percent

9.4

35.7

4.2

38.4

2.0

58.8

2.6

25.3

0.7

35.0

6.8

25.7

0.4

3.3

0.3

7.4

5.6

55.0

0.6

29.0

2.2

8.5

1.4

12.8

0.2

6.0

0.4

4.4

0.2

9.6

4.2
3.8
26.4

15.8
14.4
100.0

2.5
2.5
10.8

22.6
22.9
100.0

0.5
0.4
3.4

16.1
11.7
100.0

0.9
0.7
10.1

9.0
6.4
100.0

0.3
0.3
2.1

13.6
12.9
100.0

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). cBaseline preAffordable 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.

M AY 2 0 1 2

31:5

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

H e a lt h A f fai r s

925

Coverage Expansion
migrants 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 immigrantsa 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 percentincluding a disproportionately
large share of whites, 22.6 percentwould 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 uninsuredagain,
a disproportionately large share of whites,
22.9 percentwould 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 coveragerelated 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.
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 nations 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 coun-

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

Hispanic population
Percent
below
age 65

Cumulative
total percent
below age 65

State

Millions

State

Millions

Percent
below
age 65

Cumulative
total percent
below age 65

GA
NY

2.6
2.5

8.0
7.6

8.0
15.6

CA
TX

12.8
8.5

28.4
18.9

28.4
47.3

TX
FL

2.5
2.5

7.6
7.5

23.1
30.6

FL
NY

3.5
3.0

7.8
6.7

55.2
61.8

CA
NC

1.9
1.7

5.7
5.2

36.3
41.6

AZ
IL

1.9
1.9

4.2
4.2

66.1
70.2

IL
MD
VA

1.6
1.5
1.3

5.0
4.4
4.0

46.5
51.0
54.9

NJ
CO
NM

1.3
0.9
0.8

3.0
2.1
1.8

73.2
75.3
77.1

LA
Total

1.3
19.3

3.9
58.8

58.8
58.8

GA
Total

0.8
35.5

1.7
78.9

78.9
78.9

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.

926

Health A ffairs

MAY 2 012

3 1:5

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

If the Court upholds


the Affordable Care
Act, reductions in
long-standing racial
and ethnic
differentials in access
and health status are
likely to follow.

trys 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 per-

cent 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 Canada27 and the
United Kingdom28 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 states 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 communities31 and on the willingness of private physicians and hospitals to proM AY 20 1 2

31 : 5

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

Health Affa irs

927

Coverage Expansion
vide 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 countrys long-standing racial and ethnic difThis 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

ferentials 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
nations 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.

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.

NOTES
1 Congressional Budget Office. Selected CBO publications related to
health care legislation, 20092010
[Internet]. Washington (DC): CBO;
2010 Dec 22 [cited 2012 Feb 6].
Available from: http://www.cbo
.gov/publication/21993
2 Buettgens M, Garrett B, Holahan J.
America under the Affordable Care
Act. Washington (DC): Urban Institute; 2010.
3 Buettgens M, Holahan J, Carroll C.
Health reform across the states: increased insurance coverage and
federal spending on the exchanges
and Medicaid [Internet]. Washington (DC): Urban Institute; 2011 Mar
[cited 2012 Apr 3]. (Timely Analysis
of Immediate Policy Issues). Available from: http://www.urban.org/
uploadedpdf/412310-HealthReform-Across-the-States.pdf
4 Lillie-Blanton M, Hoffman C. The
role of health insurance coverage in
reducing racial/ethnic disparities in
health care. Health Aff (Millwood).
2005;24(2):398408.
5 Smedley BD, Stith AY, Nelson A,
editors. Unequal treatment: confronting racial and ethnic disparities
in health care. Washington (DC):
National Academies Press; 2003.
6 DeNavas-Walt C, Proctor BD, Smith
JC. Income, poverty, and health insurance coverage in the United
States: 2010. Washington (DC):
Census Bureau; 2011.

928

H e a lt h A f fai r s

M AY 2 0 1 2

31 : 5

7 Institute of Medicine. Coverage


matters: insurance and health care.
Washington (DC): National Academies Press; 2001.
8 Hadley J. Sicker and poorer: the
consequences of being uninsured.
Med Care Res Rev. 2003;
60(2 suppl):3S75S.
9 Flores G, Abreu M, Tomany-Korman
SC. Why are Latinos the most uninsured racial/ethnic group of US
children? Pediatrics. 2006;118(3):
e73040. Erratum in: Pediatrics.
2006;118(5):2270.
10 Buettgens M, Carroll C. Eliminating
the individual mandate: effects on
premiums, coverage, and uncompensated care. Washington (DC):
Urban Institute; 2012.
11 Zhu J, Brawarsky P, Lipsitz S,
Huskamp H, Haas JS. Massachusetts
health reform and disparities in
coverage, access, and health status. J
Gen Intern Med. 2010;25(12):
135662.
12 In effect, eligibility was expanded to
138 of the federal poverty level because there is a 5 percent income
disregard in determining eligibility.
13 Kaiser Commission on Medicaid and
the Uninsured. Medicaid: a primer
[Internet]. Washington (DC): Kaiser
Family Foundation; 2009 [cited
2012 Apr 3]. Available from: http://
www.kff.org/medicaid/upload/
7334-03.pdf
14 As under current law, lawfully re-

15

16

17

18

19

20

21

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

siding immigrant children who have


five years or less of residency in the
United States may be eligible for
Medicaid coverage at state option.
Passel J, Taylor P. Unauthorized
immigrants and their U.S.-born
children. Washington (DC): Pew
Hispanic Center; 2010.
Kenney G, Buettgens M, Guyer J,
Heberlein M. Improving coverage
for children under health reform will
require maintaining current eligibility standards for Medicaid and
CHIP. Health Aff (Millwood).
2011;30(12):237181.
To access the Appendix, click on the
Appendix link in the box to the right
of the article online.
Buettgens M, Garrett B, Holahan J.
Americans under the Affordable Care
Act. Washington (DC): Robert Wood
Johnson Foundation, Urban Institute; 2010.
Kenney G, Holahan J, Nichols L.
Toward a more reliable federal survey for tracking health insurance
coverage and access. Health Serv
Res. 2006;41(3 Pt 1):91845.
Blumberg L, Nichols LM, Banthin JS.
Worker decisions to purchase health
insurance. Int J Health Care Finance
Econ. 2001;1;(34):30525.
Nichols L, Blumberg L, Cooper P,
Vistnes J. Employer decisions to offer health insurance: evidence from
the MEPS-IC data. Paper presented
at: American Economic Association

meetings, New Orleans, LA, 2001.


22 Gruber J, Lettau M. How elastic is
the firms demand for health insurance? J Public Econ. 2004;88:
127393.
23 Congressional Budget Office. Table 5: Elasticity results. In: The price
sensitivity of demand for nongroup
health insurance [Internet]. Washington (DC): CBO, 2005 Aug [cited
2012 Apr 3]. (Background Paper).
Available from: http://www.cbo
.gov/sites/default/files/cbofiles/
ftpdocs/66xx/doc6620/08-24healthinsurance.pdf
24 The estimated racial and ethnic distribution among the undocumented
immigrants who are projected to
remain uninsured under the Affordable Care Act is as follows: Hispanic (82.2 percent), Asian/other
(8.9 percent), white (5.3 percent),
and black (3.6 percent).
25 Department of Health and Human
Services. HHS action plan to reduce
racial and ethnic health disparities
[Internet]. Washington (DC): HHS;
2011 [cited 2012 Feb 6]. Available
from: http://minorityhealth.hhs
.gov/npa/files/Plans/HHS/

HHS_Plan_complete.pdf
26 Koh HK, Graham G, Glied SA.
Reducing racial and ethnic disparities: the action plan from the Department of Health and Human
Services. Health Aff (Millwood).
2011;30(10):182229.
27 Zheng W, Schimmele CM. Racial/
ethnic variation in functional and
self-reported health. Am J Public
Health. 2005;95(4):7106.
28 Nazroo JY, Falaschetti E, Pierce M,
Primatesta P. Ethnic inequalities in
access to and outcomes of healthcare: analysis of the Health Survey
for England. Epidemiol Community
Health. 2009;63:102227.
29 National Immigration Law Center.
How are immigrants included in
health care reform? [Internet].
Washington (DC): NILC; 2010 Apr
[cited 2012 Mar 21]. Available from:
http://nilc.org/immigrantshcr.html
30 Centers for Medicare and Medicaid
Services. State Childrens Health Insurance Program; eligibility for prenatal care and other health services
for unborn children. Fed Regist.
2002 Oct 2;67(191):61956.
31 Although the Affordable Care Act

provided additional funding for


safety-net providers, subsequent
budget cuts have limited those
funds. Also, the reduction in disproportionate-share hospital adjustment payments slated under the Affordable Care Act could cause some
providers to cut back on the uncompensated care they now provide
to the uninsured.
32 This treatment, regardless of immigration status, is legally required of
hospitals that accept Medicare
reimbursement, under the Emergency Medical Treatment and Active
Labor Act, 42 US Code, sec. 1395dd.
33 Urban Institute. Unauthorized immigrants [Internet]. Washington
(DC): Urban Institute; 2008 [cited
2012 Feb 6]. (Urban Institute Policy
Nutshells, No. 5). Available from:
http://www.urban.org/decision
points08/archive/05immigrants
.cfm
34 McMorrow S, Kenney G, Coyer C.
Addressing coverage challenges for
children under the Affordable Care
Act. Washington (DC): Urban Institute; 2011.

ABOUT THE AUTHORS: LISA CLEMANS-COPE, GENEVIEVE M. KENNEY,


MATTHEW BUETTGENS, CAITLIN CARROLL & FREDRIC BLAVIN

Lisa Clemans-Cope
is a senior research
associate and
health economist at
the Urban Institute.

In this months Health Affairs, Lisa


Clemans-Cope and coauthors, all
from the Urban Institutes 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
Childrens 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 M.
Kenney is a senior
fellow at the Urban
Institute.

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
masters degrees, one in economics
and the other in statistics, and a
doctorate in economics, all from
the University of Michigan.

MAY 2 012

3 1:5

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

Health Affairs

929

Coverage Expansion
analysis of changes in health
insurance coverage. He holds a
doctorate in mathematics from the
University at Buffalo, State
University of New York.

Medicaid expansion, exchange


costs, and the uninsured
population. Carroll received a
bachelors degree from Tufts
University.

Matthew Buettgens
is a senior research
associate at the
Urban Institute.

Matthew Buettgens, a senior


research associate, led the
development of the institutes
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.
Buettgenss 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

930

H e a lt h A f fai r s

M AY 2 0 1 2

Caitlin Carroll is a
research assistant
at the Urban
Institute.

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

31 : 5

Fredric Blavin is a
research associate
at the Urban
Institute.

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.

Downloaded from content.healthaffairs.org by Health Affairs on October 4, 2012


at Connecticut College

You might also like