TERRE HAUTE — Hoosiers are more likely to lack health insurance than Americans in general, according to a pair of reports issued last week by the U.S. Census Bureau.
In 2012, 16.4 percent of Indiana residents were without health insurance, compared with 15.4 percent for the U.S. as a whole, according to the latest data.
That higher percentage may be attributed to, in part, the higher unemployment rate in Indiana. The U.S. rate in July was 7.4 percent, compared with 8.4 percent for Hoosiers.
Private insurance coverage is tied to unemployment because many Americans — about 58 percent — have health insurance through their jobs.
“The big question is jobs,” said Curtis Skinner, director of family economic security for the National Center for Children in Poverty, an anti-poverty research center in New York. Job creation “really is the biggest and best anti-poverty policy.”
Jack Tatom, consultant for the Networks Financial Institute in the Scott College of Business at Indiana State University, agrees that there is a close link between private insurance coverage and employment.
Overall, the most recent Census figures show only a small increase in the number of Americans with health insurance. In 2012, 48.6 million Americans had health insurance, compared with 48 million in 2011, the figures show.
Private vs. public insurance
As happened in nearly all 50 states, Indiana saw a decline in private health insurance coverage from 2008 to 2010, the worst years of the economic downturn.
The percentage of Hoosiers with private insurance bottomed out in 2010 at 64.6 percent, down from 69.1 percent in 2008. In the past couple of years, as the economy has recovered slowly, that figure inched up to 64.8 percent, according to the recently released American Community Survey from the Census Bureau.
As private insurance declined, the number of people enrolled in public programs such as Medicare and Medicaid increased. The percentage of Hoosiers with government insurance was just 15.2 percent in 2008. It peaked at 16.9 percent in 2010 and fell slightly to 16.4 percent last year, when the economy started to regain strength.
While the overall number of Americans with health insurance hasn’t changed much in the last year, the number of people on Medicare has seen a significant increase. The Census figures show 15.7 percent of Americans covered by Medicare in 2012, up from 15.2 percent the year before.
The increase in Medicare coverage is no surprise, as the oldest baby boomers turn 65, Tatom said. “We’re going to see a lot more of that” for the next 20 years.
Big changes ahead
Major provisions of the Affordable Care Act, better known as Obamacare, will take effect in January. As a result, experts believe, when these same figures are released next year, they will look markedly different.
“I think we’re going to see an enormous change next year” when about half of the states expand their Medicaid programs and health insurance becomes mandatory, Skinner said. “I think there’s going to be a dramatic fall in the number of uninsured and a big expansion of those insured by government programs,” he said.
Obamacare will not provide health insurance coverage for 100 percent of the population, Tatom said. But it is expected to provide coverage for an additional 20 million people over the next few years.
“That’s a pretty good-sized number,” he said.
As January draws near, key parts of the Affordable Care Act will begin to take shape, perhaps clearing up some of the uncertainty surrounding the 2,000-page law. Anyone without insurance will be required to purchase it. Government and private “exchanges” will offer various insurance plans. Some states will implement their own exchanges. Others, such as Indiana, will allow the federal government to operate their exchanges.
Some changes are already taking place.
“The big trend lately has been large employers establishing private health-care exchanges and moving their employees and/or retirees to the exchanges, rather than purchasing traditional employer-provided health insurance,” stated Terrie Troxel, former director of the Networks Financial Institute, in an email Thursday for this article. Networks Financial Institute, in the Scott College of Business at ISU, offers expertise in public policy and research in insurance along with other financial services.
“The advantage to the employees is that they get access to a larger selection of health insurance plans from competing insurers,” he wrote. “For the employer, it shifts the risk of higher costs to the insurers and/or the employees/retirees depending on the amount of funding provided by the employer.”
HSAs and Obamacare
One big question for the future of health insurance in America concerns the future of health savings accounts, Tatom said. Obamacare is designed to reduce these types of policies by removing their tax incentives, he said. But many employers have recently launched new programs that, in practice, function much like HSAs, he said.
Walgreens, Sears Holding and Darden Restaurants are a few big employers that recently have opted to give their employees cash to allow them to shop for their own health insurance coverage, Tatom noted. This allows employers to take uncertainty out of their health-care costs and, to some degree, could make the health insurance market more competitive, he said.
But health insurance costs can only fall so much. Obamacare requires coverage for more health-care services than before, leading many people to expect higher premiums.
Consumers “won’t be able to choose too cheap of a policy because they have to buy some benefits that they didn’t have to buy earlier,” Tatom said. Obamacare mandates more preventive-care coverage, for example, he noted.
“The question about future costs under [the ACA] is difficult to answer because so much depends on participation rates, availability of health-care providers and so forth,” Troxel wrote. “So a lot of variables are yet to be known.”
Young adults covered
Another big change resulting from Obamacare that shows up in the Census data involves Americans ages 19 to 25. The Affordable Care Act allows people up to age 26 to remain on their parents’ insurance policies. As a result, the percentage of 19- to 25-year-olds without insurance dropped to 27.2 percent in 2012, after reaching nearly 30 percent two years before.
“That makes a lot of sense,” Skinner said.
The number of people younger than 18 without insurance also declined in 2012, Skinner noted. That may be a result of Medicaid expansion in some states. It also could be a result of the improving unemployment situation, as newly hired adults add their children to their workplace policies, he said.
Asked whether private insurance coverage will drop dramatically under Obamacare, Skinner said the National Center for Children in Poverty doesn’t believe so.
“We really don’t anticipate that,” he said. “We think [the Affordable Care Act] is really just going to be picking up folks that are uninsured.”
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