Is Obamacare to Thank for 2014′s Lower Uninsured Rate?

Source: Thinkstock

Source: Thinkstock

The uninsured rate has continued to decline since the requirement to have health insurance went into effect on January 1, 2014, according to the results of an early March survey of Americans for the Gallup-Healthways Well-Being Index. In fact, the survey found that the uninsured rate in the United States in on track to be the lowest quarterly level that Gallup and Healthways have measured since 2008. In the report, Gallup suggests that the drop could be a result of he Affordable Care Act.

The Affordable Care Act was designed to make affordable health insurance accessible to most all Americans via a two-part system: the expansion of Medicaid and the creation of insurance exchanges where individuals will be able to comparison-shop for health insurance policies in online marketplaces where their collective bargaining power will theoretically foster competition and drive down prices.

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Only weeks remain to sign up for insurance coverage via the insurance marketplaces created by the health care reform before the six-month enrollment period comes to a close. While it is yet unclear how close numbers will come to meeting the Obama administration’s goal for million enrollments, a figure that has been lowered from the original 7 million, it is true that uninsured rate for almost every major demographic group has dropped in 2014 so far.

Source: Gallup-Healthways Well-Being Index

Gallup found that in the first two months of the year, among those with annual household income of less than $36,000, the percentage of uninsured Americans has declined by 2.8 percentage points to 27.9 percent since the fourth quarter of 2013 — the greatest decline recorded for any demographic group. Meanwhile, the percentage of uninsured blacks has fallen 2.6 points to 18.3 percent, and the uninsured rate among Hispanics, the demographic group least likely to have insurance, is 37.9 percent.

In addition, the uninsured rate has dropped across age groups this year, except for those aged 65 or older. The insurance rate for Americans in the oldest age group likely remained constant because most Americans aged 65 and older have Medicare. Comparatively, the uninsured rates among 26- to 34-year-olds and 35- to 64-year-olds have declined, standing at 26.6 percent and 16.3 percent, respectively.

Yet, the February Enrollment Report released by the Department of Health and Human Services showed no significant changes in young adults’ enrollment in the insurance exchange since the December report, with the enrollment rate among 18- to 34-year-olds hovering around 25 percent. The Obama administration has calculated that of the 7 million people who are expected to enroll via the Affordable Care Act’s exchanges, around 2.7 million need to be young adults, whose premiums will cover the higher bills for the relatively small number of chronically ill people who sign up. Health care experts say 40 percent of new enrollees must be young and healthy for Obamacare to be successful.

Source: Gallup-Healthways Well-Being Index

At the same time, the percentage of Americans who are insured through a current or former employer declined by nearly two points so far in 2014, dipping to 43.4 percent. As Gallup found, more Americans now say their primary health insurance coverage comes through a plan fully paid for by themselves or a family member.

Compared with the final quarter of 2013, when 17.2 percent said policies were paid for by themselves or a family member, 18.1 percent of Americans fully pay for their insurance policies.

The percentage of Americans covered primarily through Medicaid also increased, likely because a majority of states chose to expand coverage.

At the end of February, the Department of Health and Human Services announced that Obamacare enrollments had reached 4 million. As Gallup’s Jenna Levy noted, “with the open enrollment period scheduled to close on March 31, the uninsured rate in the U.S. will likely continue to fall.” Administration officials always expected enrollments to gain momentum as March 31 approached, and that expectation was reaffirmed after the glitch-riddled rollout of the exchange kept sign ups low in October and November.

The U.S. insurance rate will also be impacted by the Obama administration’s March 5 announcement that Americans will be able to renew old health insurance plans for up to three years, even if the plans do not comply with Obamacare policy requirements. Plus, the employer mandate, which requires companies employing 50 or more to provide affordable insurance to full-time employees, has yet to go into effect.

The insurance exchange system — the cornerstone provision of the Affordable Care Act — is undoubtedly the most important and most hotly debated element of the health care reform. After all, the online marketplaces are the most the most far-reaching change to the American health care system in decades. Given the sweeping social, economic, and political ramifications of the individual insurance mandate that requires all people, except those that qualify for a hardship exemption, to purchase coverage, the law has had a rocky history.

Its passage in 2010 came without a single Republican vote, challenges to the law put the constitutionality of the individual mandate on the docket of the Supreme Court, and the glitch-riddled rollout of the insurance exchanges in October put the viability of the reform in question. But one of the largest test of the Affordable Care Act is how it improves the insurance rate.

As Gallup’s survey confirms, there are numerous factors influencing how many Americans are insured, from administration delays of portions of the health care law to whether a state chose to expand Medicaid, meaning it will be a difficult task to for years to judge whether the U.S. health care system was really made more accessible by the reform. And more tools are needed than the Gallup’s uninsured rate.

If those policies are deemed to be affordable and the coverage judged to be good, the tenor of the entire debate could change. But to change the narrative, the experiences of those Americans who benefit from the Obamacare-mandated changes to the insurance system — including those low- and middle-income earners qualifying for subsidies and those with preexisting conditions who cannot be turned away by insurers — will have to outweigh the burden the reform could place on those who find their premiums too expensive, desired doctors out of their network, and deductibles too high.

While the design flaws and software problems that marred the launch of the federal insurance exchanges are a dark moment in Obamacare history, Democratic pollster Joel Benenson has argued that glitch-riddled rollout will have little to do with how Americans evaluate the reform in the future. He told the Washington Post that most Americans “want leaders in Washington taking actions that will strengthen their economic security and keep growing jobs and our economy,” an indication that the Obama administration thinks the Affordable Care Act is part of its economic security agenda. “The only people obsessed with the ACA rollout today are Washington insiders,” he said, adding that “we have had a presidential campaign and a year in Congress where those who advocated for repeal of Obamacare lost.”

The Obama administration also has a few more loose ends to tie up before the battle for public opinion can be left to the quality and affordability of the exchange insurance policies.

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