(A version of this Health Alert was published by Forbes.)
The Centers for Disease Control and Prevention’s National Center for Health Statistics conducts thorough research on health insurance coverage. Recently published early results of the latest National Health Interview Survey have been misrepresented in the media to show that Obamacare is reducing the number of uninsured Americans, and that the number of people having trouble paying for health care has dropped as a result.
Actually, this is not the case. The data show some factor other than Obamacare has caused the survey’s respondents to state that they are having less trouble paying medical bills than in previous years. We know this because those who remained uninsured improved their ability to pay medical bills more than those who got coverage through Obamacare.
Only 45 million Americans under 65 years old reported they were in families with problems paying medical bills in 2015. In 2011, the number was 57 million. That drop of 12 million corresponds with a significant increase in health insurance coverage. The number without insurance dropped by 18 million, from 46 million to 28 million, while the population increased by about three million.
So, it looks like two thirds of the 18 million people insured after Obamacare took hold have no more worries about medical bills. Hooray for Obamacare, right? Not at all. In fact, it is those who remained uninsured who account for the biggest share of the decrease in the number of Americans with troubles paying medical bills.
Looking back at 2011, the 57 million with trouble paying were spread out across all categories of insured status: 24 million had private insurance, 17 million had government coverage (usually Medicaid, the joint state-federal welfare program for low-income households), and only 16 million were uninsured.
By 2015, the proportion of uninsured with trouble paying medical bills dropped to 30 percent from 36 percent in 2011. That is the same percentage-point drop as took place among those dependent on government, for whom the share dropped from 28 percent to 22 percent. The share of those privately insured with trouble paying medical bills barely dropped, from 15 percent to 13 percent.
Of the 21 million who gained coverage from 2011 through 2015 (of which 18 million were uninsured, plus population growth of three million), five million were added to Medicaid and other government programs. Although the government and most analysts describe these people as “insured,” the description is inappropriate for the same reason that nobody describes people receiving cash welfare benefits as “employed.”
Although the government promises these low-income people health care for free or almost free, they actually have very difficult access to care because a significant number of doctors do not accept payment from Medicaid. So, Obamacare’s shifting uninsured patients to Medicaid dependency is unlikely to relieve their challenges with medical bills, relative to those who remain uninsured.
As for the 16 million who gained private coverage, this number combines people with employer-based benefits and those with individual policies purchased on Obamacare’s poorly performing health insurance exchanges. The latter experience very high deductibles, co-pays, and are entangled in confusing and restricted networks of providers. So, it is not surprising that they have not experienced much relief on the payment front either.
Because Obamacare shifted so many from uninsured to Medicaid, the actual number of those dependent on government for their health care, who have with troubles paying medical bills, did not drop very much. They account for only three million of the 12 million decrease. The privately insured account for only one million.
Fully eight million of the 12 million person improvement in the number of people in families with trouble paying medical bills between 2011 and 2015 took place among the pool of uninsured Americans. And that pool shrank by 18 million over the five years!
The survey does not explain how those left outside Obamacare have managed to get their health finances under control so well. To be sure, there may be some selection bias: Healthier uninsured patients were more likely to have remained uninsured than the sicker ones. However, the sickest ones would likely have fallen into Medicaid dependency, and those also had less trouble paying their bills in 2015 than 2011.
Perhaps these Americans have simply given up waiting for politicians to fix the health care system, and are taking control of their own health spending by discussing fees with doctors upfront, and negotiating payment plans. If so, that is a very good outcome from (or despite) Obamacare.