Census: bad news on poverty, good on health care

RogerNew Census data released last week confirms something that we all probably knew: unemployment might be down and the economy might be growing, but the benefits are far from reaching everyone.
Poverty and child poverty rates in the state remain unchanged. Although the poverty rate edged up slightly ( from 10.7 in 2013 to 10.8% in 2014) the change is too small to be statistically significant. In layman´s terms, the difference between both numbers is small enough that we can´t say if the drop is really there. Child poverty also went up a bit (from 14.5% to 14.9%) but the change is also too small to be considered statistically significant.
What the data shows, however, is that racial disparities remain stubbornly high. The poverty rate in Connecticut among non-Hispanic Whites is 6.1%; the number climbs to 20.8% for Blacks, and 26.5% for Hispanics. For children, the gap is even wider. Only 5.6% non-Hispanic White Children are poor, compared to 30.5% for Blacks and 33.4% for Latinos. These disparities remain as wide as they were a year ago.
By county, the geographical differences in the state have not changed. Litchfield (7.5%) and Tolland (7.3% ) counties  have the lowest poverty rate, while New Haven (13.1%) and Hartford (12.2%) have the highest.
You can access the census data on their website. As usual, CT Voices for Children has an excellent write up.
Besides the disappointing poverty data, the Census release included a very important piece of good news: the Affordable Care Act (ACA) is working really well. The percentage of residents in Connecticut without health insurance dropped from 9.4 to 6.9%. The decrease is statistically significant – close to 90,000 people that did not have insurance last year have it now.

For children the drop is smaller, and not statistically significant, although the starting point was already low: only 3.7% of Connecticut children remain uninsured, down from 4.3% in 2013. Full coverage is within grasp.

The ACA is not just having positive effects in our small, progressive state in the northeast. Nationwide, the uninsured rate has dropped from 14.5% to 11.7% in one year. The decrease will be even steeper with wider Medicaid adoption, but the trend is in the right direction.

As usual, CT Voices have a policy brief covering this issue as well. You can find it here.

Link of the day: the case for heavier babies

Have you ever wondered why CAHS´Kids Count Data Book includes information on low birth weight babies? As you probably know, this is an indicator of the health of the mother during pregnancy, and has a strong effect on child development.

How strong? The New York Times published on Sunday a review of a new study linking birth weight and school achievement, and the results are striking. On average a 10 pound baby will score 80 points higher on the 1,600 point SAT than a 6 pound one. This is the difference between being quite a bit below the median (6-pound babies score in the 43rd percentile) or above it (10-pound babies score on average in the 57th).

Poor neonatal health, then, is crucial not just during pregnancy, but has long term cognitive effects. You can find the full study here.

Zbaby

Affordable Care Act 101 – our webinar

2054205021_87160f2c90CAHS hosted today an introductory webinar to explain how the Affordable Care Act (“Obamacare”) is being implemented in Connecticut. Deb Polun, from the Community Health Center Association of Connecticut, and Kate Gervais, from Access Health CT, were the main presenters, going over the legislation and how Connecticut residents can access to the new benefits.

You can download the full presentation here (WMV, 133 MB – there is a bit of a pause in the middle – wrongly muted microphones). Here is Deb’s presentation on the basic structure of the Affordable Care Act (PowerPoint); here is Kate’s slides on how the new law is being rolled out in Connecticut, and how people can apply for benefits or get help if they need assistance with the process (PowerPoint).

Why state policy work matters: Medicaid

Most political reporting is focused on the comings and goings in Washington, but the truth is that a lot of the most important policy decisions are taken at the state level. Take Medicaid: the Federal government funds the program, but state legislatures decide eligibility levels. The safety net might be paid mostly with Federal dollars, but it is the people in Hartford, Austin, Albany, Madison or Montgomery that decide who has access to it.

Paul Waldman, at the American Prospect, illustrates this reality:

medicaid_eligibility_by_state_ii

The numbers above are the income limit to apply for Medicaid for a family of three. Connecticut’s are more than ten times higher than Arkansas. At least in Little Rock this will change soon, as the state has signed up for the Medicaid expansion under the Affordable Care Act (starting January 1, the income limit there will be the same as in Massachusetts). Many of the stingiest states, however, are not participating, so in some corners of the country families will have well below the poverty line to qualify for health insurance.

That’s one of the reason why CAHS does so much policy work at the state level, and that’s why what we do in Connecticut matters. It is the state who decides how generous our safety net will be, not just Washington.

We work every day to make Connecticut a better place. Our policy work has helped  improve the safety net on our state in many ways, from the state EITC to Care for Kids. If you believe that our work is important, please donate.

The Affordable Care Act: a primer

2054205021_87160f2c90The Affordable Care Act (ACA) starts the final phase of its roll out tomorrow Tuesday. It is the largest expansion of the U.S. safety net in more than 40 years. It really is a big, big deal. It is also, despite all the noise, a fairly simple, elegant piece of legislation, based on some pretty simple ideas. The original blueprint behind the ACA framework comes from a Heritage Foundation policy paper (I am not joking) that you can read here. The law is a refinement of this model, with a few minor additions.

To explain the ACA, we have to begin with a simple question:

Why health insurance companies did not cover preexisting conditions?

The two main issue with health care coverage pre-ACA was simple: first, health care coverage was expensive. Second, health insurance companies did not cover patients with preexisting conditions.

Both issues seem to be unrelated, but they are not. Insurance companies basically work by pooling risk: they have X amount of clients paying premiums that barely need health care, and a tiny percentage of clients that need a lot of it. The premiums of the healthy are used to cover the bills of the sick. We sign up for insurance mostly because we really don´t know if we are going to be sick or not; we pay a little now just to lower the risk of being hit with huge bills later.

Patients with preexisting conditions, however, are different: for an insurer point of view, they are people that have a much higher risk of needing health care. That is, they are always more expensive to cover, so insurance companies try to avoid them. They want their risk pool to be balanced, with a small percentage of sick people and a big group of healthy-premium payers to cover their bills. If you are unlucky and had an accident, illness or chronic condition around, tough luck.

A health care system that excludes former cancer patients, people with HIV or diabetes, however, is obviously unfair. It is no one´s fault to get ill; the government should not allow this to happen. Let´s say that legislators reacted and decided to ban insurance companies from denying insurance to patients with preexisting conditions, trying to right this wrong. This is one of the founding stones of the ACA, and one of the most important features of the law. What would happen?

For starters, no one will get health insurance. If you are healthy and you know that you can sign up for a plan the moment you get sick, why should you pay monthly premiums? Everyone will wait until they get sick before signing up for coverage, leaving the insurers with a risk pool full of sick people. Only people that really need insurance will get it, so the premiums will skyrocket. An insurance dead spiral that will leave everyone without coverage.

To prevent that from happening, the ACA uses a pretty simple, straightforward solution: the individual mandate.

The individual mandate

In a world with preexisting condition coverage, every one has a very strong incentive to free ride: remain insurance free, and hope someone else is paying the bills. The individual mandate strives to avoid that: to make sure that no one is shirking his responsibility by not paying into the system until they get sick, the government mandates everyone to get insurance, or pay a penalty.

Although the individual mandate is the most unpopular piece of the ACA it is by far its most important component, as it enables the rest of the law to work. If everyone must have insurance coverage, no matter their health, the risk pool will have a good mix of sick and healthy individuals, making risk sharing through insurance possible. The penalty works like a tax on free riding: for those that don´t feel like participating in the system, they at least have to cover the risk of them falling ill and applying for insurance when they need it.

The individual mandate also plays a role in enabling the ACA to use community rating: insurers can not charge higher premium to women, and have limits on how much extra they can charge by age. Insurers prefer to attract young people to their rolls, as they get ill less often. The individual mandate essentially forces the young and healthy to the risk pool, enabling the ACA to keep premiums for seniors lower.

We are mandating coverage, then, to make sure that people that are too old or too sick to get health coverage have access at the same price as the rest of the population. What we haven´t yet resolved, however, is access to those that are simply too poor to afford insurance, and can not pay for coverage, even with these regulations in place.

Fortunately, the ACA has a solution for this issue: subsidies.

Medicaid expansion and tax credits

The ACA mandates the purchase of health insurance coverage. Its designers, fortunately, understood that not everyone can pay for it right away, so the legislation includes an extensive system of subsidies and supports for those that need them.

First, Medicaid eligibility is greatly expanded: anyone under 138% of the Federal Poverty Line will be eligible for the program in the states that choose to embrace the expansion. In practice this means than liberal-leaning states like Connecticut will be able to enroll tens of thousands of people in health insurance, with the costs being covered by the Federal government.

For those above the threshold, the ACA includes additional support in the form of tax credits to purchase private insurance. Any family or individual between 138 and 400% of the Federal Poverty Line (note that 400% FPL is above the median income in the US, so this subsidies do cover a lot of people) will be able to claim these subsidies, calculated on a sliding scale.This means that for many working families purchasing insurance in the open market the ACA will cover most of the premiums, making coverage affordable.

The structure of the law is, in fact, remarkably simple: we want to cover preexisting conditions, so we need an individual mandate. If we force everyone to have insurance, we need to help low income families comply by subsidizing it. This is the ACA in a nutshell.

Odds and ends: exchanges, employee mandate, small business credits

Some final details worth pointing out. All of the above is only immediately relevant for the currently uninsured or for those getting health insurance in the private market, and not through their employer. The health insurance exchanges / market places like Access Health CT focus on those groups. The exchange is essentially a central hub for people that are not covered by their employers to compare private insurance plans and get their tax credits automatically.

The ACA has two additional features for the the employer-based system: first, large business are mandated to provide health insurance to their full time workers, or they will have to pay a penalty. Second, small businesses that offer health coverage will get a tax credit. The employer mandate as it stands in the law is notoriously clumsy, and it has been delayed for a year. Small businesses will also be able to purchase insurance through a dedicated exchange/market place, but its roll out has been delayed until November.

All in all, The exchanges get rolling tomorrow; the tax credits, individual mandate, tax credits and Medicaid expansion kick in January 1st. It is a good law: simple, elegant and conservative in the best way possible, not trying to fix what is not broken. The country will be better off with it. Tomorrow is a big day.

Obamacare: it might just work as intended

Way back in 2009, when the CBO was estimating how much people were going to pay for health insurance in the soon-to-be-created exchanges, they gave a pretty startling number: $433 a month per person, on average, for a silver plan.

A lot of studies looked similar, and critics started talking about “sticker shock” once the law was implemented. The Affordable Care Act would be forcing people to get expensive insurance that they can not pay, and so on.

Well, we are starting to see the exchanges come to life, and it turns out that the premiums are coming much lower than everyone expected. California just published the list of plans and premiums from their (gigantic) exchange, and the cheapest silver plan for a 40 year old male costs $276 a month, or a 63% of the expected cost. This premiums would be for unsubsidized plans; for individuals below 400% the Federal Poverty line, the costs would be actually much lower (in grey, the subsidy amount):

silver 40

¿Surprising? Well, sometimes it turns out that legislation does work as intended; a big pool of potential clients, plus standardized, comparable plans, plus plenty of competition between insurance companies translates into pretty affordable prices. Admittedly California is a huge market with more than seven million uninsured and their exchange have pretty detailed cost-control regulations, but the basic structure of Obamacare is sound, so it is not surprising that it might just deliver.

The most important bit of this prices, by the way, are not the premiums for forty-somethings; the success of the law lies in convincing low risk, young patients to enroll instead of paying the penalty. The premiums on that end are pretty affordable, all things considered. Here we have the cheapest bronze (less generous) plans:

bronze 21

Again, not too bad, and the subsidies make a huge difference. This legislation might just work as promised. And that´s very good news. The rates so far in Connecticut don´t look terrible, but we haven´t seen the insurance carriers competing yet. We´ll see.

Actually, people do die for lack of health insurance

Conservatives have been asserting this past week that having health insurance is really not that important.  Mitt Romney has mentioned in a couple of interviews than people do not die because have health insurance; if someone gets ill, they always can get taken care off in the emergency room.

There is a small problem with this statement: it is completely wrong. Take, for example, this recent study from a team of researchers at John Hopkins comparing mortality rates after having a heart attack or stroke: the uninsured had a risk of death 31% higher than those with private coverage after the heart attack.

Both patients, insured and uninsured, went to the hospital and were treated. As Sarah Kliff points out, however, the uninsured were much more likely to have skkiped out on preventive care, meaning that their health was much worse before the stroke / heart attack, and they were not able to afford the follow up treatment after:

In this analysis, insurance status is likely a proxy for access to care and subsequent poor or incomplete management of cardiovascular risk factors among those with CVD. The phenomena associated with being underinsured, including insurance instability, problems with clinics accepting payments, and inability to afford medications, may be some of the factors that define this high-risk group and contribute to poor disease management.

This is only one study of several. Brian Beutler points at several others.  A recent report published on the American Journal of Public Health estimates that lack of health insurance is associated with as many as 44,000 deaths per year in the United States, ore than those caused by kidney disease.

As a senior policymaker put it not long ago (video):

There ought to be enough money to help people get insurance because an insured individual has a better chance of having an excellent medical experience than the one who has not. An insured individual is more likely to go to a primary care physician or a clinic to get evaluated for their conditions and to get early treatment, to get pharmaceutical treatment, as opposed to showing up in the emergency room where the treatment is more expensive and less effective than if they got preventive and primary care.

That was Mitt Romney in April 2006, in a presentation before the Chamber of Commerce, by the way.