Eligible Uninsured African Americans: 6 in 10 Could Receive Health Insurance Marketplace Tax Credits, Medicaid or CHIP

ASPE ISSUE BRIEF

By: Emily R. Gee

Abstract

Approximately 6 in 10 eligible uninsured African Americans in the United States could obtain Health Insurance Marketplace tax credits, Medicaid, or the Children’s Health Insurance Program (CHIP). This ASPE Issue Brief discusses the demographics of the eligible uninsured African American population and new health insurance coverage options available to them under the Affordable Care Act. There are 6.8 million eligible uninsured African Americans nationwide, according to data from the 2011 American Community Survey Public Use Microdata Sample, and one-sixth of all eligible uninsured in the United States are African American. Under the Affordable Care Act, 2.2 million uninsured African Americans may be eligible for Marketplace tax credits and 2 million for Medicaid or CHIP coverage.

Under the Affordable Care Act, 6.8 million eligible uninsured African Americans will have access to new options for health care coverage starting January 1, 2014.¹ Six in ten, or 4.2 million, of these eligible uninsured African Americans may qualify either for tax credits to purchase coverage in the Health Insurance Marketplace (2.2 million) or for Medicaid or the Children’s Health Insurance Program (CHIP) (2.0 million). If all states were to expand Medicaid, 95 percent of all eligible uninsured African Americans would be eligible for Marketplace tax credits, Medicaid, or CHIP.

Of the 41.3 million uninsured nonelderly U.S. citizens and others lawfully residing in the United States (a group referred to as “eligible uninsured” in this brief), 6.8 million people or one in six (16 percent) are African American. African Americans are uninsured at a higher rate than the U.S. population overall; 16 percent of all nonelderly U.S. citizens and others lawfully residing are uninsured, while the comparable proportion among eligible African Americans is 20 percent.

Location — The five states with the greatest number of eligible uninsured African Americans are:

• Florida                       677,000 (10 percent of all eligible uninsured African Americans),
• Georgia                      631,000 (9 percent),
• Texas                          617,000 (9 percent),
• North Carolina           380,000 (6 percent), and
• New York                   354,000 (5 percent).

The greater Atlanta, New York, Chicago, Dallas, Houston, and Detroit metropolitan areas are home to one-fifth (21 percent) of eligible uninsured African Americans (see Table 4). Approximately 15 percent of eligible uninsured African Americans live outside a metropolitan area, a lower proportion than among the eligible uninsured population overall (19 percent).

Gender — More men than women are uninsured in the United States. This is also the case for African Americans. Among eligible uninsured African Americans, less than half, or 44 percent (3.0 million) are women.

Age — Young adults are a disproportionately large share of the uninsured relative to their share of the general population. They are the age group most likely to be without health insurance coverage in the U.S.² The same is true among young African Americans: young adults ages 18 to 35 account for nearly half (3.2 million; 47 percent) of the African American eligible uninsured but only 30 percent of the eligible African American population overall. Of the 3.2 million eligible uninsured African Americans ages 18 to 35, 1.3 million (41 percent) are women and 1.9 million (59 percent) are men.

Employment — Most (73 percent) of eligible uninsured Americans live in households with at least one full-time worker. Similarly, six in ten (61 percent) eligible uninsured African Americans have at least one full-time worker in the family.

Education — About one-fifth (19 percent) of eligible uninsured African Americans did not earn a high school diploma, 71 percent have a high school diploma, and an additional 9 percent hold a college degree. Among all eligible uninsured Americans nationwide (41.3 million), 20 percent do not have a high school diploma, 68 percent have a high school diploma, and 12 percent hold a college degree.

Language — Nearly all (97 percent) of eligible uninsured African Americans report that they speak English as a first language or at least “very well” as a second language. Among those who do not, the most common language is French Creole, which is spoken by 1 percent of eligible uninsured African Americans.

Income — More than half (3.8 million; 55 percent) of all eligible uninsured African Americans have family incomes³ below 100 percent of the Federal Poverty Level (FPL), and nearly two-thirds of these people (2.4 million) live in states that are not expanding Medicaid. This means that more than one in three eligible uninsured African Americans may not gain access to affordable coverage through Medicaid in 2014 because their state declined to take the federally funded option to expand Medicaid eligibility.

Approximately 4.4 million eligible uninsured African Americans have family incomes at or below 138 percent of the FPL, the threshold for qualifying for Medicaid in expansion states. Of these 4.4 million, 1.5 million live in Medicaid expansion states.⁴

African Americans and the Marketplace

Each state has a Health Insurance Marketplace where consumers can shop for and purchase health insurance coverage. In states that are expanding Medicaid, individuals and families with household incomes from 138 to 400 percent of the FPL may be eligible for tax credits to make health insurance even more affordable. In states that do not expand Medicaid, those with family incomes between 100 and 400 percent of FPL may qualify for tax credits.

Of the 2.6 million uninsured African Americans eligible to purchase Marketplace plans, 2.2 million—or nearly 9 in 10 (86 percent)—may qualify for a premium tax credit for Marketplace coverage (see Table 2).⁷ The estimated 2.6 million Marketplace-eligible uninsured include 762,000 eligible uninsured African American adults (ages 19 and older) in Medicaid expansion states with incomes above 138 percent of the FPL, 1.7 million eligible uninsured in the remaining 25 non-expansion states with incomes above 100 percent of the FPL, and 117,000 eligible uninsured African American children from all states with family incomes above 250 percent of the FPL.⁸

Table 5 contains examples of premiums before and after tax credits are applied.

African Americans and Medicaid

Many uninsured African Americans may be eligible for coverage through Medicaid or the Children’s Health Insurance Program (CHIP) at little or no cost. About 1.4 million eligible uninsured African American adults (21 percent of all eligible uninsured African Americans) who reside in states expanding their Medicaid programs may be eligible for Medicaid coverage. Additionally, approximately 615,000 eligible uninsured African American children ages 0 to 18 have family incomes at or below 250 percent of FPL and may be eligible for coverage under Medicaid/CHIP (see Table 2).

More than 2.2 million African American adults live in states that are not expanding Medicaid and have family incomes below 100 percent of the FPL. If all states were to expand Medicaid, 95 percent of all eligible uninsured African Americans would be eligible for Marketplace tax credits, Medicaid, or CHIP.

African Americans by Location

By State — As noted earlier, eligible uninsured African Americans are generally concentrated in Southern states. Nearly two-fifths (38 percent) live in Florida, Georgia, Louisiana, North Carolina, and Texas. Table 3 shows the number of eligible African Americans and those who are uninsured in all 50 states and the District of Columbia.

Table 3: Number of Eligible Uninsured African Americans by State

By Metropolitan Area — Eligible uninsured African Americans are concentrated in certain metropolitan areas as shown in Table 4, which lists the top 20 metropolitan statistical areas by the number of eligible uninsured African Americans. Four in ten of the nation’s eligible uninsured African Americans live in one of these 20 metropolitan areas.

Table 5: Examples of Marketplace Monthly Premiums after Tax Credit

This table includes premiums for two illustrative groups, a single 27-year-old and a family of four, in major metropolitan areas in selected states with large eligible uninsured African American populations. For example, in Jefferson County, Alabama, which includes the city of Birmingham, a 27-year-old with income of $25,000 could purchase a bronze plan for as little as $104 per month after the tax credit. If a city spans more than one county, the premiums below are for the county which covers a larger area of the city.

Methodological Overview and Study Limitations

This analysis is based on ASPE analysis of the 2011 American Community Survey Public Use Microdata Sample (ACS PUMS), the best source for obtaining information about the current characteristics of the uninsured population at the state level and for smaller demographic groups. ASPE tabulations from the ACS PUMS have been adjusted to exclude estimated undocumented persons based on ASPE’s TRIM3 microsimulation model (http://trim.urban.org).¹⁶

The smallest geographic unit defined in the ACS PUMS is the Census-defined public-use microdata area (PUMA). To obtain metropolitan area estimates, we assigned PUMAs to metropolitan statistical areas based on a crosswalk created from the University of Minnesota’s Integrated Public Use Microdata Series.¹⁷

Our methodology for examples of plan premiums is described in detail in an earlier ASPE brief titled “Health Insurance Marketplace Premiums for 2014.” The full text is available online at

http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/ib_marketplace_premiums.cfm. Complete plan data for some states is available at https://www.healthcare.gov/health-plan-information/, and the remaining premium data was obtained from state Marketplace sources.

For family incomes used to estimate Marketplace and Medicaid eligibility, the “family” is defined as the “health insurance unit” (HIU). HIUs include adults plus their spouses and dependent children (ages 0 to 18, plus full-time students under age 23) living in the household, based on ASPE analysis of the ACS PUMS data.

The estimate of uninsured Medicaid-eligible adults is the number of adults age 19 older who have family (HIU) incomes below 138 percent of the FPL and live in one of the 25 Medicaid expansion states or the District of Columbia. Although the statutory threshold for Medicaid expansion set by the Affordable Care Act is 133 percent of the FPL, this brief uses 138 percent of the FPL, which is the effective threshold when the 5 percent statutory disregard is included.

We made the simplifying assumption that children in families with incomes at or below 250 percent of FPL are eligible for CHIP, and children in families with incomes between 250 percent and 400 percent of the FPL are eligible for Marketplace coverage with premium tax credits. We recognize that states have different maximum income standards for CHIP eligibility.

Notes

¹ ASPE tabulations from the CY 2011 American Community Survey Public Use Microdata Sample (ACS PUMS) are adjusted to exclude estimated undocumented persons based on ASPE’s TRIM3 microsimulation model. All references to eligible uninsured in this brief use these tabulations. See the methodology section for more information. For more information about eligibility to purchase coverage in the Marketplace, see https://www.healthcare.gov/immigration-status-and-the-marketplace/. The estimates contained in this brief do not take into account certain Marketplace coverage and Medicaid/CHIP eligibility requirements, such as those relating to other minimum essential coverage or tax filing requirements, and thus the populations described in this brief should be construed as “potentially” eligible, subject to these other requirements. Also, the statutory threshold for Medicaid expansion set by the Affordable Care Act is 133 percent of the FPL, not 138 percent of the FPL. This brief refers throughout to 138 percent of the FPL, which is the effective threshold including the 5 percent statutory disregard.

² For the most up to date information on the demographic characteristics of the uninsured, including by age and gender, see a summary of the Census Bureau’s Current Population Survey released in September 2013 at http://aspe.hhs.gov/health/reports/2013/CPSIssueBrief/ib_cps.cfm.

³ For family income, a “family” is based on the “health insurance unit” (HIU), which includes adults, their spouses, and their dependent children (ages 0-18, plus full-time students under age 23), using ASPE analysis of the ACS PUMS data.

⁴ Our analysis assumes that the following 25 states plus the District of Columbia expand their Medicaid programs: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Rhode Island, Vermont, Washington, and West Virginia.

⁵ The sum of expansion and non-expansion state estimates may not equal the stated total for all states due to rounding.

⁶ Estimates in this row are for all nonelderly (ages 0 to 64) African American who are U.S. citizens or lawfully residing in the United States.

⁷ We define Marketplace-tax-credit-eligible individuals in this analysis as uninsured U.S. citizens and others lawfully residing in the area served by the Marketplace who are adults (ages 19 to 64) with family incomes above 138 percent to 400 percent of the FPL in Medicaid expansion states and above 100 percent to 400 percent of the FPL in non-expansion states or who are children (ages 0 to18) with incomes 250 percent to 400 percent of the FPL.

⁸ We make the simplifying assumption in this analysis that all children with incomes below 250 percent of the FPL would be eligible for Medicaid/CHIP rather than the Marketplace.

⁹ The sum of expansion and non-expansion state estimates may not equal the stated total for all states due to rounding.

¹⁰ In non-expansion states, some eligible uninsured may currently qualify for Medicaid and are not enrolled, and such individuals are not included in our analysis. For expansion states, our estimate of the eligible uninsured who may qualify for Medicaid includes both the current and the newly eligible.

¹¹ The 15-state total is based on the 15 states corresponding to the top 20 MSAs listed in the table, not the 15 states by greatest number of eligible uninsured African Americans.

¹² For the purposes of this analysis, a family of four is defined as two 30-year-old adults and two children.

¹³ Net of tax credits, bronze premiums for a family of four may be below those for a single individual and may be as low as 0. This occurs because the tax credit is calculated as the difference between the cost of the second lowest cost silver plan premium and the maximum payment amount determined by income. Because premiums for older individuals and families are higher than those for younger individuals, tax credits are larger for older individuals and families. Therefore, using tax credits to purchase a bronze plan may yield lower bronze premiums for older individuals.

¹⁴ Los Angeles County is split into two rating areas for Marketplace premiums.

¹⁵ Information on the lowest-price catastrophic plan in the Baltimore metro area was not readily available.

¹⁶ The adjustment methodology is based on imputations of immigrant legal status in ASPE’s TRIM3 microsimulation model (http://trim.urban.org/), according to methods initially developed by Jeffrey Passel and Rebecca Clark.

¹⁷ The Integrated Public Use Microdata Series (Version 5.0) was developed by Steven Ruggles, J. Trent Alexander, Katie Genadek, Ronald Goeken, Matthew B. Schroeder, and Matthew Sobek at the University of Minnesota. Available online: https://usa.ipums.org/usa/index.shtml.