What’s more surprising: that a record 1.84 million Texans enrolled in Obamacare for 2022 or that over 2 million others passed on insurance despite being eligible for cost-cutting subsidies?
Texas has over 5 million uninsured residents, far more than any state, and it doesn’t have to be that way. Over half the uninsured Texans are eligible for affordable options on HealthCare.gov, including subsidies that were expanded this year and will remain in place through at least 2025.
So what’s holding people back? Usually, they say they can’t afford health insurance, but the numbers tell a different story.
Most who cite high prices are actually eligible for deeply discounted coverage – often from no monthly premiums to $10 a month, said one expert.
“That suggests price is not actually the barrier; it may be the perception of price,” said Charles Miller, senior policy adviser at Texas 2036, a nonpartisan think tank studying some of the state’s biggest challenges.
Historically, the biggest barrier to covering more people has been the cost. Monthly premiums, annual deductibles and co-payments for treatment can easily run into thousands of dollars a year.
The Affordable Care Act, which took full effect in 2014, was designed to counter the cost problem with subsidies based on income. Yet two-thirds of uninsured working-age adults in the U.S. said they didn’t even shop for plans on HealthCare.gov, according to a 2018 survey by the Commonwealth Fund.
During the pandemic, those subsidies got larger and enrollment climbed nationwide with Texas’ growth leading the way. In 2022, 94% of Texans signing up for an exchange plan received premium subsidies, and over 60% got help with deductibles and co-pays.
For those getting a subsidy, the average premium was $60 a month, and nearly four in 10 Texas customers paid $10 or less after tax credits.
Since summer, Texas 2036 has surveyed uninsured residents and held virtual focus groups, seeking to understand why many eligible for subsidies were not signing up. Several people said they went to HealthCare.gov, entered income and family information, and got health plan offers for about $300 a month.
But subsidies should have covered all or nearly all the monthly premiums in those specific cases, Miller said.
“There was a disconnect between what we would expect and what people were experiencing,” Miller said. “Which is different than having a vague perception that it’s expensive and not having even tried.”
Most of Texas’ uninsured can be divided into four categories.
Over 2 million are already eligible for subsidies on the exchange but have not enrolled, according to the Kaiser Family Foundation. That’s the richest target to reduce Texas’ uninsured rate, which is the highest in the country.
An estimated 635,000 other Texans have been locked out by the so-called “family glitch.” That occurs when a breadwinner gets coverage from work but cannot afford to add a spouse and kids, and those family members are ineligible for subsidies.
A rule change this month will allow family members to apply for separate subsidized plans for 2023 open enrollment, which runs from Nov. 1 to Jan. 15.
“When thinking about our 5 million uninsured, realize that a whole bunch of them are already eligible for some type of affordable coverage,” said Stacey Pogue, senior policy analyst at Every Texan, an Austin advocacy group.
An estimated 662,000 – mostly kids – are eligible for Medicaid, Kaiser said. But they must be signed up and, after the COVID emergency ends, work to stay on the state’s Medicaid rolls.
Texas could reduce the number of uninsured significantly by expanding Medicaid to working-poor adults, a key plank of the Affordable Care Act. That would cover an estimated 771,000. But Republican lawmakers have voiced concerns about the long-term costs, and Texas remains among 12 states not adopting Medicaid expansion.
There’s one more large group of uninsured: an estimated 733,000 undocumented immigrants barred from buying a plan on HealthCare.gov, even without financial help.
Many people assume these immigrants are the reason for Texas’ large uninsured rate. They account for 14% of Texas’ uninsured, similar to the nationwide share of 13%.
“It’s one of the biggest myths I hear: that undocumented immigrants are driving Texas’ worst-in-the-nation uninsured rate,” Pogue said. “It’s not true. You could take away all the undocumented immigrants and Texas would still be a leader in the uninsured.”
Far too many Texans believe they’re not qualified for plans on HealthCare.gov or not eligible for financial help. In surveys by Texas 2036, 70% of the uninsured said they didn’t know if they could get subsidies. The most-cited reasons for not getting coverage were related to being employed, not having company insurance or being ineligible for subsidies.
But exchange plans are designed for folks who don’t have insurance through an employer. And 94% of Texans qualified for subsidies this year.
“There’s still a lot of lack of clarity in terms of how to think about subsidies and who qualifies,” said Lisa Lough, president of Cigna’s individual and family plans, which has Dallas-area offers on HealthCare.gov for 2023. “There’s a large part [of the population] sitting out just because of a lack of understanding and not realizing what’s on the table and available to them.”
Chris Gay, CEO and cofounder of Evry Health, a Dallas insurance startup, has a similar take. In our current system, he said, there are two major levers to boost enrollment: using subsidies as incentives and communicating those benefits to potential customers.
“At this point, it’s really a communications challenge more than a subsidy challenge,” Gay said.
Lough urges people to ask for help from brokers, insurance agents and navigators certified to assist applicants. Over time, people will understand more about how insurance works and the trade-offs in premiums, co-pays and networks.
But enrollment on the health exchange is a complicated process. Pogue of Every Texan said applicants have to answer questions about income, how many family members work and whether taxes are filed together.
“There’s no nice simple answer that can tell everybody if they’re eligible,” Pogue said. “It doesn’t have to be that hard.”
She pointed to another government health program that’s well understood and widely embraced in America: “Most people know when they’re eligible for Medicare,” she said. “You turn 65 – so you get Medicare.”
