Neighbor Wednesday: Unaffordable health insurance (or losing ACA subsidies)
(And, why that matters to neighboring)
Healthcare costs are the #1 expense people are worried about right now.
Phew, things are expensive out there, am I right? I was listening to a favorite podcast when the host mentioned housing prices increased by 40%, 50%, 60% over the past few years. Top that with a 19% increase in food, inflation, rising property taxes, and insurance rates, and we are seeing the highest monthly costs in the US since the first data was collected more than 3 decades ago.
To put it simply, families are pinched. Families who were already struggling with food insecurity and poverty are doubly (triply+++) so now.
Now that the Affordable Care Act (ACA) subsidies have expired, insurance rates have skyrocketed.
What’s the ACA?
The ACA was enacted in 2010 to expand health insurance to uninsured individuals through a marketplace with varying premiums based on their incomes. And it was a big success! An analysis of how the ACA helped people access health insurance found:
“Among non-Hispanic Black individuals, marketplace enrollment among eligible individuals more than tripled, from 10.3% prior to the subsidies to 31.0% after implementation.
Among Hispanic individuals, enrollment among eligible individuals increased about three-quarters, rising from 13.3% to 23.4%.
Among rural residents, enrollment among eligible individuals more than doubled, from 12.6% to 25.6%.
Among children 18 and under, enrollment among eligible individuals nearly doubled, from 18% to 35.8%.
Among part-time workers, enrollment among eligible individuals increased by more than two-thirds, from 20.2% to 34.5%.”
“These are not incidental changes,” Jacobs [study author] says. “Before the enhanced subsidies, there were large gaps in who took up marketplace coverage across racial and ethnic groups. After the subsidies, those gaps essentially disappeared. This tells us the enhanced subsidies changed who could realistically afford insurance.”
This means that families can afford health insurance and the premiums are lower. For example, a low-income family of four would pay nearly 7% of its total monthly income for health insurance without the ACA. However, the percentage dropped to 2% with the ACA subsidies - meaning that the families had more money left in their bank account to pay for food, rent, daycare…
And, the study cited above was in 2022.
Fast forward to today, and that same family of four’s finances would be stretched thin. Like really thin. On average, the monthly health insurance cost for a single adult is now $752, an increase of $129 without the subsidies. That’s an extra $1,554 PER YEAR and only includes one person. If your annual household income is $22,000-28,000, your annual premium payment goes up ~$1,200. Read that last sentence again - the annual income of $22,000-28,000 translates to $1,833-$2,333 a MONTH. You can barely pay rent, utilities, and buy food for that as a family. So, adding an additional $129 to keep your health insurance is brutal.
Along with the ACA premiums, there are tax credits associated. Those were set to expire at the end of 2025 (although some states have come in to lessen the blow). The double whammy of losing both the tax credit and higher premiums is shocking. Premium payments will more than double if the tax credits go away. For a family of four, health insurance is now largely out of reach.
In my day job, I study the intersection of poverty and children’s health. The number one reason that families get thrown into poverty is because of high healthcare prices. And, that’s if they even decide to go to the doctor. Many, many families have to make a decision between going to the doctor when they need it or wait because it’s too expensive (and they need to buy food). In the US, an estimated 75% of uninsured adults delay healthcare because of the cost. For many conditions, waiting means the condition gets worse and continues to do so until they finally have to go to the doctor (or more likely, the ER and accrue $$$ in medical bills).
These are called impoverishing or catastrophic expenditures. Another way to think about it is this - families are one or two catastrophic health events away from poverty. You go to the ER one time and incur lots of medical debt - which you can’t pay off - so you have high interest rates - that you can’t pay off. So, you pay the minimum while also trying to pay for food or housing. Do you see the cycle of poverty perpetuated and continued by just one ER visit (or urgent care or doctor’s visit)? Families that live on the brink of poverty or in poverty already are one visit away from impoverishment. That’s a catastrophic expenditure.
And, that’s what I spend all of my working hours trying to figure out how to solve. Sure, we could throw money here and there for families. But that would only be a band-aid to a gaping wound. I also totally get that the entire health system could be overhauled to make healthcare in the US more affordable (but that’s a whole other post).
But today, especially today, families need to be able to access healthcare when they need it, and not have to worry about whether they can put food on the table that night.
Affordable healthcare and health insurance are doable. And, that brings me to neighboring. Without the subsidies, 22 million Americans are at risk of losing insurance entirely or incurring medical debt. Already, 36% of US households have some form of medical debt, and 3 million owe more than $10,000. Each year, 67% of ALL people who file for bankruptcy do so because of medical bills. With all things in neighboring, the burden of medical debt is not equal. Our low-income, uninsured, and Black or Hispanic neighbors bear a disproportionate burden.
Medical debt is also one of the main drivers of housing instability - especially if you have a single-family home with children.
I guess what I’m trying to say is that affordable health insurance matters.
It not only matters to a person’s or a child’s health. It matters whether or not that family can buy food and stay in their home. It’s a compounding effect that is not equal and a downward spiral that is extremely hard to get out of.
Why focus on medical debt?
Because it is usually one of the first on-ramps to poverty. And, it makes sense if you think about it. If your child or family member is really sick or hurt, you’re going to want to get them to care as quickly as possible. We will do what it takes to care for our children, especially if the situation is dire. So, that make-or-break moment turns into a ‘full break’ moment when the ER bill is too much and you don’t have insurance or a nest egg to cover it. How do you get out of that spiral when you’re still trying to buy food? It’s extremely hard and not as simple as pulling yourself up by your bootstraps. Especially when you haven’t been able to afford those anyways.
So, why medical debt? Because it’s the main driver of housing insecurity, a main driver (the main?) for poverty, a contributor to food insecurity, and a cycle that’s hard to get out of.
And, also.
It’s a keystone moment for intervention. Lowering people’s risk of debt (helping them afford healthcare and health insurance through subsidies like the ACA) not only helps them physically thrive but can keep them in their homes and able to feed their families.
That’s neighboring to me. And, sounds like the Good Samaritan story, doesn’t it? Remember when the good Samaritan helped bandage up the hurt man on the side of the road? AND THEN took him to a place to recover and told the innkeeper that he would pay for it all?!? I mean!! This story is layered with nuance for today. It’s not just about bandaging up people’s physical needs. To me, it’s also about making sure they aren’t bankrupt from medical expenses (including the recovery time).
To me, that’s why medical impoverishment and the ACA are ‘neighbor’ issues. (That’s why I wrote an entire book about health equity, loving our neighbors, and the Good Samaritan story. Here’s the Bookshop link (support your local bookshop!) or Amazon link.)
“And he paid for all of it.”
That sounds like government systems that are aligned more like the Good Samaritan story, doesn’t it. (And, fun fact, subsidies like the ACA or assistance programs like SNAP benefits are actually good for the whole economy too - but that’s for another post).
Keep neighboring, friends. You’re doing great work!
-Emily
I truly wish for the day...time, when those who hold elected position in your Congress stop fighting between who's on the 'left' & 'right' and work to support the American citizenry. Side bar, the concept of left & right, or the Canadian parallel of Liberal & Conservative said to 'lean' in opposite directions strange.
Other than DJT who is pathetic individual by any objective assessment & frankly by those who appear to support his action only due to fear of retribution; most working in government care about their 'neighbours'. It's a 'short-man's game's (not referencing stature) to work for one's self interest or one's constituents at the expense of the larger community.
Social assistance in its totality raises the welfare of the entire community.
I struggle with the concept of being "fortunate" in where I live & there are many challenges within my neighbourhood & nationally. There are many disadvantaged population across Canada...homeless people, First Nation communities, immigrants, etc. Maybe I am wishful or naive in that it's not as tragic as the public display across America or is it simply not on the same scale? Canadians are certainly not without their faults, however in the context of this post we do not have the risk of poverty for lack of 'healthcare'.
Cival rights within America have improved substantially & there may be hope for equatable healthcare for all Americans.
Respectfully yours,
JJF Phm 🇨🇦