Low-income workers shying away from health insurance

Because of the various provisions of the Patient Protection and Affordable Care Act, the millions of Americans who do not have health insurance even now are required to either seek it or pay growing fines each year. However, it seems that many people across the country – particularly those with low incomes – are still not taking the step to obtain such coverage, for largely financial reasons.

Under the ACA, many small businesses with 50 or more employees would have to start providing their employees with health insurance coverage options, but not that those people would necessarily have to buy such coverage from their employers, according to a report from the New York Times. And indeed, many companies have so far found that while they feared the financial impact of potentially dozens or even hundreds of workers – most of whom earn very low wages, which was part of why they weren't insured in the first place – are simply saying, “No thanks” to employer-provided health insurance and simply going without.

What's happening instead?
While only about 10.7 percent of Americans under the age of 65 are now without health insurance – down sharply from the 17.5 percent seen five years ago – that isn't really because more people are buying coverage themselves, the report said. Many states expanded their Medicaid programs as part of the ACA, and that has accounted for a significant portion of the uptick in how many people are covered.

Problematically for low-income consumers who don't qualify for Medicaid, though, is that if they turn down health insurance from their employers (which many do for cost-related reasons) they instantly become ineligible for subsidized health insurance through the exchanges, the report said. That effectively locks out a large percentage of the uninsured population from being able to find coverage they can afford, especially if they either make more than the amount allowed to qualify for Medicaid or, more often, simply live in states where Medicaid was not expanded.

Millions of Americans are forced to make tough choices about health insurance.

Why is it happening?
Experts generally say that this issue – in which “affordable” employer-sponsored care is referred to as costing 9.5 percent of a person's salary or less – basically means that low-income Americans have to choose between necessities and their coverage, and obviously choose the necessities far more often than not. One industry insider told the newspaper that companies often offer plans that cost $120 per month, but for those making a little more than $300 per week, that's a tough pill to swallow.

This is an issue that leaders in the health insurance field and the federal government, as well as small business owners that employ many low-income workers, may have to work together to address more effectively going forward. Otherwise, that's still a huge swath of the population that may be going uninsured, and that ends up driving costs higher for just about everyone who does actually have health insurance as per federal law.