Drop in uninsured rate suggests mixed results for doctors

Physicians could benefit from more young adults having private coverage but might need to prepare for the growing portion of government beneficiaries.

By — Posted Sept. 24, 2012

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U.S. Census Bureau data released Sept. 12 indicate that more people are gaining coverage through government programs and under a health system reform law provision that offers more private insurance options for younger adults, a situation that presents both opportunities and challenges for physicians.

On the positive side, physicians will be treating more young, healthy patients with private insurance, said Dan Mendelson, CEO and founder of Washington consultant firm Avalere Health LLC. It also means that the physician community “is going to be increasingly engaged with government programs as a payer, for better or worse, for richer or poorer,” he said.

From 2010 — the year the Affordable Care Act was implemented — to 2011, the Census reported an overall decline of 1.3 million in the number of uninsured in the U.S. Much of that decline can be attributed to the uninsured rate for those ages 19 to 25 dropping from 29.8% in 2010 to 27.7% in 2011, said Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities in Washington, during a phone call with reporters.

This suggests that more young adults were getting coverage through their parents’ insurance plans under the ACA, he said, which requires that insurers cover dependent children on their parents’ plans until age 26. A Kaiser Family Foundation and Health Research Educational Trust report issued on Sept. 11 reported similar findings: Nearly 3 million young adults have employer-based coverage in 2012 due to this health system reform provision, an increase from 2.3 million in 2011.

The new influx of insured young adults also appears to be improving overall private coverage rates, which the Census reported as holding steady in 2011 for the first time in a decade of declines, Greenstein said.

Those in the under-26 age category don’t always seek routine care, said Glen Stream, MD, president of the American Academy of Family Physicians, so the increase does not necessarily translate into a rise in office visits by younger patients. But if a serious illness or injury does occur, health insurance can prevent financial hardship for young people, he said.

Gains also were reported for government programs, Medicaid in particular. The portion of those on Medicaid rose from 15.8%, or 48.5 million, in 2010 to 16.5%, or nearly 51 million, in 2011. Medicare during this period gained 2 million beneficiaries, with enrollment rising to 46.9 million in 2011. Overall, the number of those on some type of government program increased from 95.5 million to 99.5 million from 2010 to 2011.

The rise in the insured rate compared favorably with other findings in the Census report. Although the poverty rate remained flat after three years of consecutive increases, median household income declined by 1.5% in 2011.

Several health care organizations in Washington hailed the Census results. “Health coverage is critical to improving health through better access to care, and increased coverage helps ensure that patients receive the right care in the right place at the right time,” said Rich Umbdenstock, president and CEO of the American Hospital Assn.

Ron Pollack, executive director of the Washington health care advocacy group Families USA, said the new data underscored the early benefits of the reform law and the need to move forward with its full implementation in 2014.

Rise in public coverage prompts concerns

Alyene Senger, a research assistant at the Heritage Foundation, a conservative research institute in Washington, saw a growing dependence on public insurance as a discouraging sign, especially the increased enrollment in Medicaid. That program has access problems and low-quality care, Senger wrote in a blog entry, noting that a recent study found that one in three physicians no longer will accept new Medicaid patients.

Some physicians don’t even bother to file Medicaid claims “because it costs more to process the bill than get paid,” said Mendelson, of Avalere Health. A provision in the Affordable Care Act will hike Medicaid primary care payments to Medicare rates for primary care physicians in 2013 and 2014, although that pay bump expires just after major reform coverage provisions kick in.

Physicians, however, are going to have to care about Medicaid as government programs continue to increase their rolls, Mendelson said. “It’s the most rapidly growing insurance program in this country, and I think that physicians have tolerated the low payments because it has not been a major component of their income. But going forward, holding public programs accountable for reasonable payment rates is going to be really important.”

The health system reform law calls for significant expansions to Medicaid starting in 2014, although some Republican governors have said they won’t participate in the expansion. Medicare rolls also will increase over time as baby boomers reach retirement age, Mendelson said.

Historically, the medical community has not been as vocal about Medicaid as it has with Medicare, he said. “They’ll tell you that the payments are pathetic, but you don’t see physicians in the halls of Congress advocating for a stronger Medicaid program.”

Dr. Stream, of the AAFP, said Medicaid’s status as a largely state-based program is the main reason there hasn’t been more national advocacy on Medicaid payment issues. The program is funded through both federal and state channels but is state-based in its administration. For this reason, the AAFP’s national organization doesn’t participate in advocacy at the state level because it wants its state chapters to have autonomy on those issues, he said.

Dr. Stream said his organization’s members tend to focus more on whether patients have coverage, as opposed to what payer they have if they do. “Some payment, even Medicaid, is better than none.”

In the meantime, the AAFP continues to support an extension of the two-year Medicaid pay parity provision for primary care doctors, Dr. Stream said. Family physicians are looking forward to getting paid at Medicare rates for many of their Medicaid services in 2013, but concerns remain about the ability to take on new patients during this temporary pay hike and then maintaining that patient base after the increase goes away, he said.

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Uninsured rate inched down in 2011

In its analysis of health insurance coverage in 2011, the U.S. Census Bureau reported increases in public insurance coverage rates, whereas private coverage rates for the first time in a decade held steady without declining by a statistically significant amount. The result was a slight downtick in the uninsured rate. Some observers said a provision in the Affordable Care Act that allows young adults to stay on their parents’ employer-based coverage until age 26 accounted for the private insurance rates stabilizing. Coverage by percentages:

Type of insurance 2010 2011
Employment-based 55.3% 55.1%
Direct purchase 9.9% 9.8%
Medicare 14.6% 15.2%
Medicaid 15.8% 16.5%
Military 4.2% 4.4%
Uninsured 16.3% 15.7%

Note: Totals do not add up to 100% because a person can be covered by more than one type of insurance.

Source: “Income, Poverty, and Health Insurance Coverage in the United States: 2011,” U.S. Census Bureau, Sept. 12 (link)

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