AARP Public Policy Institute INSIGHT on the Issues Health Insurance Coverage for 50- to 64-Year-Olds Gerry Smolka, Megan Multack, and Carlos Figueiredo AARP Public Policy Institute Adults age 50 to 64 face rising out-of-pocket costs for health care and declining access to employer-sponsored health coverage. The latest analysis shows nearly one in three adults in this age group live in families that spent at least 10 percent of their after-tax income on health care, compared with 18 percent of adults age 19 to 49. In 2010, more than 58 million U.S. financial health burdens for families.3 adults were in their 50s and early Burdensome costs can affect 60s—approximately 19 percent of decisions about whether to seek care. the population. The aging of the baby ■ boomers will add another 4.5 million More than three-quarters of those to this age group by 2015.1 The rising buying coverage in the private cost of health care has made access individual market spent at least to adequate, affordable health care 10 percent of their disposable family coverage problematic for many in this income on health care. Their average age group. Without sufficient coverage spending on premiums was over two and treatment, they face the prospect of and a half times that of their peers declining health and insufficient care, with employer coverage.4 consequences that will follow many of ■ Medicaid and Medicare provide them into Medicare. important coverage to 13 percent of The Affordable Care Act (ACA) aims this age group,5 but 36 percent of to improve the quality and increase the those with public insurance were in availability and affordability of health families that spent at least 10 percent insurance, especially for those with of their income mainly for health lower incomes and medical conditions. care.6 Its implementation promises to reduce ■ More than 8.9 million adults age the financial and health risks currently faced by millions of adults age 50 to 64. 50 to 64 were uninsured in 2010— 3.7 million more than in 2000. ■ Nearly one in three older adults were in families that spent 10 percent or This Insight on the Issues explores more of after-tax family income health care spending and coverage on health care in 2007, compared issues for the 50 to 64 age group and with 18 percent of adults age 18 to how the ACA may help address some 49.2 Spending 10 percent or more of the challenges they face—challenges of family income on health care is that have only been heightened by the used as measure of the risk of high economic crisis. Health Insurance Coverage for 50- to 64-Year-Olds Health Spending Varies by market was two and a half times more Insurance Status than for those in employer coverage. In 2007, nearly one in three of the 50- Despite the higher cost of coverage in to 64-year-old population spent at least the individual market, benefits tend to be 10 percent of their after-tax income on somewhat less generous than those in the health care services and/or premiums, employer market. a measure of high health cost burden. In comparison, 18 percent of the 19- to Among people with public coverage, 49-year-old population had burdens at such as Medicaid and Medicare, high this level.7 out-of-pocket health spending is more prevalent than among those with private The share of the older adult population coverage through an employer. with out-of-pocket spending amounting to at least 10 percent of their income ■ More than one in three older adults increased by 25 percent between 2001 on public coverage (e.g., Medicare, and 2007. Medicaid, Veterans Administration) The likelihood of high out-of-pocket spent at least 10 percent of their health spending is rising and greatest disposable income on health care among insured older adults without in 2007. The vast majority of this access to employer coverage (table 1). spending was on health services, rather than premiums. ■ Just over one in four older adults ■ The share of the public coverage with employer health coverage had a high out-of-pocket spending group with a high out-of-pocket burden—42 percent more than in burden declined from 40 percent in 2001. 2001 to 36 percent in 2007. ■ More than three-quarters of those ■ Average out-of-pocket spending for buying coverage in the individual health care services dropped 25% market (other private) spent at least among older adults with public 10 percent of their after-tax family coverage between 2005 and 2007. income on health—37 percent more The start of Medicare drug coverage than in 2001. in 2006 and people cutting back on ■ Average out-of-pocket spending on health spending during the economic premiums for adults in the individual recession may help explain this. Table 1 Out-of-Pocket Burdens among Adults Age 50 to 64 Vary by Type of Insurance Coverage, 2007 Health Spending Type of Insurance Adults with High for Premiums and Spending on Coverage Total Family Burden Services Premiums All 30% $3,869 $2,143 Private Employer 28% $4,232 $2,420 Individual Market 78% $8,834 $6,428 Public 36% $1,430 $434 Uninsured 22% $1,752 $233 Source: D. Bernard, Analysis of Medical Expenditure Panel Surveys, unpublished data, Agency for Healthcare Quality Research, 2011. “High burden” is defined as spending 10 percent or more of after-tax family income on health insurance premiums and health care services. 2 Health Insurance Coverage for 50- to 64-Year-Olds Given that disability is the major care for health conditions, which may eligibility criterion for public coverage lead to serious health problems and in this age group, this level of spending higher spending in the future. on services shows that even with public coverage, those in the poorest health are High Health Spending Is More particularly vulnerable to high health Prevalent at Lower Incomes spending. Even before the current economic The uninsured must pay the full cost of downturn, health care costs were any health services that they use. For squeezing the family budgets of a people without health insurance: growing number of poor and low- and ■ Total health spending is less than middle-income older adults. half the average for the age group as ■ a whole. Fifty-four percent of poor older adults spent 10 percent or more of ■ Lower health spending indicates that, their after-tax income on health care on average, the uninsured use less in 2007 (figure 1). health care than their peers. ■ Nearly half of older adults in low- Studies8,9 have shown that uninsured income families also had high health older adults with health problems are spending burdens in 2007. likely to suffer worse health outcomes. ■ Among middle-income older adults, The current low rates of spending for this group suggest that although some the share with high health spending uninsured older adults are healthy and do burdens has risen relatively steadily not need care, others may be deferring since 2001. Figure 1 Share of Adults Age 50 to 64 Who Spend 10 Percent or More of After-Tax Income on Health Care Is Higher with Lower Family Income, 2007 Source: D. Bernard, Analysis of 2006, 2007 Medical Expenditure Panel Survey, unpublished data, Agency for Healthcare Research and Quality; J. Banthin and D. Bernard, Analysis of 2001–2005 Medical Expenditure Panel Survey, unpublished, Agency for Healthcare Research and Quality. The federal poverty level (FPL) was $13,690 for a family of two in 2007 Poor is <100 percent FPL, Low is 100–199 percent FPL, Middle is 200–399 percent FPL, High is ≥400 percent FPL. 3 Health Insurance Coverage for 50- to 64-Year-Olds ■ While high health spending is less qualify for public coverage but may common among high-income older still have high health spending. adults relative to their lower income ■ Individuals under age 65 in fair peers, the prevalence of high health or poor health or with functional costs in this income group has grown limitations have a higher chance of since 2001.10 spending more than 20 percent of their Health Spending, Health disposable income on health services, Coverage, and Financial Security regardless of their coverage status.14 Interact ■ Recent research found that median 51- to 64-year-old uninsured Surveys show that chronic health households with a newly ill member conditions are associated with higher lost between 30 and 50 percent total health costs, and an increased of their household assets, while number of chronic health conditions comparable insured households with increases total health costs.11,12 a newly ill, member did not suffer a ■ decline in wealth.15 Coverage appears More than seven in ten 50- to 64-year-olds report having been to provide some measure of financial diagnosed with one or more chronic protection when illness strikes. health conditions, and nearly half Illness and health insurance coverage can have two or more chronic conditions. be particularly influential determinants of ■ Average total health spending the financial well-being of older adults. for older adults with two chronic Older adults who experience a significant conditions is over one-and-a-half loss in assets due to uncovered medical times that of older adults with only expenses may have limited opportunities one chronic condition ($5,567 vs. to restore their nest egg. $3,569), and more than four times the average total health spending Older Adults Depend Heavily on for an adult with no chronic health Employer Coverage conditions ($5,567 vs. $1,370). ■ Like younger adults, the vast majority of Average total health spending for older older adults rely on employer-sponsored adults with two chronic conditions health insurance (figure 2). However, increased by 10 percent, from $5,066 in 2005 to $5,567 in 2009. Figure 2 Adults Age 50 to 64 Depend Heavily on For older adults with serious health Employer Coverage, 2010 problems, health and economic security may interact. Uninsured 15% ■ 8.9 million Nine percent of uninsured adults age 50 to 64 reported that they were Public not working because of illness or 12% 7.2 million disability—three times the share of Employer 65% Other younger uninsured.13 Private 38.5 million 7% ■ As noted earlier, 36 percent of 4.1 million older adults with public coverage spend more than 10 percent of their after-tax income on health services, Source: AARP Public Policy Institute analysis of March 2011 Current Population Survey. indicating that disabled adults may 4 Health Insurance Coverage for 50- to 64-Year-Olds the share of older adults with employer- ■ Ongoing employment sponsored health insurance declined by ■ Availability of coverage for 5.3 percentage points over the past decade dependents (figure 3). ■ Affordability of coverage for the ■ More than 49 million of the over employee and dependents 58 million Americans age 50 to 64 had health coverage in 2010. Federal and state laws allow many to continue their employer’s health ■ More than one in five, or coverage for certain periods of time 10.6 million, older adults are covered after changes in their work or family as dependents on a family member’s situation. However, it is expensive to employer coverage. keep employer coverage, particularly The loss of employer-sponsored health if the loss of continued eligibility for coverage due to job loss or retirement is employer coverage is accompanied by a problematic for anyone age 50 to 64. reduction in family income. Even though employer-sponsored health One of the ACA’s goals is to ensure coverage is the most common source of access to affordable coverage through health insurance among 50- to 64-year- either the employer or a health benefits olds, access to such coverage is not exchange. Starting January 1, 2014, automatic. Employer health coverage is employers with at least 50 full-time subject to the following factors: employees that do not provide adequate health insurance16 will have to pay ■ Employers’ decisions to offer assessments if their workers receive coverage premium subsidies to buy their own ■ Employee eligibility for health insurance. The assessments will be benefits used to help cover the subsidies. These Figure 3 The Share with Employer-Sponsored Coverage Is Waning and the Share without Health Insurance Is Rising Employer Other Private Public Uninsured 80.0% 70.0% 71% 68% 60.0% 66% 65% 50.0% 40.0% 30.0% 20.0% 15% 15% 13% 13% 10.0% .0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Unit of analysis: people age 50 to 64. Source: AARP Public Policy Analysis of 2001–2011 Current Population Survey. 5 Health Insurance Coverage for 50- to 64-Year-Olds measures could increase the number problems may be discouraged from of older workers and their dependents even applying. who are offered and enroll in employer health benefits. Those still lacking Some states guarantee access to access to health coverage through their coverage through a high-risk pool. employer will have new options for However, premiums in the state high- getting coverage and, depending on their risk pools are commonly one-and-a-half income, may be eligible for subsidies to to two times those in the individual help with the cost of coverage. market, and risk pools in some states are closed because of insufficient funding. Today, Older Adults without Employer Coverage Face High For applicants who are accepted, cost is Cost and Access Barriers in the a particular issue for adults in their 50s Individual Market and early 60s because, in most states, insurers charge higher premiums based Until 2014, when the new health law is operational, the individual market is the on an applicant’s age and health. alternative source of coverage for those ■ Industry data show that average who do not have access to employer individual market premiums for an health coverage. For many, however, it is individual in his or her early 60s are not a realistic option. nearly twice the cost of the average The cost of coverage in the individual premium for all nonelderly people market is borne entirely by the (table 2). In contrast, all individuals individual and his or her family. If an with employer-sponsored coverage employer has been contributing a major paid average annual premiums of share of an individual’s premiums, the $779 and $3,515 for individual and full premium cost can be shocking. For family coverage, respectively, in that matter, compared with employer 2009.18 group benefits, individual market ■ At least one in six of those in poorer health coverage tends to have both less generous benefits (requiring higher health were offered coverage at deductibles, cost sharing, and sometimes premiums higher than those in benefit limits) and higher premiums. table 2, according to the same Consumers shopping for coverage in this industry survey. market may have to make tough choices between health spending and other items Table 2 in the family budget. Average Annual Premiums for Private Health Insurance In addition, currently many individuals in the Individual Market, 2009 cannot buy coverage in the individual market because insurers can turn down Average Premium their application. Individual Family Age Coverage Coverage ■ Between 20 and 29 percent of 50–54 $4,127 $7,331 applicants age 50 to 64 were denied 55–59 $4,895 $8,414 coverage in 2009, a higher share than 60–64 $5,755 $9,252 in 2007.17 The denial rates increase <65 $2,985 $6,228 as people approach age 65. Source: AHIP, “Individual Health Insurance 2009: ■ More people who fear that they A Comprehensive Survey of Premiums, Availability, and Benefits” (October 2009). may not qualify because of health 6 Health Insurance Coverage for 50- to 64-Year-Olds ■ A study found a 14- to 17-fold will no longer be able to turn down increase in premiums for similar applicants or charge higher premiums benefits based on age and health.19 based on their health status or claims experience, nor will they be able to Given the relatively low incomes of exclude preexisting medical conditions older adults buying coverage in this from coverage. The practice of varying market (figure 4), it is not surprising that, premiums by age will continue, but will as noted earlier, more than two-thirds be restricted. Premiums will be limited of those who buy their own coverage in to no more than three times those of the individual market spent more than younger adults. 10 percent of their disposable income on health care. Even before 2014, the ACA created another option for uninsured people Because individuals who buy coverage with medical conditions, the Preexisting in the individual market pay premiums Condition Insurance Program. Premiums from taxable income (unless they are in this program are set at standard self-employed), insurance is even more market rates, making them lower than expensive for them than for those who those in existing state high-risk pools. have employer coverage, where the employee share is commonly paid with By January 1, 2014, residents of every pretax dollars. state must have access to an exchange. The exchanges will provide consumers The ACA makes changes designed to with a new option for purchasing improve access to and affordability qualified health plans. of coverage in the individual market. Starting in 2014, insurers in the Premium and cost-sharing subsidies individual market must accept all will be available to help relieve the cost applicants, including those with burden for individuals and families preexisting medical conditions. Insurers with incomes between 138 percent and Figure 4 Adults Age 50 to 64 without Employer Coverage Tend to Be Poorer Less than 20K 20K-40K 40K-60K More than 60K Individually Purchased 22% 25% 21% 31% Private Coverage Employer- Sponsored 46% 24% 12% 18% Coverage Uninsured 64% 22% 7% 7% Totals may not add up to 100 percent due to rounding. Data are for 2010. Source: AARP Public Policy Institute analysis of March 2011 Current Population Survey. 7 Health Insurance Coverage for 50- to 64-Year-Olds 400 percent of the federal poverty level – A total of 802,000 older adults (FPL) buying coverage in the exchange. who had individual market coverage and incomes below ■ Premium assistance tax credits will 138 percent of FPL in 2010 would be based on a sliding scale up to be eligible to gain Medicaid. – 400 percent of the FPL. In 2011 – A total of 1.7 million older adults terms, individuals with income up who had individual market to $43,560 and families of four with coverage and incomes between an income up to $89,400 would be 138 and 400 percent of FPL in eligible for assistance. 2010 would be eligible to gain ■ Subsidies to help reduce cost sharing subsidized coverage through the will be available to people with insurance exchange. income up to 250 percent of the FPL. Growing Numbers of Older Adults Are without Coverage Implementation of the ACA will increase the availability of public and private Although most 50- to 64-year-olds have health insurance options for older adults health coverage, a growing number of who currently purchase coverage in the this age group is uninsured. individual market. ■ More than 8.9 million, or 15 percent, ■ Up to 59 percent, or 2.5 million, of of 50- to 64-year-olds were the 4.2 million older adults (figure 5) uninsured in 2010. with individual market coverage in ■ The ranks of uninsured older adults 2010 may be eligible for assistance between the age of 50 and 64 have through the exchange or Medicaid increased by 3.7 million since 2000. in 2014 (projections based on Contributing factors are growth in 2010 income).20– the 50- to 64-year-old population, Figure 5 Share of Older Adults without Employer-Sponsored Coverage Who Will Be Eligible in 2014 for Health Coverage Subsidies or Medicaid 100% Ineligible for 19% > 400% FPL 90% 80% Subsidies 138 - 400% FPL 41% 70% <138% FPL 60% 43% 50% Subsidy 40% 40% Eligible 30% 20% Medicaid 38% 10% 19% Eligible 0% Individual Market (4.2 million) Uninsured (8.9 million) Unit of analysis: people age 50 to 64. Note: 133 percent FPL is written into the law. However, 138 percent reflects the new income and asset eligibility requirements, including the standardized 5 percentage point income disregard. As such, 138 percent FPL is a more accurate measure of health coverage subsidy eligibility. Source: AARP Public Policy Analysis of March 2011 Current Population Survey. 8 Health Insurance Coverage for 50- to 64-Year-Olds the rising costs of health care, and New Public Coverage Option the impact of the recent economic ahead for Low-Income Adults downturn. Prior to the ACA, older adults who Older adults with low incomes and racial did not have access to or could not and ethnic minorities are more likely to afford coverage in the private market be uninsured. For low-income uninsured could not rely on public programs as older adults, the cost of buying coverage a backstop. 21 Those without insurance may be prohibitive, as may the out-of- from an employer were more likely to pocket cost of getting needed care. be uninsured than to be covered by a public program or to buy coverage in the ■ Nearly one in two uninsured 50- to individual market. 64-year-olds (49 percent) had a family income below 200 percent of Medicaid, which serves the poor, poverty—this was true of only one traditionally only served those who in five people in the age group as a were also the parent of a minor child, whole. pregnant, disabled, aged, or (in some states) medically needy. Medicare ■ More than two-thirds of the is open to adults under age 65 only 8.9 million uninsured 50- to 64-year- if they are receiving Social Security olds had incomes below $20,000—a disability income benefits. The Veterans much larger share than for those with Administration and other public employer-sponsored or individually programs have their own eligibility purchased private insurance criteria. (figure 4). ■ Beginning in 2014, the ACA will expand One out of three Hispanic and one Medicaid to all non-Medicare-eligible out of five African American older U.S. citizens under age 65 with incomes adults were uninsured in 2010, up to 138 percent of the FPL, regardless compared with over one out of ten of whether they have dependent Caucasian older adults (figure 6). children. This significant public coverage expansion will particularly Figure 6 benefit poor older adults who previously Uninsured Rates in 2010 Were High did not qualify for public coverage among African American and and did not have access to or could not Hispanic Adults Age 50 to 64 afford private insurance. 35 33% Implementation of the ACA will increase 30 the availability of public and private Percent uninsured health insurance options for uninsured 25 20% older adults. 20 ■ Up to 81 percent, or 7.3 million, of 15 12% the 8.9 million uninsured 50-to-64- 10 year-olds in 2010 may be eligible for 5 assistance through the exchange or 0 Medicaid in 2014 (projections based Hispanic Af rican Caucasian on 2010 income; figure 5).22– American – A total of 3.4 million uninsured Source: AARP Public Policy Analysis of March 2011 Current older adults with incomes Population Survey. below 138 percent of FPL in 9 Health Insurance Coverage for 50- to 64-Year-Olds 2010 would be eligible to gain For Older Adults, Being Uninsured Medicaid. – Is Often a Long-Term Problem – A total of 3.9 million uninsured older adults with incomes For most uninsured adults in this age between 138 and 400 percent of group, being uninsured is not a matter of FPL in 2010 would be eligible to having a brief gap in coverage. Analysis gain subsidized coverage through of the 2010 National Health Interview the insurance exchange. Survey24 reveals: Many Uninsured Older Adults ■ Forty-two percent of uninsured 50- Work to 64-year-olds were uninsured for more than three years, while only Roughly three in five uninsured 50- to 10 percent were uninsured for less 64-year-olds are employed. However, than six months. their employment situations suggest that ■ Eighteen percent had never had many work for employers that do not offer coverage, or that they may not be health insurance. eligible for employee health benefits. 23 Being uninsured for such extended ■ Thirty-seven percent work for periods puts these older adults’ health employers with fewer than and financial security in jeopardy.25 25 employees. ■ Twenty-three percent are self- Many Experience Shifts in employed. Coverage with Retirement ■ Twenty-nine percent work part-time As adults reach their late 50s and and/or part of the year. early 60s, the share retiring from the workforce grows. In 2010, 7.3 million Small employers are much less likely adults ages 50 to 64 were retired. to offer health benefits, particularly if their employees are low-wage workers. Research shows that access to coverage As noted above, uninsured older adults can be a factor in the retirement are concentrated at the lower end of the decision.26 Sixty-one percent of older income scale. Those who work part-time workers cited the need to maintain or part of the year may not work enough health insurance as a key factor in their to be eligible for benefits, or may not decision to continue working.27 Data on earn enough to afford the coverage on retiree coverage indicate that: their wage. ■ Retired adults age 50 to 64 are less To improve small employers’ options, likely to have employer-sponsored the ACA also requires the creation coverage than those who are not of exchanges through which eligible retired (55 percent vs. 67 percent; small businesses can purchase qualified table 3). coverage for their employees. These are ■ Retirees from small firms (fewer than referred to as Small Business Health Options Program. In 2014, eligible 200 employees) are markedly less employees will be able to participate. likely than those from large firms To encourage small employers to offer to have the option of retiree health health coverage, the ACA also makes benefits (6 percent vs. 26 percent), tax credits available for certain small according to the Kaiser Family employers. Foundation.28 10 Health Insurance Coverage for 50- to 64-Year-Olds Unplanned early retirement is a heavy Table 3 financial burden for most. Those who Retirement Brings Drops in Employer Coverage, 2010 retire earlier than planned are more likely than those who retire on time or Source of Not later to report that they are concerned Insurance* Retired Retired about their basic finances, including Employer medical expenses.32 55% 67% Coverage: In Own Name 34% 50% To help employers sustain coverage As a Dependent 21% 17% for early retirees, the ACA created the Other Private 11% 6% Early Retiree Reinsurance Program. This Public** 18% 11% temporary program helps employers Uninsured 15% 15% with the cost of providing health Note: Columns may not total 100 percent due to rounding. Unit coverage to retirees over age 55 who are of analysis: people age 50 to 64. not yet eligible for Medicare. * This is the primary source of insurance. Some people may have coverage from multiple sources. For those who lose employer coverage ** Includes Medicare, Medicaid, and Veterans Administration or TriCare coverage. upon retirement, a key concern is getting Source: AARP Public Policy Institute analysis of March access to another source of coverage. 2011 Current Population Survey. Analysis shows the following to be true: ■ ■ Along with the growth of the The percentage of large firms offering retiree health benefits has age group overall, the number of dropped by 21 percent since 2005.29 uninsured early retirees grew from 874,000 to 1,112,240, a 27 percent ■ Compared to workers with employer increase between 2000 and 2010. coverage, more retirees with ■ While more than one in seven employer coverage are covered as (15 percent) early retirees were dependents—either on a working uninsured in 2010, the rate of spouse’s benefits or on a spouse’s uninsurance among early retirees is retiree coverage—than as in their not higher than for their peers who own name (21 percent vs. 17). are not retired. ■ Coverage by public programs While some workers are delaying retirement, others are leaving the increases among early retirees. This workforce and retiring earlier than reflects an increase in the share of intended due to health problems, layoffs, retirees covered by Medicare before or business closures. age 65, and is consistent with the research indicating that disability is ■ The 2011 Retirement Confidence cited as one of the reasons for early Survey (RCS)30 found that the top retirement. three reasons for early retirement ■ Individually purchased private were health problems or disability, insurance also increases among followed by downsizing or business retirees. For some it offsets the loss closures, and finally taking care of a of employer coverage. Even so, spouse or another family member. individually purchased coverage ■ generally costs more and covers less. Nearly half of retirees (45 percent) left the workforce earlier than For early retirees who do not have planned, according to the access to retiree health benefits and may 2011 RCS.31 have difficulty accessing or affording 11 Health Insurance Coverage for 50- to 64-Year-Olds coverage, the implementation of the than younger adults, particularly if they ACA, with the assistance of guarantee obtain health coverage in the private issue, exchange subsidies, and the individual market. Many of those who Medicaid expansion in 2014, will cannot access or afford private coverage provide some relief. and lack eligibility for coverage through ■ public programs will have new options Sixty-eight percent of early retirees in 2014. with individually purchased private health insurance had incomes below Therefore, they have much to gain from 400 percent of FPL in 2010, and, implementation of reforms that address as such, would be eligible to gain access and the cost of health coverage. subsidized coverage through the The ACA is designed to address the exchange or Medicaid in 2014. following problems: ■ Eighty percent of early retirees ■ Access to coverage for those not without health insurance had covered through an employer incomes below 400 percent of FPL in 2010, and as such, would be ■ Cost and access barriers that adults eligible for coverage and sliding- in their 50s and early 60s face in the scale premium subsidies through the private individual market exchange or for Medicaid in 2014. ■ Absence of a backstop for many Discussion who cannot obtain or afford private coverage Older adults are particularly vulnerable It aims to do so by: to deterioration in function and health status if they do not have health ■ Improving market rules that will coverage,33 inevitably increasing their assure everyone access to private need for and use of health care. Research coverage, regardless of age or health shows that uninsured adults in their 50s status and early 60s, particularly those with ■ Creating health benefit exchanges cardiovascular disease and diabetes, experience worse health outcomes and that will provide a new centralized use more services when they enter the point to access good, comprehensive Medicare program than those who were coverage in the individual and small insured.34 So, policies that help the 50- to group markets 64-year-old population maintain health ■ Making premium subsidies available can offset later public costs. to make individual market coverage Older adults share many of the same offered through the exchanges more challenges as younger adults when it affordable for people with incomes comes to accessing coverage and care. up to 400 percent of FPL For older adults, however, the challenges ■ Reducing the cost-sharing liability to financial and health security can be of those under 250 percent of greater and longer lasting. FPL buying coverage through the exchange so that cost-sharing is not a As described above, today those without barrier to getting care access to employer coverage can face real problems getting coverage from ■ Expanding Medicaid to provide a another source. Those with insurance coverage backstop for low-income are likely to spend a significantly higher adults who would otherwise not share of household income on health qualify for public coverage programs 12 Health Insurance Coverage for 50- to 64-Year-Olds In addition, the ACA has many 64 has a real stake in policy solutions promising provisions aimed at increasing that meet their needs and improve their access to care, especially for low-income health and financial security, as well as and sick older adults. Just how well that of their children and grandchildren. the ACA will be able to address these As debates about how to improve our complex issues remains to be seen. health care system proceed, it will be Implementation is in its early stage. important to look at how well it serves Success depends upon the commitment people who are most at risk in our and ongoing collaboration of many current system, including adults age 50 stakeholders. The population age 50 to to 64. 13 Health Insurance Coverage for 50- to 64-Year-Olds Appendix A. Uninsured Population Age 50 to 64, 2008–2010 Pooled Percentage of State Number Age 50–64 Population Alabama 115,295 12.5% Alaska 21,525 17.0% Arizona 214,406 18.2% Arkansas 82,206 15.5% California 1,173,578 20.0% Colorado 117,341 13.1% Connecticut 75,111 10.3% Delaware 17,909 11.0% District of Columbia 10,015 10.3% Florida 734,263 22.1% Georgia 321,680 19.6% Hawaii 19,224 7.8% Idaho 41,431 16.3% Illinois 316,958 14.7% Indiana 142,023 11.8% Iowa 57,541 9.6% Kansas 57,063 11.6% Kentucky 105,016 12.7% Louisiana 130,849 16.5% Maine 30,016 10.2% Maryland 127,177 12.0% Massachusetts 51,087 4.1% Michigan 228,935 12.2% Minnesota 73,370 7.7% Mississippi 89,726 17.3% Missouri 138,157 12.2% Montana 35,527 17.4% Nebraska 33,578 10.1% Nevada 81,338 17.6% New Hampshire 29,408 10.1% New Jersey 219,080 13.6% New Mexico 71,444 19.9% New York 506,137 14.5% North Carolina 264,142 16.1% North Dakota 13,488 11.8% Ohio 284,623 12.8% Oklahoma 112,945 18.5% Oregon 110,362 15.5% Pennsylvania 246,277 10.6% Rhode Island 21,480 10.9% South Carolina 134,998 16.3% South Dakota 18,835 12.9% 14 Health Insurance Coverage for 50- to 64-Year-Olds Percentage of State Number Age 50–64 Population Tennessee 171,627 14.6% Texas 947,394 24.5% Utah 42,716 11.2% Vermont 12,752 8.7% Virginia 180,291 12.5% Washington 151,469 12.0% West Virginia 55,806 13.7% Wisconsin 98,601 9.1% The sum of the uninsured in this appendix does not match the total number of uninsured 50- to 64-year-olds reported in the paper because the latter is based on 2011 data alone and the former is based on pooled 2009–2011 data. Source: AARP Public Policy Institute analysis of 2009–2011 Current Population Survey. Endnotes 1 U.S. Census Bureau, National Population Projections. Table 12 Projections of the Population by Age and Sex for the United States: 2010 to 2050. Release 2008 (based on Census 2000), http://www.census.gov/ population/www/projections/summarytables.html. 2 D. Bernard, Division of Modeling and Simulation, Center for Financing, Access and Costs Trends, Agency for Healthcare Research and Quality, U.S. Department of Health and Human Services, unpublished analysis for AARP of Medical Expenditure Panel Survey, 2007. 3 J. Banthin and D. Bernard, “Changes in Financial Burdens for Health Care: National Estimates for the Population Younger Than 65 Years, 1996 to 2003,” Journal of the American Medical Association, December 13, 2006. 4 Ibid. 5 U.S. Department of Commerce, Census Bureau, Current Population Survey (CPS), data in March 2011. Unless otherwise noted, data in this report come from PPI analysis of 2011 CPS data. 6 Bernard, op cit. 7 Ibid. 8 Institute of Medicine, Committee on the Consequences of Uninsurance, Care Without Coverage: Too Little, Too Late (Washington, DC: National Academies Press, 2002), pp. 82–83. 9 J. M. McWilliams, E. Meara, A. Zaslavsky, and J. Ayanian, “Health of Previously Uninsured Adults After Acquiring Medicare Coverage,” Journal of the American Medical Association, December 26, 2007. 10 Ibid. AARP, “Chronic Care: A Call to Action for Health Reform,” Beyond 50.09 (Washington, DC: 11 AARP Public Policy Institute, 2009). 12 AARP Public Policy Institute analysis of 2009 Medical Expenditure Panel Survey data. 13 AARP Public Policy Institute analysis of 2011 March CPS data. 14 Bernard, op. cit. 15 K. Cook, D. Dranove, and A. Sfekas, “Does Major Illness Cause Financial Catastrophe?” Health Services Research 45(2), April 2010. 16 Employer plans will have to offer minimum essential coverage that covers at least 60 percent of allowed costs under the plan and that is affordable (employee contribution is no more than 9.5 percent of employee’s household income). 17 AHIP Center for Policy and Research, Individual Health Insurance 2009: A Comprehensive Survey of Premiums, Availability, and Benefits (Washington, DC: AHIP. October 2009), http://www.ahipresearch.org/ pdfs/2009IndividualMarketSurveyFinalReport.pdf. 15 Health Insurance Coverage for 50- to 64-Year-Olds 18 Kaiser Family Foundation and Health Research & Educational Trust, Employer Health Benefits: 2009 Annual Survey Washington, DC: Kaiser Family Foundation and Health Research & Educational Trust, September 2009). 19 Research found that a healthy 25-year-old male could buy a $2,500-deductible policy covering prescription drugs and mental health care for $624 per year. For an unhealthy 63-year-old eligible for coverage in the high-risk pool, the cheapest premium for similar benefits (with an $1,800 deductible) was INSIGHT on the Issues $10,800 per year. Source: N. C. Turnbull and N. M. Kane, Insuring the Healthy or Insuring the Sick? The Dilemma of Regulating the Individual Health Insurance Market: Findings from a Study of Seven States (New York, NY: The Commonwealth Fund, February 2005). 20 AARP Public Policy Institute analysis of March 2011CPS data. 21 S. Dorn, Low-income Americans Can’t Get Medicaid: What Can Be Done? (Washington, DC: AARP Public Policy Institute, September 2008). 22 AARP Public Policy Institute analysis of March 2011CPS data. 23 Ibid. Centers for Disease Control and Prevention, National Health Interview Survey (Atlanta, GA: Centers for 24 Disease Control and Prevention, June 2010). 25 Institute of Medicine, op. cit., and Cook et al., op. cit. 26 C. Weller, J. Wenger, and E. Gould, Health Insurance Coverage in Retirement: The Erosion of Retiree Income Security (Washington, DC: Economic Policy Institute, 2004). AARP, Staying Ahead of the Curve 2007: The AARP Work and Career Study (Washington, DC: AARP, 27 October 2008). 28 Kaiser Family Foundation and Health Research & Educational Trust, Employer Health Benefits: 2011 Annual Survey (Washington, DC: Kaiser Family Foundation and Health Research & Educational Trust, September 2011). 29 Kaiser Family Foundation and Health Research & Educational Trust, Ibid. 30 R. Helman, M. Greenwald & Associates, and C. Copeland, J. VanDerhei , Employee Benefit Research Institute, “The 2011 Retirement Confidence Survey: Confidence Drops to Insight on the Issues I59, February, 2012 Record Lows, Reflecting the New Normal.” Issue Brief, 355, March 2011. AARP Public Policy Institute 31 Helman, R., Greenwald M., & Associates, and 601 E Street, NW, Washington, DC 20049 Copeland, C., VanDerhei J., Ibid. www.aarp.org/ppi 32 Ibid. 202-434-3890, ppi@aarp.org 33 © 2012, AARP. Institute of Medicine, op.cit. Reprinting with permission only. 34 McWilliams, et al., op. cit. 16