Why are half of the 5 million uninsured in Texas passing up affordable health coverage?

What’s more surprising: That a record 1.84 million Texans signed up for Obamacare for 2022, or that more than 2 million others got insurance despite qualifying for cost-cutting subsidies?

Texas has over 5 million uninsured residents, far more than any state, and it shouldn’t be. More than half of uninsured Texans are eligible for affordable options on HealthCare.gov, including subsidies that were extended this year and will remain in place until at least 2025.

So what stops people? They usually say they can’t afford health insurance, but the numbers say otherwise.

Most who quote high prices actually qualify for deeply discounted coverage — often from no monthly premiums to as little as $10 a month, one expert said.

“It suggests that price is not really the barrier; it could be the perception of cost,” said Charles Miller, senior policy adviser at Texas 2036, a nonpartisan think tank that studies some of the state’s biggest challenges.

Historically, the biggest barrier to covering more people has been cost. Monthly premiums, annual deductibles and medical co-pays can easily run into the thousands of dollars a year.

The Affordable Care Act, which took effect in 2014, was designed to counter the cost problem with income-based subsidies. Yet two-thirds of uninsured working-age adults in the U.S. said they hadn’t even shopped for plans on HealthCare.gov, according to a 2018 study by the Commonwealth Fund.

During the pandemic, those grants became larger and enrollment rose across the country, with Texas leading the growth. In 2022, 94% of Texans enrolled in an exchange plan received premium subsidies, and more than 60% received help with deductibles and copayments.

For those receiving a subsidy, the average premium is $60 a month, and nearly four in 10 Texas customers pay $10 or less after tax credits.

Since the summer, Texas 2036 has been surveying uninsured residents and holding virtual focus groups, trying to understand why many eligible for subsidies aren’t signing up. Several people said they went to HealthCare.gov, entered income and family information and got offers for health plans for about $300 a month.

But the subsidies were supposed to cover all or nearly all of the monthly premiums in those particular cases, Miller said.

“There was a disconnect between what we would expect and what people are experiencing,” Miller said. “Which is different from having a vague feeling that it’s expensive and not even trying it.”

Most uninsured in Texas can be divided into four categories.

More than 2 million are already eligible for subsidies on the exchange but haven’t enrolled, according to the Kaiser Family Foundation. This is the largest goal to reduce the uninsured rate in Texas, which is the highest in the nation.

An estimated 635,000 other Texans were stranded by the so-called “family issue.” This happens when the breadwinner gets coverage from work but can’t afford to add a spouse and children, and those family members aren’t eligible for subsidies.

A rule change this month will allow family members to apply for separate subsidized open enrollment plans for 2023, which runs from Nov. 1 to Jan. 15.

“When you think about our 5 million uninsured, realize that a whole bunch of them are already eligible for some kind of affordable coverage,” said Stacey Pogue, senior policy analyst at Every Texan, an advocacy group in Austin.

About 662,000 — mostly children — are eligible for Medicaid, Kaiser said. But they must be registered and working after the COVID emergency ends to remain on the state’s Medicaid rolls.

Texas could significantly reduce the number of uninsured by expanding Medicaid to working poor adults, a key part of the Affordable Care Act. That would cover about 771,000. But Republican lawmakers have raised concerns about the long-term costs, and Texas remains among 12 states not accepting the Medicaid expansion.

There is another large group of the uninsured: the estimated 733,000 undocumented immigrants who are barred from buying a plan on HealthCare.gov, even without financial assistance.

Many people assume that these immigrants are the cause of the high uninsured rate in Texas. They account for 14% of the uninsured in Texas, similar to the national share of 13%.

“This is one of the biggest myths I hear: that undocumented immigrants lead to the worst uninsured rate in Texas,” Pogue said. “That’s not true. You could take away all undocumented immigrants and Texas would still be the leader in uninsured.”

Too many Texans believe they don’t qualify for HealthCare.gov plans or are ineligible for financial assistance. In Texas 2036 surveys, 70% of the uninsured said they didn’t know if they could get subsidies. The most commonly cited reasons for not receiving coverage are related to work, lack of company insurance, or ineligibility for subsidies.

But exchange plans are designed for people who don’t have insurance through an employer. And 94 percent of Texans are eligible for subsidies this year.

“There’s still a big lack of clarity in terms of how to think about subsidies and who qualifies,” said Lisa Loff, president of Cigna’s individual and family plans, which has offers for the Dallas area on HealthCare.gov for 2023 d. “There is a large part [of the population] they only sit because of lack of understanding and do not realize what is on the table and available to them.

Chris Gay, CEO and co-founder of Evry Health, a Dallas insurance startup, shares a similar view. In our current system, he said, there are two main levers to increase enrollment: using subsidies as incentives and communicating those benefits to potential customers.

“At this point, it’s really more of a communication challenge than a subsidy challenge,” Gay said.

Lowe urges people to seek help from brokers, insurance agents and navigators certified to help applicants. Over time, people will understand more about how insurance works and the trade-offs in premiums, co-pays and networks.

But enrolling in the health exchange is a complicated process. Pogue of Every Texan said applicants must answer questions about income, how many family members work and whether taxes are filed jointly.

“There’s no nice simple answer to tell everybody if they’re eligible,” Pogue said. “It doesn’t have to be that hard.”

She pointed to another government health program that is well understood and widely accepted in America: “Most people know when they are eligible for Medicare,” she said. “You turn 65 – so you get Medicare.”

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