Jackson Hammond is a Senior Policy Analyst at Paragon Health Institute. He has been active in the federal and state health policy space since 2017.
Prior to joining Paragon, Jackson was a health care policy analyst for American Action Forum (AAF). While at AAF, his work focused on payer issues including private insurance, Medicare, and Medicare Advantage. Furthermore, Jackson wrote extensively about the 340B Program and contributed to AAF’s research on a variety of drug pricing issues.
Last week, the U.S. Census Bureau released its annual Current Population Survey (CPS) and American Community Survey (ACS), which both examined health insurance coverage in 2023. Between 2022 and 2023, the topline percentage of Americans who are uninsured was roughly unchanged (a 0.1 percentage point uptick in the CPS and a 0.1 percentage point downturn in the ACS). This lack of change is despite the tens of billions of higher spending by the government on marketing and subsidizing Affordable Care Act (ACA) exchange plans. Within that topline rate, however, a lot has changed – the type of coverage people have continues to shift further away from employer coverage, and a suspiciously large amount of people below 100 percent of the poverty line gained coverage in non-Medicaid-expansion states. The relentless pursuit of coverage numbers for publicly subsidized programs like the exchanges or Medicaid has increasingly shifted the cost of health insurance onto taxpayers with little to no improvement in broader coverage and the worsening of overall quality of coverage. Simultaneously, what little coverage gains were made may have been fraudulent exchange enrollment. Let’s take a look at what’s changed (and what hasn’t) in health insurance coverage in America.
Small Topline Changes
As Figure 1 from the CPS and Figure 2 from the ACS demonstrate, there has been very little change from 2022 to 2023 in terms of overall coverage rates. What has changed is that employer-sponsored coverage decreased while Medicaid coverage increased. The CPS and ACS differ, however, on the growth of direct-purchase coverage (which includes even the 100 percent-subsidized exchange plans), with the CPS showing an increase and the ACS showing a non-statistically significant decrease. A quick note for all these figures: Some percentages may not add up to 100 percent due to people reporting multiple sources of coverage.
Stepping back to how things have changed since pre-pandemic, we see a clearer pattern emerge. As the CPS data from Figures 1 and 3 and the ACS data from Figure 4 demonstrate, overall coverage has increased a bit since 2019, but much of the increases in exchange participation and Medicaid coverage have been at the expense of employer-sponsored insurance.
In comparison to all this churn, data from the CPS in Figure 5 shows just how stable the overall uninsurance rate has been since 2017. This is surprising, given that several states have expanded Medicaid and exchange enrollment has increased since 2017.
Exchanging Employers for Subsidies
As the data above show, employer-sponsored coverage has decreased and direct-purchase coverage has increased, mostly due to increased participation in the exchanges. It’s not hard to figure out why: The enhanced premium tax credits (PTCs), created as a “temporary emergency measure” in the American Rescue Plan Act of 2021 and extended by the Inflation Reduction Act through 2025, have created significant incentives for employers to drop coverage and for people to purchase plans through the exchanges. The exchanges are so heavily subsidized that nearly 50 percent of enrollees are enrolled in $0 premium plans. These subsidies have shifted the cost of coverage to taxpayers, and will cost $336 billion more between 2021 and 2030 than CBO projected in 2020 (and that’s assuming the enhanced subsidies expire on schedule at the end of 2025). The coverage shift is also in part due to policy decisions by the Biden Administration that made these subsidies easier to access, namely the “family-glitch fix” which discourages employers from offering dependent coverage, year-round open enrollment periods, and basically non-existent income verification requirements.
Medicaid Enrollment at Historic Highs
Medicaid coverage in 2023 was much higher than pre-pandemic levels, though the redeterminations and removals that happened in 2023 and 2024 have led to a decline in Medicaid enrollment since the spring of 2023. The Medicaid continuous coverage rule contained in the Families First Coronavirus Response Act kept many individuals on Medicaid up through at least April 2023 (when redeterminations began). Both the ACS and CPS are surveys, and undercount Medicaid enrollment given that many Medicaid enrollees were not aware they had Medicaid coverage. Based on the Centers for Medicare and Medicaid Services (CMS) reported Medicaid enrollment from September 2023, around one-quarter of the population (88.5 million people) had Medicaid for coverage – a 6.8 percent increase from 2022. In March 2023, 27 percent of Medicaid enrollees (24.6 million people) were part of the expansion population.
Evidence of Fraudulent Exchange Enrollment
The CPS also had a rather curious finding (albeit unsurprising to us at Paragon): States that have not expanded Medicaid saw a significant decrease in the uninsured rate for individuals under 100 percent of the federal poverty level (FPL), with a 5.3 percentage point drop, while expansion states saw a non-statistically significant 1.7 percentage point increase (see Figure 6). The non-expansion states don’t have Medicaid coverage available for able-bodied adults without dependents, so where could this new coverage be coming from? It is quite likely that this surge is due in part to the large amounts of fraud in the exchanges that Paragon has documented in its recent report The Great Obamacare Enrollment Fraud, with “8.7 million sign-ups report[ing] enrollment between 100 percent and 150 percent FPL compared to only 5.1 million people likely eligible for such coverage, or 1.7 sign-ups for every eligible person” in 2024. The surge shown in this year’s survey will likely be even larger when next year’s report comes out given the spike in exchange enrollment between 2023 and 2024 for people claiming income between 100 and 150 percent FPL and after the Medicaid redeterminations have been completed.
Little Coverage, Lower Quality
Shifting significantly more costs to taxpayers to achieve a tiny increase in coverage is not ordinarily something to celebrate. The Biden Administration, however, has spent the last two years constantly touting increased exchange and Medicaid coverage gains even as those gains are at the expense of employer-sponsored coverage and fraud from their mismanagement of the ACA exchanges. It has traded relatively small overall coverage increases for hundreds of billions of dollars in subsidies on the exchanges alone, rising plan costs, and increasingly poor quality of coverage. Meanwhile, the huge growth in Medicaid coverage has crowded out resources for the disabled, pregnant women, and children while dramatically increasing the taxpayer burden. If policy makers cannot reverse the trend towards greater government-sponsored coverage, we will continue to see the negative effects of higher taxpayer burden, worse quality plans, and reduced access to care, particularly for the most vulnerable.
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