Obamacare Delivers Health Insurance to Low-Income Whites

Written by

Algernon Austin
Algernon Austin Dr. Algernon Austin is a Senior Research Fellow at the Center for Global Policy Solutions. Previously, he directed the Economic Policy Institute’s Program on Race, Ethnicity, and the Economy (PREE). As the first director of PREE, Algernon built the program over six years into a nationally-recognized source for expert reports and policy analyses on the economic condition of America’s people of color.

The Affordable Care Act, also known as Obamacare, has reduced racial disparities in health insurance coverage rates between whites and people of color. I and others have discussed the historic increase in health insurance coverage for Latinos, African Americans, and Asian Americans. These findings should not obscure the fact that Obamacare has also led to a historic increase in health insurance coverage for whites and, in particular, for low-income whites.

The decline in the non-Hispanic white uninsured rate under Obamacare from 2013 to 2014 was significantly greater than in the immediately preceding years. Based on American Community Survey data,[i] figure A shows that, in the wake of the Great Recession, from 2008 to 2010, the white uninsured rate rose. As the economy recovered, the uninsured rate fell. The average annual rate of decline from 2010 to 2013 was 0.3 percentage points. After Obamacare, from 2013 to 2014, however, the rate of decline was 2.4 percentage points—eight times the prior rate of decline. Thanks to Obamacare, over 3 million more whites had health insurance than would have otherwise.

White uninsured rates

An important factor in this growth of health insurance coverage for whites was the expansion of Medicaid. States that expanded Medicaid saw a decline in the white uninsured rate of 3 percentage points, but states that did not expand Medicaid only had a decline of 2 percentage points.[ii]

The impact of the Medicaid expansion is easier to see when we look directly at the change in the white uninsured rates of low-income whites in expansion and non-expansion states. In expansion states, the uninsured rate of low-income whites dropped 7.7 percentage points. In non-expansion states, the reduction was only half as large, 3.8 percentage points (Figure B).

White uninsured rates--Medicaid

 

Significant reductions in the uninsured rate for low-income whites occurred even in non-expansion states because of what health policy analysts call the “welcome mat” effect. With the Affordable Care Act came more discussions about health insurance coverage—in newspapers, on TV and among people from all walks of life. Additionally, some uninsured individuals who were eligible for Medicaid may have had friends or family members who obtained health insurance through the health exchanges or through Medicaid in expansion states. All of this additional attention raised public awareness, creating a “welcome mat” that encouraged some people who were already eligible but not enrolled in Medicaid to sign up. Thus, Obamacare boosted Medicaid enrollment even in states that did not expand Medicaid. But, as Figure B illustrates, the increase would have been larger had the states expanded Medicaid.

Recently, Governor John Bel Edwards of Louisiana expanded Medicaid in his state. This action made 300,000 more Louisianians eligible for Medicaid. It is a positive move for Louisianians of all races.


[i]

 The analysis here relies on American Community Survey data, which is better than the Current Population Survey data, for state-level analyses. Because of differences between these two surveys, the findings here will differ somewhat from my report, which is based on Current Population Survey data.

[ii]

 Author’s analysis of American Community Survey data from Steven Ruggles, Katie Genadek, Ronald Goeken, Josiah Grover, and Matthew Sobek. (2015). Integrated Public Use Microdata Series: Version 6.0. [Machine-readable database]. Minneapolis, MN: University of Minnesota.

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