AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 Fact Sheet Characteristics of Americans Ages 50 to 64 in the Nongroup Health Insurance Market Jane Sung and Olivia Dean AARP Public Policy Institute Robert C. Saunders, Julia Sheriff and Aig Unuigbe KNG Health Consulting This fact sheet analyzes characteristics of American adults ages 50 to 64 in the nongroup (or individual) health insurance market as of 2019, prior to enactment of the American Rescue Plan Act of 2021. Background Although the majority of Americans ages 50 to 64 have health insurance coverage through an employer (group coverage) or a public program (such as Medicaid), 5.4 million (or 9 percent) purchase health insurance coverage on their own in the nongroup (or individual) health insurance market.’ The Affordable Care Act (ACA) of 2010 enacted significant improvements to health insurance offered in the nongroup market, including the establishment of health insurance marketplaces, financial assistance to help people afford premiums and cost sharing (e.g., deductibles, coinsurance, and copayments), and consumer protections to improve access to comprehensive coverage. Consumers can purchase nongroup coverage either on the health insurance marketplaces or outside of such marketplaces (often referred to as “offMarketplace’). This fact sheet reports on characteristics of adults ages 50 to 64 in the nongroup market (both on and off the Marketplace) as of 2019, before passage of the American Rescue Plan Act of 2021.’ A companion fact sheet reports on older adult enrollment and coverage trends in the nongroup market. Race and Ethnicity The racial and ethnic makeup in the nongroup market is similar for both younger and older adults. However, there is a larger share of White Non- Hispanics in the older nongroup market relative to the rest of the market. One-third of older adults ages 50 to 64 in the nongroup health insurance market, about 1.8 million people, are Non-White (figure 1). Key Take-aways: Older Adults in the Non- group Health Insurance Market ¢ Older adults in the nongroup market represent a similar racial and ethnic makeup to the rest of the market. ¢ Most older adults in the nongroup market are working and are in good health. ¢ Only a small proportion of older adults with incomes just beyond eligibility for financial assistance were enrolled in nongroup coverage in 2019. ~AARP AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 FIGURE 1 Race and Ethnicity of Nongroup Enrollees by Age Group, 2019 Ages 18-49 0.5% 1.4% @ White, Non-Hispanic ® Hispanic m@ Asian Note: Percentages may not total 100 percent due to rounding. Source: KNG Health Reform Model. This includes an estimated 0.9 million Hispanic (16 percent), 0.4 million Black Non-Hispanic (8 percent), and 0.5 million Asian (9 percent). The remaining two-thirds (66 percent or 3.5 million) of older adults are White Non-Hispanic, compared with 56 percent of all adults aged 18 to 49. However, there is significant variation in the racial and ethnic makeup of the nongroup market across states, with some states having far greater diversity than others (appendix). For example, the older nongroup market in Washington D.C. is over 50 percent Black and 19 percent Hispanic. In Hawaii, 38 percent of the market is Hispanic and 22 percent is Asian. At the same time, eighteen states have older nongroup populations that are over 90 percent white. Employment Status Most older adults with nongroup coverage are in the labor force and are working (69 percent, or 3.6 Ages 50-64 0.7% 0.7% @ Black, Non-Hispanic @ American Indian or Alaskan Native Other million). About 29 percent (1.5 million) are not in the labor force, meaning they do not have a job and are not looking for one (figure 2). The remaining 3 percent (or about 133,000) are unemployed, meaning they do not have a job but are actively looking for work. The vast majority of those not in the labor force, more than 90 percent, report not working because they are either are retired, have a disability/disabilities, or manage the home (homemakers; figure 2). Income Similar to other age groups, the vast majority of older nongroup enrollees, an estimated 89 percent, or 4.8 million older adults, have incomes below 400 percent of the federal poverty level (FPL) threshold.* People at or below 400 percent of FPL could qualify for financial assistance to help pay for premiums (tax credits) under the ACA prior to enactment of the American Rescue Plan Act of AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 FIGURE 2 Employment Status of Nongroup Enrollees Ages 50 to 64, 2019 2.5% m Unemployed gw Not in Labor Force mu Employed Note: Percentages may not add up to 100% due to rounding. Source: KNG Health Reform Model. FIGURE 3 Income Distribution for Nongroup Enrollees Ages 50 to 64, 2019 57.7% 29.9% 9.9% 2.5% a <250% 251-400% 401-500% 501%+ FPL FPL FPL FPL Source: KNG Health Reform Model. 2021. More than half (58 percent, or 3.1 million) of nongroup enrollees ages 50 to 64 have incomes below 250 percent of FPL (figure 3). People at this income level may qualify for financial assistance to help pay for cost-sharing. Nearly a third (1.6 million) have incomes between 250 percent and Given Reason for Not Working among Nongroup Enrollees Ages 50 to 64 Outside Labor Force, 2019 mw Retired mu Disabled m= Homemaker Other FIGURE 4 Nongroup Enrollees Ages 50 to 64 in Good to Excellent Health, 2019 86.8% 81.8% 78.6% Unsubsidized APTC Recipients CSR Enrollees Note: APTC refers to Advance Premium Tax Credit, and CSR refers to cost-sharing reduction. The APTC column includes CSR enrollees. Source: KNG Health Reform Model. 400 percent of FPL. A very small portion of older nongroup enrollees (0.1 million) have incomes just beyond 400 percent of FPL. This is likely because premium assistance under the ACA (in the form of AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 premium tax credits) was not available for people very good, or excellent health. Older nongroup above 400 percent of FPL in 2019. This was known __ enrollees with incomes too high to be eligible for as the “subsidy cliff,” which was addressed by the premium tax credits or cost-sharing reductions in American Rescue Plan Act of 2021 for years 2021 2019 were the healthiest group, with 87 percent and 2022.4 (0.8 million) reporting being in good or better health (figure 4). Those at income levels conferring Health Status eligibility for premium assistance in 2019 (100 The majority—66 percent, or nearly 3.6 million— percent to 400 percent of FPL) were the next of nongroup enrollees ages 50 to 64 are enrolled healthiest (82 percent, or 2.5 million), followed through the Marketplace. Most older Marketplace _ by those at income levels eligible for cost-sharing enrollees (83 percent, or 2.9 million) are in good, reductions (79 percent, or 1.3 million). Appendix Race/Ethnicity of Adults Ages 50 to 64 in Nongroup Market, 2019 Total White Black American Indian Nongroup State Non-Hispanic Non-Hispanic Hispanic Asian orAlaskan Native Enrollment Alabama 67% 23% 8% 3% 0% 74,348 Alaska 68% 1% 17% 14% 0% 6,975 Arizona 70% 2% 15% 11% 1% 84,104 Arkansas 82% 9% 7% 2% 0% 120,171 California 48% 3% 29% 19% 1% 869,020 Colorado 81% 3% 9% 7% 0% 81,236 Connecticut 81% 5% 8% 4% 0% 54,529 Delaware 67% 14% 13% 5% 0% 9,979 District of Columbia 20% 52% 19% 7% 1% 4,383 Florida 47% 8% 31% 12% 1% 741,928 Georgia 51% 27% 15% 6% 0% 150,551 Hawaii 35% 2% 38% 22% 2% 13,347 Idaho 90% 0% 5% 4% 0% 40,815 Illinois 83% 5% 3% 7% 2% 155,748 Indiana 92% 3% 1% 3% 1% 61,615 lowa 96% 1% 1% 1% 1% 43,826 Kansas 93% 1% 2% 3% 1% 40,476 Kentucky 86% 6% 5% 2% 0% 41,088 Louisiana 62% 26% 9% 3% 0% 49,696 Maine 98% 0% 2% 1% 0% 31,831 Maryland 55% 22% 16% 6% 1% 77,541 Massachusetts 84% 3% 5% 4% 0% 133,591 Michigan 91% 4% 1% 3% 1% 142,269 Minnesota 93% 2% 2% 3% 1% 65,920 Mississippi 66% 28% 4% 2% 0% 49,907 Missouri 93% 4% 1% 3% 0% 95,394 AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 Total Srey Black American Indian Nongroup NonHispanic Non-Hispanic Hispanic Asian or Alaskan Native Enrollment Montana 93% 0% 3% 3% 0% 21,204 Nebraska 96% 1% 2% 1% 1% 37,885 Nevada 66% 5% 17% 10% 2% 40,398 New Hampshire 97% 0% 1% 2% 0% 23,770 New Jersey 74% 6% 11% 7h 0% 134,423 New Mexico 49% 1% 26% 21% 2% 25,083 New York 73% 8% 9% 8% 0% 153,196 North Carolina 65% 17% 12% 6% 0% 195,312 North Dakota 94% 0% 1% 3% 2% 15,078 Ohio 92% 4% 1% 2% 1% 112,921 Oklahoma 63% 5% 22% 9% 1% 57,876 Oregon 84% 1% 8% 6% 1% 74,655 Pennsylvania 89% 5% 3% 2% 0% 204,841 Rhode Island 84% 2% 8% 5% 0% 18,851 South Carolina 65% 22% 9% 3% 0% 97,527 South Dakota 94% 1% 1% 4% 1% 19,048 Tennessee 75% 13% 8% 3% 0% 94,637 Texas 38% 8% 36% 15% 1% 409,214 Utah 86% 1% 7% 5% 1% 53,395 Vermont 97% 2% 1% 1% 0% 15,547 Virginia 57% 16% 19% 7% 0% 109,864 Washington 80% 1% 11% 7% 1% 95,203 West Virginia 91% 3% 4% 1% 0% 11,407 Wisconsin 95% 1% 1% 2% 0% 103,766 Wyoming 95% 0% 2% 2% 0% 10,239 The data in this paper rely on the KNG Health Reform Model population file. This file combines many data sources, including the American Community Survey, the National Health Interview Survey, and the Current Population Survey. KNG Health also calibrates the file to be consistent with administrative data from the Centers for Medicare & Medicaid Services. This file allows for many types of integrated estimates that would not be possible with any single data source. However, many of this report’s findings are modeled estimates that may vary from other published resources. 1 2019 data, KNG Health Reform Model. State-level data for the indicators used in Fact Sheet 657, March 2021 this report are included in the Appendix of this paper. © AARP PUBLIC POLICY INSTITUTE 2 The American Rescue Plan Act of 2021 temporarily expands ACA premium tax 601 E Street, NW credits for 2021 and 2022. Washington DC 20049 3 The Federal Poverty Level (FPL) is $12,490 for a one-person household in 2019. Follow us on Twitter @AARPpolicy on facebook.com/AARPpolicy 4 The American Rescue Plan Act was signed into law in March 2021 and temporarily www.aarp.org/ppi eliminated the subsidy cliff by making premium tax credits available to people with incomes above 400 percent of FPL. Enrollees will not have to pay more than 8.5% of their household income for benchmark silver plan premiums. These changes were made for 2021 and 2022. https://doi.org/10.26419/ppi.00099.006 AARP Real Possibilities For more reports from the Public Policy Institute, visit http://www.aarp.org/ppi/.