Health care costs still push Americans into poverty

The Census Bureau had plenty of good news on Tuesday, including a headline-making 5.2 percent increase in household income, a 1.2 percentage point decline in the number of people living in poverty and a 1.3 percent drop in the number of Americans without health insurance.

“This is the first time in a long time where we’ve had that kind of trifecta in the numbers,” said Arloc Sherman, senior fellow at the Center on Budget and Policy Priorities.

But one number buried in the Census Bureau report goes against the positive trend. It’s the Supplemental Poverty Measure, and it shows that the steep costs of health care continue to push millions of Americans into poverty.   

This additional measure, first reported in 2010 using 2009 data, calculates the poverty rate under different scenarios beyond the official numbers. For example, it adds income from sources such as Social Security and tax credits. At the same time, it subtracts real-life expenses such as work costs and medical bills.

When medical expenses, defined as insurance premiums, co-pays, co-insurance, prescription drug costs and other uncovered medical costs are included, 11.2 million -- or 3.5 percent -- more people are defined as living in poverty in 2015 than the official statistics show.

This number hasn’t changed much since 2009. That consistency likely reflects the effects of the 2008 recession, the steady increase in health care costs, especially pharmaceuticals, and the continuing effort from insurers and employers to push more costs onto patients.  

Is any relief in sight? Tuesday’s Census report said the percentage of Americans with health insurance for at least part of 2015 reached a commanding 90.9 percent. Low-income people -- those making less than $25,000 a year -- had the highest decline in uninsured rates, at 1.7 percentage points, compared to 0.8 percentage points for those making $100,000 or more.

That’s a strong sign that the Affordable Care Act is achieving its main goal of increasing access to coverage, especially among low-income patients, Sherman said.

“What’s complicating the scenario here,” added Matt Broaddus, research analyst with the Center on Budget and Policy Priorities, “is that when you give people access to insurance, especially affordable insurance, you may have people paying more out of pocket for health care than they did before they had coverage.”

Presumably, many of the newly covered may have avoided the health care system entirely when they were uninsured.  

Medicaid has also done its part to increase access to coverage. States that chose to take part in the ACA’s Medicaid expansion program saw a decrease in uninsured rates of 2.4 percent points in 2015, compared to 2.1 percentage points in states that didn’t expand, according to the Census Bureau. 

And as in years past, uninsured rates vary from state to state. Massachusetts leads in having the most insured residents, with an uninsured rate of only 2.8 percent. On the other end of the spectrum, 17.1 percent of Texans remain without health insurance.