Why Are Americans Opting Out of Insurance Coverage?

Dollar symbol balances medical symbol on scales.

Why are Americans skipping health insurance?

Although more people have health insurance than they did before the Affordable Care Act (ACA), growing numbers of individuals under the age of 65 are opting to go without insurance. There are two reasons:

  1. High costs
  2. Shrinking networks

According to Kaiser Family Foundation, record increases of people have health insurance coverage since ACA was enacted, brining Medicaid coverage to low-income people and Marketplace subsidies for individuals below 400% of the poverty level.

While coverage rates increased with the ACA, approximately 27.5 million under 65 went without coverage in 2016.  A Gallup poll indicates that a slightly increased percentage of adults without health insurance has occurred since 2016.

Health Care Costs More

The cost of health coverage is more than many families can afford. The average non-employer based costs for a family of four is more than $1,500 per month while per-person deductibles can be over $5,000. With the recent elimination by Congress of the ACA mandate that everyone must be insured or pay a penalty, those costs are expected to go even higher.

To save money on premiums, some may choose plans with higher deductibles. Even with health insurance coverage, they feel they can’t afford tests, treatment or prescriptions so they simply choose to not get the care they need.

According to a survey conducted by the West Health Institute and ORC at the University of Chicago, about a third and a half of people age 45 to 59 and a quarter 60 years or more went without care in 2017 to avoid the expense. Yet 80% of survey participants had health insurance.

A big part of the spike in costs relates to providers having to cover more ill people while many in the healthier population have chosen to not buy coverage, even if they had to pay a penalty in the past.

Medical Networks Are Shrinking

Health insurance providers who leave the Marketplace do so because they are losing money. They must now insure pre-existing conditions. They are covering more people who require more care and must follow ACA guidelines that don’t allow them to charge higher premiums to sicker people or those who are likely to get sick.

Some major insurance providers are choosing to leave ACA exchanges, and people in some states are paying the price with fewer coverage choices. Providers may sometimes drop hospitals or medical groups from their networks because they can’t renegotiate a more favorable agreement.

Shrinking networks can leave rural populations with insurance that doesn’t cover their medical group or the closest hospital.

The Options

People who have no health insurance coverage risk going bankrupt or owing huge medical bills for an extended period of time, should a major health event occur. The most vulnerable person in a family may get coverage while the rest forgo it.

Some piece together alternatives like temporary health insurance, membership with doctors’ groups or membership pools that use all members’ monthly fees to help pay medical costs. Even added up together, monthly fees often cost less than what a full coverage premium would be.

Yet people say they would prefer having health insurance. Health care is in flux, and the hope is that all will eventually settle down into a system that is good for everyone.

Learn more about different kinds of health insurance and compare rates on Einsurance.com.