Despite Record ACA Enrollment, Report Reveals Underinsured Americans Are in Crisis

Despite significant progress in expanding health insurance coverage since the Affordable Care Act (ACA) was enacted, millions still face critical gaps in access and affordability.

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Despite significant progress in expanding health insurance coverage since the Affordable Care Act (ACA) was enacted, millions of Americans still face critical gaps in access to and affordability of health care.¹ In 2023, 8% of Americans—26 million people—remained uninsured, a marked improvement from the 16% uninsured rate before the ACA.

While a record 21 million individuals enrolled in marketplace plans, in 2024, nearly 1 in 4 working-age adults remained underinsured, grappling with high out-of-pocket costs and deductibles that make timely care unattainable. Findings from The Commonwealth Fund published today reveal alarming trends: 57% of underinsured adults avoided necessary medical care due to cost, 2 in 5 reported worsened health as a result, and nearly 30% are burdened with medical debt—half owing $2000 or more.

The ACA brought sweeping reforms, such as protections for preexisting conditions, extending parental coverage to young adults up to age 26, and ensuring gender equity in premiums. Yet in 2024, 9% of adults lacked health insurance, and an additional 12% reported gaps in coverage during the past year. A majority (56%) had continuous, adequate coverage; regardless, nearly a quarter (23%) were underinsured and experienced significant out-of-pocket costs or deductibles.

The Underinsured

The survey defined underinsured individuals as those whose out-of-pocket costs or deductibles represented a substantial share of their income after excluding premiums.

The findings reflect that the prominence of employer-sponsored insurance fails to protect from the growing trend of higher deductibles and cost-sharing in these plans. This year, among insured, working-age Americans, 66% had employer-sponsored plans, 16% were covered by Medicaid or Medicare, and 14% were enrolled in ACA marketplace or individual plans.

Many underinsured adults faced financial barriers to care, with 57% avoiding necessary health services due to cost and 44% carrying medical or dental debt.

Consequences of Cost-Related Barriers

The financial strain of being uninsured or underinsured was exhibited by 41% of adults delaying care due to costs reported worsening health conditions. Nearly 30% of adults with chronic illnesses skipped prescriptions due to expense. Adults without continuous coverage experienced the highest rates of unmet dental and mental health needs.

For many, medical debt compounds these challenges. About 48% of those with debt owed $2000 or more, often stemming from hospital stays or ongoing treatment for chronic conditions. Debt-related stress led a third of affected adults to avoid additional care or prescriptions.

Policy Improvements for Coverage and Affordability

Coverage Expansion

The report called for permanently extending enhanced tax credits. Subsidies have driven record enrollment in ACA marketplaces. Permanent tax credits could stabilize premiums and prevent coverage losses.

Closing the Medicaid coverage gap was also mentioned, as federal options have the opportunity to extend Medicaid-like coverage to 1.5 million uninsured individuals in nonexpansion states. Streamlining continuous coverage would allow policies that extend Medicaid eligibility for 12 months to reduce gaps caused by administrative churn. Implementing autoenrollment would facilitate eligible individuals in Medicaid or marketplace plans and could significantly reduce uninsured rates.

Address Underinsurance and Financial Protections

Lowering deductibles and out-of-pocket costs by adjusting ACA benchmark plans from silver to gold could significantly improve affordability for middle-income households, providing better financial protection. The report stated that employers can also play a role in reducing the burden on low-income workers by scaling premiums and deductibles based on employee wages, ensuring that health care costs are more equitable.

Additionally, strengthening protections against medical debt through federal and state measures—such as prohibiting medical debt from appearing on credit reports and enhancing hospital financial assistance programs—can help address the growing debt crisis and alleviate financial strain on individuals and families.

Leverage Purchasing Power, Consider Public Plans

The report called for public and private payers to address the root cause of high health care costs related to provider and pharmaceutical pricing. With the option of public plan, federal and state policy makers could introduce public insurance solutions to increase competition and reduce costs.

"The relentless growth in the cost of health care, driven primarily by the prices that commercial insurers and employers pay to providers and for pharmaceuticals, is at the root of the nation’s medical debt and affordability crisis in commercial insurance," the authors stated. "Ultimately, private payers will need to do a better job of leveraging their purchasing power to slow cost growth in commercial markets. Federal and state policymakers could help, for example, by creating new public plan options."

Looking Ahead at US Health Care

The US has made significant progress in expanding health insurance access, yet affordability and coverage gaps persist for millions of Americans. The report findings emphasize that strengthening protections under the ACA, addressing high costs, and closing gaps in Medicaid and marketplace coverage are critical steps to achieving a more equitable health care system. Without sustained policy action, the risk of reversing coverage gains looms, threatening many Americans' health and financial security.

Reference

1. Collins SR, Gupta A. The state of health insurance coverage in the US: findings from The Commonwealth Fund 2024 Biennial Health Insurance Survey. The Commonwealth Fund. November 21, 2024. Accessed November 21, 2024. https://www.commonwealthfund.org/publications/surveys/2024/nov/state-health-insurance-coverage-us-2024-biennial-survey