Insurance Technology Featured Article

Health Insurers Marketing to Poorer, Less Educated as Insurance Expands

October 03, 2012

While in the past, many people choosing health insurance considered doctors in the network and the coverage offered before picking their policies, today – after healthcare reform – more are making that decision based on price.

According to a story by Reuters (News - Alert), this will happen because in many cases, health insurers will now be offering policies to individuals “less educated and poorer than their current policyholders,” PwC Health Industries reported Tuesday.

In terms of education, PwC said it expected 14 percent of the newly insured to hold a bachelor's degree or higher, compared to 37 percent of the currently insured.

As a result of the Patient Protection and Affordable Care Act (ACA), 30 million Americans will now become insured through regulated exchanges in each state – called health insurance exchanges – more plans from employers, and Medicaid’s expansion.

Of the people expected to become insured over the next decade, about 45 percent will buy health coverage through these state exchanges, PwC said. But currently, only a handful of states have public health exchanges. Those states are Washington, Oregon, California, Nevada, Utah, Colorado, Kentucky, West Virginia, New York, Vermont, Connecticut, Rhode Island, Massachusetts and Hawaii. 

One-third will be covered by Medicaid, and the remaining 25 percent by employers.

Of the states choosing not to accept federal funds for setting up healthcare exchanges, the government will do it for them in 2014.

"What we've seen with this group, which is a little bit less educated with lower incomes, is that most of their decisions are going to be driven based on price initially," Vaughn Kauffman, a principal with PwC Health Industries, told Reuters.

Though the ACA requires that each state set up a way to cover all uninsured residents, one-third will do it through an expansion of Medicaid – which the federal government will finance. But in an interesting twist, the Supreme Court decision upholding the ACA did not make it mandatory that all states expand the health program for the poor, and some states, like Georgia, are indeed refusing.

Governor Nathan Deal said his state just cannot afford it.

The U.S. Census Bureau revealed in September that the number of people living in poverty is not growing quite as fast as previous years, but in 2011, 6.6 percent of the U.S. population was living below 50 percent of the poverty threshold. Another 35.1 percent of Americans were living at or above 400 percent. 

Sadly, many of those in this difficult situation are children.

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Edited by Braden Becker

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