How do lower-income enrollees use care on ACA marketplaces?

The ACA marketplaces continue to be an important source of health insurance for millions of Americans. Achieving health equity for these enrollees may require more than simply providing coverage.

The number of individuals who selected a Affordable Care Act (ACA) marketplace plan increased from 8 million [PDF] in 2014 to 16 million [PDF] in 2023. Aside from demographic statistics provided by the Department of Health and Human Services, little is known about how marketplace enrollees utilize health care.

In this post, we describe emergency department (ED) and mental health (MH)-related visits rates by “silver plan” enrollees. We focus on these visits because socioeconomic status affects the use of ED visits and MH services in other populations. This association has not been established in the marketplace population.

We find that even when poorer enrollees have reduced cost sharing on the same silver plans, they use fewer MH services and more ED visits. We provide a discussion of the potential reasons behind such disparities, and why achieving health equity on ACA marketplaces may need to go beyond simply providing coverage.

Many ACA marketplace enrollees have lower incomes

ACA marketplace enrollees are diverse, and many have been adversely affected by their socioeconomic status in the past. Marketplace enrollees are financially diverse. Income eligibility to enroll in a plan ranges from below 100% federal poverty level (FPL) to over 400% FPL. For individuals in 2023, 100% FPL is $14,580, while 400% FPL is $58,320.

Marketplace enrollees are also racially and ethnically diverse. In 2022, ASPE estimated that 49% [PDF] of all marketplace enrollees were members of minority groups, including 25.3% Latine, 12.7% Black, and 8.5% Asian American, Native Hawaiian, or Pacific Islander. [Ed. note: these estimates were based on racial/ethnic imputation  for the 33% of enrollees with missing race/ethnicity.]

Because enrollees are diverse and have lower incomes on average, there is an opportunity to understand health inequity on ACA marketplaces. Prior to the ACA, these enrollees were more likely to be uninsured, and therefore had no medical claims. Thus, their health status and care-seeking patterns have been less studied. Lower income is associated with delaying care even with health insurance. We are not aware of prior studies looking at the relationship between income and utilization in this market.

The data, sample, and analysis

We use the External Data Gathering Environment (EDGE) Limited Data Set (LDS) from 2018 for this analysis. The EDGE LDS contains deidentified enrollee-level administrative enrollment and claims data from covered plans in the individual and small group markets under the ACA, from all states and the District of Columbia. We exclude American Indians and Alaskan Natives receiving CSRs and Medicaid enrollees in private or cost-sharing wrap plans on the ACA marketplaces, because the EDGE data does not distinguish these groups.

We focus on the silver enrollees because lower-income enrollees qualify for cost-sharing reductions, but only if they enroll in a silver plan. The lower the household income, the higher the cost-sharing reductions.

The average silver plan has an actuarial value (AV) of roughly 70%, meaning that the plan will cover roughly 70% of the medical bills for an average population. The enrollees would pay the remaining 30%.

The cost-sharing reductions increase the plan AV to:

  • 73% for families with income between 200% and 250% FPL
  • 87% for those between 150% and 200% FPL, and
  • 94% for those between 100% and 150% FPL.

We used the EDGE data on cost-sharing as a proxy for income to examine patterns across income groups.

In this analysis, we first compare disease burden between enrollees who receive cost-sharing reductions and those who do not. We then examine rates of ED visits and MH-related visits by income group.

Disease burden was similar between lower-income and higher-income enrollees

Among the 8 million silver enrollees on ACA marketplaces in 2018, 74% qualify for cost-sharing reductions (Exhibit 1). There are more females than males, and most are between ages 18 and 64. One surprising finding is that except for diabetes, lower-income enrollees do not have drastically different disease prevalence. We expected to find sicker enrollees among the lower-income group because lower income is associated with a range of chronic diseases such as diabetes, cardiovascular diseases, and respiratory disorders. The lack of any discernible higher disease burden implies some amount of underdiagnosis in this sample.

Characteristics of enrollees in individual marketplace silver plans

Enrollees without cost-sharing reductions
(n = 2,124,112)
Enrollees who received cost-sharing reductions
(n = 6,012,154)
Female 52% 57%
Age 18% 6%
Age 18-34 21% 27%
Age 35-49 22% 25%
Age 50-64 36% 38%
Age >64 4% 4%
Condition Categories
Diabetes 5.6% 8.7%
Chronic Lung Disease 5.5% 5.7%
Cancer 2.4% 2.2%
Autoimmune Disorders 1.3% 1.4%
Specified Heart Arrhythmias 1.3% 1.2%
Heart Failure/Replacement 0.9% 1.3%
Seizure Disorders and Convulsions 0.7% 0.8%
Inflammatory Bowel Disease 0.6% 0.5%
Pancreatic Disorders 0.5% 0.5%
Respiratory Failure 0.4% 0.5%
Sepsis 0.3% 0.5%
HIV/AIDS 0.6% 0.3%
Multiple Sclerosis 0.2% 0.2%

The lowest-income enrollees use the most ED visits.

Despite having similar disease burdens, lower-income enrollees have higher rates of ED visits (Exhibit 2). In fact, the lowest-income group (i.e., 100-150% FPL) use the ED twice as much as the highest-income group (>250% FPL). This association has been well documented in other populations. While the lower cost sharing for lower-income enrollees may play some role in the decision to visit the ED, it is not likely the most important factor, as evidenced by the lack of increases in ED visits in states that expanded Medicaid coverage.

There is clear evidence, however, that even when people have insurance, they still have difficulty obtaining timely outpatient care. This is especially true for lower-income people, who often struggle with access to care. Lack of access leads to delayed medical help until their condition worsens. Hospital care is expensive. It is important for policymakers and payers to understand how social factors affect ED use. This knowledge can potentially help lower cost and improve outpatient care for the more disadvantaged groups.

The lowest-income enrollees are potentially underutilizing MH care.

The lowest-income enrollees on ACA marketplaces have the lowest rates of MH-related visits (Exhibit 2). Given that low-income individuals experience poorer MH, and that all marketplace plans have to cover mental and behavioral health services, the observed difference is likely not a coverage issue. Instead, lower use may be a result of non-financial access barriers such as perceived discrimination or lower perceived need.

Indeed, among adults with a positive screening for depression or anxiety, over a quarter did not receive MH counselling. Minority racial/ethnic groups and rural populations are even less likely to receive MH services. Resolving unmet MH needs will require a better understanding of social factors that affect MH services use.

Exhibit 2. Visit rates by % federal poverty level (FPL) among individual market silver plan enrollees

Exhibit 2. Visit rates by % federal poverty level (FPL) among individual market silver plan enrollees

Achieving health equity for ACA marketplace enrollees may require more than simply providing coverage.

In summary, even with lower cost-sharing and similar disease burden, poorer enrollees use more ED and fewer MH services. These results suggest that health care disparities exist on ACA marketplaces. They are important because health care disparity is one metric for measuring progress toward achieving health equity. Our analysis provides a first step in describing what these disparities are.

Indeed, California, Connecticut, Massachusetts, and the District of Columbia have developed strategies to advance health equity on their marketplaces. While their approaches vary, the common lesson learned is that ACA marketplaces need to better understand the people they serve. Policymakers and payers should continue to assess both the social and medical reasons behind health care disparities. This knowledge will be crucial for advancing health equity for enrollees in ACA marketplace plans.

Xinqi Li

Xinqi Li is a Research Economist at RTI International. Her work focuses on Medicare alternative payment models and risk adjustment for the ACA marketplaces.

Xinqi Li

Greg Pope

Gregory C. Pope has more than 25 years of experience in health economics and health policy research. His specialties include management of large-scale projects, payment model design and analysis, quantitative data analysis, statistical analysis, economic analysis, risk adjustment of capitation payments and payment benchmarks, risk transfer algorithms, and beneficiary attribution to health care providers. He has led the development of the Centers for Medicare & Medicaid Services’ Hierarchical Condition Category risk adjustment models for managed care organization capitation payment. He has also directed the evaluation of Medicare’s Preferred Provider Organization and Physician Group Practice demonstrations and is co-developer of the Geographic Practice Cost Index used in Medicare physician payment.

Greg Pope

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