In U.S., Uninsured Rate Sinks to 12.9%

WASHINGTON, D.C. -- The uninsured rate among U.S. adults for the fourth quarter of 2014 averaged 12.9%. This is down slightly from 13.4% in the third quarter of 2014 and down significantly from 17.1% a year ago. The uninsured rate has dropped 4.2 percentage points since the Affordable Care Act's requirement for Americans to have health insurance went into effect one year ago.

The uninsured rate declined sharply in the first and second quarters last year as more Americans signed up for health insurance through federal and state exchanges. After the open enrollment period closed in mid-April, the rate leveled off at around 13%. The 12.9% who lacked health insurance in the fourth quarter is the lowest Gallup and Healthways have recorded since beginning to track the measure daily in 2008. The 2015 open enrollment period began in the fourth quarter on Nov. 15 and will close on Feb. 15.

The fourth-quarter results are based on more than 43,000 interviews with U.S. adults from Oct. 1 to Dec. 30, 2014, as part of the Gallup-Healthways Well-Being Index. Gallup and Healthways ask 500 U.S. adults each day whether they have health insurance, allowing for precise and ongoing measurement of the percentage of Americans who lack health insurance.

Uninsured Rate Drops Most Among Blacks, Low-Income

While the uninsured rate has declined across nearly all key demographic groups since the Affordable Care Act went into effect a year ago, it has plunged most among blacks and lower-income Americans. The uninsured rate among blacks dropped seven points over the past year, while the rate among Americans earning less than $36,000 in annual household income dropped 6.9 points.

The Hispanic population remains a key target of the healthcare law's marketing efforts, as it continues to be the subgroup with the highest uninsured rate, at 32.4%. Still, the percentage of uninsured Hispanics is down 6.3 points since the end of 2013.

Across age groups, the uninsured rate dropped the most among 18- to 25-year-olds, falling 6.1 points from a year ago. The rate fell 5.6 points for 26- to 34-year-olds, and 5.2 points for 35- to 64-year-olds. The percentage of uninsured Americans aged 65 and older has not changed over the past year, likely because most were already covered through Medicare.

Two in Five Americans Under 65 Have Employer-Based Coverage

The uninsured rate among 18- to- 64-year-olds dropped to 15.5% from 20.8% a year ago, with most of the dip reflecting Americans gaining coverage through self-funded plans, Medicaid and Medicare. Those aged 65 and older are excluded from this analysis of health insurance type because most are covered through Medicare.

The 20.6% of U.S. adults under the age of 65 who say they are covered by a self-funded plan is up three points since the fourth quarter of 2013. This is likely because more Americans purchased individual plans through a federal or state health insurance exchange.

The percentage of 18- to 64-year-olds with Medicaid (8.6%) has also increased slightly over the past year, which is not surprising because many states expanded Medicaid eligibility so that more lower-income and lower-middle-income Americans could get affordable insurance. There was also a slight increase over the past year in the percentage of those under 65 with Medicare insurance.

The percentage who get their insurance through a current or former employer declined in the first quarter of 2014, but recovered throughout the year.

Implications

The Affordable Care Act has accomplished one of its goals: increasing the percentage of Americans who have health insurance coverage. The uninsured rate as measured by Gallup has dropped 4.2 points since the requirement to have health insurance or pay a fine went into effect. It will likely drop further as plans purchased during the current open enrollment period take effect. The Department of Health and Human Services reported that 6.5 million Americans either selected new plans or were automatically re-enrolled into a plan via HealthCare.gov as of Dec. 26, 2014. Prior to this year's open enrollment period, Gallup found that more than half of those who were uninsured planned to sign up, a positive sign. Gallup also found that most newly insured Americans planned to renew their policy or get a different policy elsewhere.

Furthermore, the uninsured rate may drop because the healthcare law's provision requiring businesses with 100 or more employees to provide health insurance to 70% of their workers took effect on Jan. 1. In 2016, companies with 50 or more employees will be required to provide health insurance to 95% of their workers.

Other signs also point to the uninsured rate falling more after this open enrollment period ends. HHS continues to focus on the financial assistance available to enrollees and increasing the fine for not having health insurance: currently $325 per person or 2% of an individual's yearly household income, whichever is greater. Gallup previously found that higher fines would compel more uninsured Americans to sign up.

The uninsured rate could also fall further as more states expand Medicaid. Twenty-seven states and the District of Columbia implemented Medicaid expansion through the Affordable Care Act in 2014, which Gallup found to be a major factor in declining uninsured rates. Pennsylvania expanded Medicaid as of Jan. 1, and Arkansas, Iowa and Michigan approved Section 1115 waivers for expansion, giving the secretary of HHS authority to approve experimental, pilot or demonstration projects that promote the objectives of Medicaid and the Children's Health Insurance Program.

However, closing the health insurance gap may be more challenging this year than last, as those who did not sign up last year may be harder to reach or more reluctant to get health insurance. Additionally, the open enrollment period will be nearly two months shorter in 2015 than in 2014.

Survey Methods

Results are based on telephone interviews conducted Oct. 1-Dec. 30, 2014, as part of the Gallup-Healthways Well-Being Index survey, with a random sample of 43,016 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. For results based on the total sample of national adults, the margin of sampling error is ±1 percentage point at the 95% confidence level.

Each sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by time zone within region. Landline and cellular telephone numbers are selected using random-digit-dial methods.

Learn more about how the Gallup-Healthways Well-Being Index works.