Cost-based Underinsurance After the Affordable Care Act

Abstract

Abstract: The Affordable Care Act has significantly reduced the number of uninsured individuals in the U.S., yet millions of insured Americans lack adequate coverage or face substantial health-related financial risks. In this study, we conduct an analysis of a nationally representative sample to generate up-to-date evidence on the association between insurance types and demographic factors and the probability of cost-related underinsurance among continuously insured, lower-income adults in the U.S. We extend the previously established definition of underinsurance by including a measure of subjective financial burden. Our estimates suggest that 33.2% of lower-income individuals in our sample were underinsured, with a fourth of them meeting two or three criteria. We also find that Medicaid beneficiaries were significantly less likely than others to experience underinsurance. Our findings provide evidence that underinsurance is a major concern, and expansion of coverage alone may not suffice to protect individuals from financial risks and cost barriers to health care use.