Small Area Variations and the ACA’s Coverage Expansions

A new Kaiser analysis sheds light on how the country might react to the Affordable Care Act (ACA) when it is implemented.  It looks at how the benefits of the ACA’s coverage expansions will vary around the country by census areas (technically, Public Use Microdata Areas, or PUMAs).  PUMAs are artificial areas of about 100,000 people each created by the Census Bureau to provide more detailed demographic, social and economic information at the local level.  They are generally bigger than zip codes and often overlap with counties, but all fall within state lines.  While people today don’t really know about their PUMAs, next year local agencies will be naming each PUMA. Get ready for the excitement — there will be a PUMA coming to your area soon.

Our analysis illustrates the percentage of the non-elderly population in each PUMA who could benefit personally from the Medicaid expansion or tax credits available through the new state-based insurance exchanges.  We also created a web tool that allows people to put in their zip code and see what percentage of the non-elderly population will benefit in their area (i.e.,PUMA).  A full description of the results and the methodology, including caveats, is available online.

The study of “small area variations” in health care costs and delivery was pioneered years ago by Dr. Jack Wennberg, with whom I worked early in my career.  But there has been less focus on variations in health coverage below the state level.

In fact, there is wide variation in how many people will benefit from the ACA’s coverage expansions… really wide!  It ranges from 2-4% of the non-elderly population who could benefit from coverage expansions in parts of states with broad coverage, such as Massachusetts and New York, to as much as36-40% in parts of Florida, New Mexico, Texas, Louisiana, and California.  PUMAs in the country benefiting the most are parts of the Miami area, areas northwest of Albuquerque, and Fort Worth.  And the PUMAs benefiting the least are all in the Massachusetts suburbs.  Of course,Massachusetts already has its own nearly universal coverage plan.  On average across the country, 17% of the non-elderly population could benefit from the coverage expansions.

Over time, more people will benefit because insurance coverage isdynamic.  People’s employment and economic circumstances change and theywill cycle in and out of eligibility for Medicaid or tax credits.  Andthey will all have family members and friends who will see them receive thesebenefits and presumably value the fact that their relatives and friends havecoverage.

Of course, we have always known that states with the largest uninsured populations will benefit the most from the ACA’s coverage expansions.  The new analysis, however, shows that there will be real variations even within these states.  For example, in the state of California where KFF is headquartered, the share of the non-elderly population who could benefit ranges from 5-36%, mirroring the variation for the country as a whole.  The ranges are large in smaller states, too — from 13-29% in Utah, 5-19% in Wisconsin, and 7-23% in Virginia.

But, there is a flip side to this picture.  The more uninsured people there are in a PUMA, the greater their number that will be subject to the insurance mandate, which is the least popular provision of the ACA and the subject of the Supreme Court case to be heard this spring.

There is also an interesting pattern if you overlay PUMAs with a high percentage of people benefiting from coverage expansions with congressional districts.  Republicans oppose the ACA but there are slightly more high benefit Republican districts than Democratic ones, a subject my colleagues and I address in a separate op-chart published in Politico.

I doubt there will be a direct relationship between high and low benefit PUMAS and how people perceive and respond to the law.  For one thing, the law benefits people in many ways beyond its coverage expansions.  For example,there are its many consumer protections (including provisions guaranteeing coverage regardless of pre-existing conditions), its coverage of preventive services without cost sharing, its coverage of drug costs for seniors who fall in the donut hole, and much more.  On the other side of the coin there are  many provisions of the law that offend its critics that have nothing to do with expanding coverage, most famously the individual mandate.

It may be that there will be no clear public judgment of a law that affects the public so variably and in so many different ways. Many Americans will have a hard time knowing whether a change in their insurance or health care arrangements was made by their provider, their insurer, their state government, or as a result of the ACA.  Our media and horse race driven society tends to expect a thumbs up,thumbs down verdict on everything.  But the ACA may come to be viewed by the public as a collection of parts and pieces; some more successful and popular than others and some less; some easy for people to connect to the ACA and some not; with a varying pattern of impact across the country not only from state to state, but from community to community.

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