The Affordable Care Act (ACA) proposed expanding health insurance coverage by: 1) requiring states to offer Medicaid to people with incomes up to 138 percent (133 percent plus a 5 percent income disregard) of the federal poverty level (FPL), with most of this expansion funded federally; and 2) offering subsidies to help those with incomes up to 400 percent FPL purchase private insurance through newly created insurance exchanges. The Congressional Budget Office (CBO) estimated in March 2012 that the ACA would newly insure 30-33 million people, leaving 26-27 million uninsured in 2016.

In June 2012, however, the Supreme Court ruled that states may opt-out of Medicaid expansion. Since then, the governors of 14 states have announced their intention to opt-out, 6 are undecided, 3 are leaning against, and 2 toward the expansion. Opt-outs will likely leave several million more uninsured, but little is known about who is likely to remain uninsured under the ACA.

To estimate the number and characteristics of US residents who will remain uninsured in 2016, we analyzed data from the Census Bureau’s 2012 Current Population Survey, a nationally representative survey of the non-institutionalized US population.

Methods. We first categorized states as undeclared, opting in (or leaning toward opting in), or opting out (or leaning toward opting out) of Medicaid expansion. We then examined the projected demographic characteristics of the uninsured population under two scenarios: (1) that all undecided states opt-in and (2) that all undecided states opt-out.

Our projections assume that in opt-out states, 90 percent of currently uninsured people with incomes below 138 percent FPL will remain uninsured, along with 75 percent of uninsured people with incomes above 138 percent FPL. For opt-in states we assume that 40 percent of currently uninsured people with incomes less than 138 percent FPL will remain uninsured, along with 60 percent of uninsured people with incomes above 138 percent FPL. These assumptions are consistent with published take-up rates for public programs, prior publications, and CBO estimates regarding ACA implementation.

Results. We found that if all currently undecided states opt-in, 29.8 million people will remain uninsured, whereas if all opt-out, the number of uninsured will total 31.0 million, 1.2 million above the opt-in scenario.

Exhibit 1 displays the current number of uninsured in each state and the number who will likely remain uninsured under opt-in and opt-out. For states that are opting out, this choice will lead to a decrease in the number of uninsured of only approximately 17 percent, rather than the approximately 50 percent decrease had they opted in.

Exhibit 2 shows the demographic characteristics of the uninsured currently and post-ACA under our best and worst case scenarios. Overall, the ACA will minimally alter the demographic composition of the uninsured, regardless of whether undecided states opt-in or out. While Blacks and Hispanics will continue to be overrepresented among the uninsured, the majority will be non-Hispanic, white, low-income, working-age adults, many of them employed. The majority (around 80 percent) of the uninsured will be US citizens, irrespective of states’ acceptance of Medicaid expansion. More than 4.3 million children and nearly1.0 million veterans will remain uninsured under either scenario.

Implications. The Supreme Court’s decision to allow states to opt-out of Medicaid expansion weakens the ACA’s impact. Because the ACA also reduces funding to safety-net hospitals, states’ refusal to expand Medicaid will likely result in both medical and financial hardship for vulnerable Americans.

Our finding that, following the ACA, only 20 percent of the uninsured will be non-citizens (some of whom reside here legally) runs counter to the common perception that the ACA will cover virtually all legal residents.

The ACA will leave tens of millions uncovered. It will do little to alter racial disparities in coverage. It will also perpetuate disparities in access based on state of residence. The ACA, whatever its merits, will fall well short of its stated goal of providing affordable care for all Americans.

       Exhibit 1. Number of Uninsured Persons by State, pre- and post-ACA
Exhibit 1

Exhibit 2. Demographic characteristics of the United States uninsured population after adoption of the Affordable Care Act
*Actual number of US residents uninsured in 2011. The CBO projects that 56 million would have been uninsured in 2016 absent the ACA.
** figures exclude children and military.

Editor’s note: For more on the coverage and health care spending implications of state decisions regarding the ACA’s Medicaid expansion, see Carter Price and Christine Eibner’s article in the June issue of Health Affairs, released this week.