A Closer Look at the Uninsured Population

Transcript

All right, everyone. Well, if you’ve been following along, then you know that today as of publishing, this episode is November 1st, which is the beginning of the open enrollment period for the ACA marketplace. We thought it would be helpful if we share some recent insights gathered by the Kaiser Family Foundation about the market as it stands today.

So they did this survey back in 2021, but the data is very relevant for this upcoming open enrollment. So here’s what they discovered about the uninsured population. So they estimated that there are approximately 12.1 million uninsured potential marketplace shoppers of whom the vast majority, which they say is 10.9 million, are eligible for subsidies under the ACA and the American Rescue Plan to help lower the cost of coverage.

So who are these people? As we go into open enrollment, you gotta go in with a strategy. If you’re gonna have a message, if you’re gonna do marketing, you need to know the kinds of people that need your help so that you can share a message that resonates with them. So what they found is that nationally, there are certain groups that are overrepresented among the uninsured eligible for subsidies. So they found that 30% of the uninsured people eligible for subsidies are actually Hispanic.

They also found that 59% have a high school diploma or less, and they found that 42% are young adults ages 19 to 34.

02:11

So let’s break this down. If there are 10.9 million uninsured people that could purchase marketplace coverage for reduced premium, what does that tell us?

Well, although these subsidies, it may not cover their full premium, it could significantly lower the premium or their out of pocket liability. But even so, there’s still some people that may just say, this is unaffordable or it’s unattractive because of the high deductibles.

So at least 6 million of these uninsured people could get a free marketplace plan with a $0 premium payment after accounting for subsidies. So obviously, the folks in this group would benefit from getting this coverage as opposed to just going without coverage. All right, so keep in mind what I just said there.

You got the 12.1 million uninsured who are eligible for the marketplace. 10.9 of those could get subsidies that significantly lower their costs, and 6 million of those are eligible for just completely zero cost plan. So over half of those uninsured on the marketplace could get a plan at no cost of them.

03:34

So here are some statistics on those people. So of those people who could get the $0 plan, 1.3 million have incomes below 150% of poverty. This would make them eligible for a free benchmark silver plan and substantial cost-sharing reductions that would make their plan almost like a platinum-level coverage.

Some people with incomes just above that 150% of poverty may also qualify for a zero premium silver plan, depending on the price gap. So in addition to that, under the rescue plan, any person who qualified to purchase a marketplace plan and receives unemployment compensation is similarly eligible for this benchmark plant.

So what are the key characteristics of these people we just talked about? Well, again, we es, they estimated that 10.9 million of these uninsured people in the US are eligible for some level of subsidy to help them purchase a marketplace plan.

04:49

So relative to the general population, here are the characteristics of this audience. High school educated, 59% of the subsidy-eligible adults have a high school education or less. Alright? So more than half, they’re not college graduates for whatever reason that may be. That’s just the characteristic, okay?

Young adults. So 42% of these folks that we’re talking about their ages, 19 to 34, 19 to 34. So what does that mean? A lot of these folks probably have children too, and who knows what the current status is of their children. So we want to think about not just the individual coverage, but these are likely, a lot of them going to be family coverage.

Hispanic, 30% of those subsidy-eligible people are Hispanic. That’s a huge chunk. And think about it. Why might that be? Well, if you are from outside of the country or maybe your second generation, whatever your story may be, especially if there is a language barrier going on there, you may just not be informed of the healthcare system in the United States, and therefore you’re just kind of out there.

06:19

And it doesn’t mean you’re not open to someone explaining this to you. You may really, really desire someone to come and bring this information to you, but you just don’t quite know where to turn. So think about the opportunity there, particularly if you are of Hispanic ethnicity or if you speak Spanish. A lot of opportunities there living in rural areas.

So they calculated that 16% of these folks we’re talking about, they live in non-metro areas. Really interesting, and this kind of makes sense because when the marketplace first opened up, a lot of the insurance companies left the market due to profitability concerns.

And so the big ones that stayed had to prioritize based on population density. And so what we have seen is that companies such as Blue Cross, especially here in Texas, they stayed all the way through and that extended out to even rural areas.

07:25

Well, now what you’re seeing is larger carriers, carriers such as United Healthcare, Aetna, Cigna, and others have been coming back into the market in these metropolitan areas, especially here in Texas where we’re located. And you’re also seeing that out in, let’s say, East Texas, for example, where I grew up, you’re seeing health systems themselves, such as Christus Health in East Texas, create plans of their own both on the ACA and on the Medicare Advantage side.

So if you’re out there in the rural areas, or maybe you’re in a metropolitan area, but you are right on those outskirts of it, look for opportunities where maybe people are being overlooked. And I can tell you firsthand that is pretty common.

We focus a lot on the cities, but they’re saying that 16% of these folks that are eligible for a subsidy, they could get affordable healthcare. They just don’t know about it. That’s the opportunity for the broker. Here’s an interesting one, lacking internet access. This one shocked me. So they estimated that 11% of these subsidy-eligible uninsured folks, they do not have internet access at home.

08:49

So what does that mean? That means that for over 10% of the population, no matter what you’re doing online, they’re not gonna hear from you. There’s over 10% of your market that will not see your online stuff. So if you don’t also have grassroots marketing in place, you’re not maximizing the opportunity in the market.

And I would go even further to say that even be, just because someone has internet access does not mean that they’re going to convert on an ACA marketplace ad, especially in communities as we’re speaking of that are kind of, let’s say, lost, overwhelmed, confused, not sure who to trust.

So this is a very, and I’ve heard our president Mike Smith talk about this, that the ACA marketplace is very much a grassroots, and it is, he calls it, it’s a sweat equity business where you’re going into communities.

09:57

And if you can build the right relationships and you can get people in your book, the commissions for you can ramp up very quickly with almost zero acquisition cost. You don’t even really have to run ads for the ACA, but what you do have to do is get plugged into communities and be their trusted expert. And trust takes time.

So don’t expect just instant riches to come your way. Trust takes time. But that’s the marketing strategy for the ACA marketplace, it’s a trust-building exercise. That is certainly the privilege that we have as an FMO, is that we can see out there who are leading agencies are that are top producing, and that is what we find what I just described in the community building long-term relationships. That’s what they do, and it pays dividends for them.

Last little characteristic I wanted to share with you is that according to the estimation, 35% of the ones that are eligible for free bronze and 46% of those eligible for the free silver speak a language other than English at home.

11:19

Wow. So almost half of those folks we mentioned that could get the free silver plan, do not speak English at home. Now, that doesn’t mean they don’t speak English, but at home they speak their native language. This pretty well explains where the gap is coming from.

I mean, it doesn’t take a rocket scientist to view that and say, Oh, wow, clearly these are the people that need my help. That doesn’t mean we overlook all the local folks that work at the restaurants and bars and the salons and everywhere else where they don’t get group healthcare. That doesn’t mean we overlook our current book, but if you’re looking to expand, you’re looking to find those opportunities for growth.

This is where they are. What’s your angle? What’s your way? You’re going to get into those homes? All right. So just a little bit more info here from the Kaiser Family Foundation. And if you wanna look up this article, it’s called a Closer Look at the Uninsured Marketplace eligible Population following the American Rescue Plan. And that’s a long title, but just type that into Google. It’ll pull it right up. All right, so they have some insights here.

12:47

They said, through analysis, we discovered that many people who are eligible for a free bronze plan are also eligible for a low-cost silver plan with a substantially lower deductible due to the cost-sharing reductions. So the average annual deductible for people with incomes between 150 to 200% of poverty who choose to enroll in a silver plan with those reductions is $800. Many people in this group, therefore, could be better off buying a silver plan with a small premium than a zero-premium bronze plan.

Let me tell you, as a broker myself, I have had this exact situation happen. And confession for me is that I just kind of let the client do what he wanted to do, but he was in this exact category. Now, I did educate him. I did inform him of the pros and cons of the choice he was making. That is your job as a broker. But keep note of that, what do they just say? Right? The average deductible, if you’re in that income range with that silver plan and the cost-sharing is $800, remember, that’s on top of the very low premium.

14:14

Some people say, Well, I just want free. I just want free. So they’ll choose the $0 bronze free that they qualify for, but they have a crazy high deductible, They would’ve been better off paying that low premium. And I know for some folks, they don’t get it. They think, Why? I just don’t wanna have to pay some amount of money every single month.

Totally get it. But again, that’s where you as the broker have to educate on the marketplace itself. And you have to explain, Okay, yes, your premium is $20 a month, but it’s actually 980 something, and all of us in the community to help you out, we are paying the rest of that. We’re all helping each other out. So you may think, Oh my gosh, that $20, $30 a month, that’s a lot. Actually, you’re getting this at a crazy discount.

15:13

And then you explain that. So by going with this route and also disclose, disclose, I don’t make any different amount of commission or money or anything by telling you to choose this over this, It’s very important that you make that clear to your prospective clients, I’m your advisor. I get paid by the carrier. You want this great. You want this one? Great. Either way you choose, it doesn’t affect me either way. I just wanna help you find the best situation. Okay?

Very important that you’re clarifying that, because again, if we’re trying to help the folks that are uninsured, they may be uninsured because they are skeptical, they’re confused, or maybe someone’s just never explained this to ’em, maybe they’ve been burned in the past. You can kind of be that shining light. All right?

So they say even so all of the uninsured eligible for a free bronze or free silver would still be better off taking advantage of that $0 premium coverage instead of remaining uninsured.

16:18

And I will say that if you’re in that income bracket, a hundred percent, absolutely, but when you get up to that middle income, I would debate that <laugh> just from personal experience, won’t go into that just had a baby. So that’s kinda where I’m coming from there. But if you are in that lower income bracket, a hundred percent, I think they’re spot on with that analysis.

So they say people in this group may need help understanding the trade-off between silver and bronze coverage, right? Affordability of the premium versus deductible, as well as help understanding the benefits that even a high deductible plan offers instead of being uninsured, such as free preventative care.

Hey, when was the last time you went to the doctor? I don’t know, three, four years ago? You may wanna just get an annual checkup just to make sure nothing’s growing inside of you.

17:15

Might be good to know. So yeah, you can get free preventive care. Oh, I didn’t know that. Yeah, you could. In fact, with this plan, this one’s virtual. So if you want, you could just text your doctor right from your phone. You don’t even have to go anywhere. There are a lot of plans that offer that now. Oh, very cool. I didn’t know that. Yeah, you might wanna take advantage of that.

There’s a limited out-of-pocket liability. Hey, if something happens to you, just know that when you’re on this health plan, they can’t screw you over, right? A limit on what they can bill you. Okay? That’s good to know. And then there are also things like lower negotiated payment rates to providers, and there are at least some benefits before you have to meet the deductible. All right, So last piece of this, Where do these people live?

18:16

We’ve already addressed the fact that there’s a huge percentage that actually lives in rural markets. And a lot of people, again, they overlook that, but what areas of the country do they live in? Well, Kaiser found that almost half of these people we’re talking about who could get a free bronze plant. They live in Texas, Florida, North Carolina, Georgia.

Well, isn’t that interesting? Cuz a lot of our listeners, now, if you’re not in that category, I’m sorry to leave you out, but a lot of our listeners are in Texas, Florida, North Carolina, and Georgia. So just know that if you live in these states, over half the uninsured population that needs your help getting this affordable coverage is right there in your neighborhood.

So don’t you ever claim there’s too much competition, there’s not enough opportunity, yada, yada, yada yada. No, are you finding the right people?

19:25

And that’s the point of this podcast today, because data is so helpful and we’re super grateful for companies or nonprofits like the Kaiser Family Foundation that can give us this data to where we can say, Okay, what’s my action plan gonna be? And that’s how I want to close this.

What is your action plan going to be quickly, if I was to revisit, who are these folks? They’re young adults for the most part, 19 to 34. Okay? Think about what that implies. All right? Think about the income range we’re talking about. What else did we discover? Huge chunk of them are Hispanic and a huge chunk of those do not speak English at home.

20:15

Where can you make an impact? A lot of these folks are in rural markets as well. How is this gonna shape your open enrollment? Keep in mind too, that the subsidies, which were at risk of being dropped, were renewed, I believe, through 2025. Don’t quote me on that, but I believe that was the result in Congress with that whole thing.

So the support for these folks is not stopping any time soon. And if I am doing some calculations, if my average commission at least in Texas, is $25 per member per month, and let’s say the average family, because as this implies, I’m targeting a lot of younger adults, and a lot of these folks are Hispanic. And one thing I love about Hispanic culture is it’s very family driven.

So a lot of these folks probably have families. So let’s say it’s a mom, dad, two kids, three kids, right?

21:27

You’re looking at about a hundred dollars per family per month, let’s say. That’s an average estimation. Do the math real quick. Help one of those families. Give them a great experience. Tell ’em that you can help all of their friends and their families do the math.

Guys, it’s very lucrative and you can feel good about what you’re doing because as opposed to just the AEP strategy, which 10 on the Medicare side, which tends to just revolve around, all right, it’s time to review your coverage and see if you’re happy and possibly switch your plan and compete with a million other Medicare advertisements out there.

This is kind of cool. You get the opportunity to meet people where they’re at and maybe they’re completely uninsured and you can provide this solution for them. And that’s something when you go to bed at night, you can feel good about it and continue to spread that to more folks.

22:30

Remember, the open enrollment is November 1st. It goes all the way through January 15th. And Belynda from the ACA team reminded me the other day that the 150% special enrollment period actually is not going to end. They’re just gonna keep it going. So not only do you have open enrollment, but a lot of these folks that are in this special enrollment period, you can help them year-round. Don’t forget about that.

So again, hope this helps you as you’re building your strategy. It’s go time now. You’re listening to this. Whether you’re listening to this on the first or a few weeks later, it’s time to get after it. But no matter where you’re at, hopefully, this helps you out.

All right, folks, thank you so much for listening. We hope it brought you value that you can apply straight away to your business. And make sure that you tune in next week as we hear from a few different carrier representatives on the ACA side as they discuss their unique advantage in 2023.