Health Care Affordability and the Nongroup Health Insurance Market

The Affordable Care Act (ACA) – now over eleven years old – has played a critical role in expanding access to health coverage for older adults ages 50 to 64. As a result of its reforms, fewer older adults in this age group are uninsured and more are enrolled in nongroup (individual) health insurance coverage. However, many older adults in the nongroup market have faced high health care costs and affordability of health coverage has been a growing concern for people in this age group.

To address the problem of affordability and to encourage greater enrollment in health coverage, the American Rescue Plan Act of 2021 included provisions that expand premium assistance for two years. Recent analyses demonstrate the importance of this new law’s provisions to make health coverage more affordable in light of significant affordability challenges facing older adults.

Analyses released by AARP Public Policy Institute includes:

New! State and Federal Affordability Fact Sheets

• 52 state and federal fact sheets analyze enrollment and affordability issues among older nongroup enrollees in the context of expanded premium tax credits in the American Rescue Plan Act.

Insight on the Issues, Affordability Challenges in the Nongroup Health Insurance Market, explores affordability challenges facing 50- to 64- year-olds who rely on the nongroup market using 2019 data, including unaffordable premium and out-of-pocket costs. The paper presents national and state-level data demonstrating the importance of federal actions to improve affordability, such as those included in the American Rescue Plan Act of 2021. The paper also makes policy recommendations to address these affordability challenges.

Key affordability challenges facing older adults ages 50 to 64 identified in the paper include:

• Among older adults not eligible for employer-based or public health coverage, over half remained uninsured in 2019.
• Half of older nongroup enrollees faced unaffordable health coverage in 2019.
• As health costs increase, the share of older nongroup enrollees without subsidies has shrunk.
• Prior to enactment of the American Rescue Plan Act of 2021, the subsidy “cliff” created a significant affordability challenge for many older nongroup enrollees.
• Older nongroup enrollees faced higher premiums and out of pocket costs in 2019 than younger enrollees.
• Unaffordable coverage leads to delaying or forgoing care by older adults, and greater numbers of uninsured.

A Fact Sheet, Characteristics of Americans Ages 50 to 64 in the Nongroup Health Insurance Market, examines the makeup of older adults who purchase coverage on their own.

The fact sheet highlights the following key demographic take-aways:

• Older adults in the nongroup market represent a similar racial and ethnic makeup to the rest of the market.
• Most older adults in the nongroup market are working and are in good health.
• Only a small proportion of older adults with incomes just above eligibility for financial assistance are enrolled in nongroup coverage

The fact sheet highlights the following key enrollment take-aways:

• Older adults rely heavily on the nongroup health insurance market. Nine percent of Americans ages 50 to 64 (5.4 million) are enrolled in the nongroup market.
• Older adults make up a disproportionately high share of this market. The nongroup market is also getting older over time, as the proportion of adults ages 50 and older is growing.
• Because of the ACA, the uninsured rate among older adults has fallen 34 percent since 2013 as coverage has increased in the nongroup market.
• Trends shifted starting in 2017, reflecting market uncertainty and federal policy changes. Since 2017, the uninsured rate among older adults ages 50 to 64 increased slightly and nongroup enrollment decreased.

Previous Reports

• Characteristics of Americans Ages 50 to 64 in the Nongroup Health Insurance Market (2018 data)
• Enrollment and Coverage Trends for Americans Ages 50 to 64 in the Nongroup Health Insurance Market (2018 data)
• How Affordability Challenges in the Nongroup Health Insurance Market Threatens the Health Security of Older adults (2018 data)

Related Materials

• More Affordable Health Coverage Now Available for Pre-Medicare Adults (March 2021) (blog)
• 50 State Fact Sheets: Who Might Be Helped by the ACA Special Enrollment Period (April 2021)
• Infographic: New Tax Credit Expansion Will Make Health Care More Affordable for Older Adults (March 2021) (PDF)
• New Law Can Help Many Lower-Income Pre-Medicare Adults Afford Health Coverage (March 2021) (Blog)
• Technical Appendix (PDF)