One of the key goals of the Affordable Care Act (ACA) is extending health insurance coverage to those currently uninsured.  Starting in 2014 there will be far fewer uninsured Americans and, in theory, fewer deaths and a healthier population.

There is no argument that individuals with health insurance are better off than those without.  Insured individuals are more likely to use primary care physicians as opposed to relying on the emergency room – a dramatically more expensive strategy.

However, even after the individual mandate takes effect on January 1, 2014, many Americans will still be left uninsured. In the Congressional Budget Office’s 2012 projection regarding the Affordable Care Act, they predicted that by 2016 there would be between 26 and 27 million uninsured.  This prediction was made prior to the Supreme Court decision to allow states to opt out of Medicaid expansion.  A new analysis in the journal Health Affairs predicts that, taking into account the Supreme Court’s decision, the number of uninsured could be as high 31 million.  Their analysis estimates there are currently 48.6 million uninsured.

But who will the uninsured primarily be?

Nearly 57 percent of the estimated uninsured will between the ages 18 and 44.  These are individuals at the healthiest part of their lives.  Some might not buy insurance because of extra cost or because they believe that they do not try to avoid risk, or not risk averse. Those individuals that are highly risk averse will likely have insurance but those who are not risk averse will tend not to have insurance.  Additionally, some insurers and states are expecting premiums to rise, likely further increasing the number of citizens who choose to remain uninsured.

Kaiser has estimated that the average premium (without subsidy) will cost $4,827 for silver plan coverage with a max out of pocket expense of $6,350.  So the max an individual could pay a year is a little over $11,000.  This remains a very large amount of money for an individual to pay for health insurance.  Even among individuals who are eligible to receive subsidies, many may remain uninsured.  It was estimated, by the study in Health Affairs, that among those who earn 100% to 199% of the federal poverty level (FPL), between 8.9 and 9.3 million individuals would remain uninsured; for those who earn 200% to 399% of the FPL there will be between 8.8 and 9 million uninsured.

For those individuals that are not risk averse, it may be in their best interest to not purchase health insurance and instead pay the penalty.  In a recent study by the American Action Forum, they found that 45 percent of individuals currently insured would pay the penalty instead of insuring themselves if premiums increased by 30 percent.  In 2014, the penalty for adults who choose not to purchase insurance will be $95 per adult or 1 percent of income whichever is larger – though it is set to increase in subsequent years (Kaiser Flow Chart).  This is significantly cheaper than the average premium that has been estimated by both Kaiser and other states that have released their projected costs under their healthcare exchanges.

Why does this matter?  The projected cost by the CBO of the ACA is $1.1 Trillion from 2012 to 2021.  Is this added cost worth it, particularly when you consider the already astronomical national debt?  Time will tell the real cost and success of the Affordable Care Act.  Even with insurance it does not guarantee quality and access.  There will be still millions of Americans unable to afford care.  There must be a better way of to control cost and provide a way for all Americans to afford healthcare.  The current system is likely to create some winners and losers.