Health Coverage by Race and Ethnicity: The Potential Impact of the Affordable Care Act

Executive Summary

One of the key goals of the Affordable Care Act (ACA) is to reduce the number of uninsured through a Medicaid expansion and the creation of health insurance exchange marketplaces with advance premium tax credits to help moderate-income individuals pay for this coverage. Given that people of color are at disproportionate risk of being uninsured and having low incomes, the ACA coverage expansions could particularly benefit communities of color and advance efforts to eliminate disparities. This brief provides an overview of health coverage by race and ethnicity today to provide greater insight into the potential impacts of the ACA coverage expansions for people of color. It finds the following:

People of color account for a significant share of the U.S. population today and are projected to make up the majority of the population by 2050. There is significant diversity among communities of color, reflecting varied cultural backgrounds, immigration statuses, and languages. While the majority of people of color have a full-time worker in the family, they are more likely to be in low-income, low-wage jobs that provide limited access to employer-sponsored health insurance.

Reflecting their limited incomes and lack of access to employer-sponsored health insurance, people of color are more likely to be uninsured compared to Whites. State expansions in Medicaid and CHIP eligibility for children offset a significant share of the gap in private coverage between Hispanic, Black, American Indian/Alaska Native, and White children. In contrast, Medicaid eligibility for parents and other adults remains more limited. As such, a smaller share of the gap in private coverage is filled for adults in these groups, leaving them with significantly higher uninsured rates compared to Whites.

The ACA coverage expansions have the potential to significantly increase coverage for people of color and reduce disparities in coverage. Over half of the currently uninsured are people of color, most of whom are adults. The large majority of uninsured individuals have incomes in the range that would qualify for the ACA Medicaid expansion or premium tax credits for exchange coverage.

People of color have particularly high stakes in state decisions to implement the ACA Medicaid expansion. Over half of uninsured Hispanics and nearly two-thirds of uninsured Blacks and American Indians/Alaska Natives have incomes below the Medicaid expansion limit of 138% FPL. If a state does not implement the expansion, most of these individuals will be left without an affordable coverage option and will likely remain uninsured.

In sum, the ACA coverage expansions provide an important opportunity to increase coverage among communities of color and advance efforts to achieve greater equity in health coverage. Moreover, to ensure coverage expansions translate into increased coverage, it will be important to conduct outreach and provide application assistance through trusted organizations and individuals with strong ties to communities of color. Given their higher uninsured rates, people of color will be disproportionately impacted if a state does not implement the Medicaid expansion. Without the Medicaid expansion, many people of color will remain uninsured contributing to ongoing access problems and continuing disparities in coverage.