The Consequences of Insufficient Household Income

educational consequences of untreated mental illness in children and teens are severe. Nationally,
44 percent of youth with mental health problems drop out of school; 50 percent of children in the
child welfare system have mental health problems; and 67 to 70 percent of youth in the juvenile
justice system have a diagnosable mental health disorder (National Alliance on Mental Illness
(NAMI), 2015; Stagman & Cooper, 2010). National research also shows that children in low-income
households and children of color who have special health care needs have higher rates of mental
health problems than their White or higher-income counterparts, yet are less likely to receive mental
health services (VanLandeghem & Brach, 2009).
Strategy 2: Seek Subsidized Insurance Coverage
The most preferable option for ALICE and poverty-level families is to get health insurance coverage through
an employer or, if that is not available, through Medicaid. More than three-quarters of employees say that the
benefits package an employer offers is extremely or very important in their decision to take the job, according
to the 2013 Health and Voluntary Workplace Benefits Survey. Yet most jobs where ALICE works – especially
in the service industry – do not offer health insurance, although there are some exceptions (Taylor, 2015;
Kim, 2014).
Medicaid provides free health care coverage for many households in poverty, and the ACA expanded
Medicaid in 31 states plus Washington, D.C. to households with income below 138 percent of the FPL
(Garfield, Damico, Stephens, & Rouhani, 2015; Healthcare.gov, 2016). However, many low-income families
earn too much to qualify for Medicaid coverage at their state’s eligibility levels.
Medicaid makes a difference for the tens of millions of Americans who are eligible. Initial reports on
the impact of the ACA – including the Medicaid expansion, the implementation of the Health Insurance
Marketplace, and subsidies to cover premiums – show a substantial reduction in the number of uninsured
Americans. Uninsured rates dropped more in Medicaid expansion states (7.8 percentage points) than in
nonexpansion states (6.3 percentage points) from 2013 to 2015 (Kaiser Commission on Medicaid and the
Uninsured, 2012; Garfield, Damico, Stephens, & Rouhani, 2015; Skopec, Kenney, & Zuckerman, 2016).
Consequences
Difficulty finding employer-sponsored health insurance coverage at low-wage jobs: More
than half of nonelderly people (56 percent) were covered by employer-sponsored health insurance
in 2015, down from 67 percent in 1999. However, rates vary greatly by income. In households
earning 100 to 250 percent of the FPL, the percentage of individuals with employer-sponsored health
insurance is 38 percent, falling from 47 percent in 2004; but in households earning over 400 percent
of the FPL, the percentage has remained above 80 percent (Long, Rae, Claxton, & Damico, 2016;
Kaiser Family Foundation, 2015).
Loss of Medicaid’s broader benefits: Workers not eligible for Medicaid use health care less and
also have poorer financial outcomes. Studies such as the Oregon Health Insurance Experiment
have found that having Medicaid coverage increased use of health care services, improved rates
of depression and financial strain, and “virtually eliminated catastrophic out-of-pocket medical
expenditures” (Baicker & Finkelstein, 2014). Preliminary studies show that states that expanded
Medicaid found improvements on several measures including preventative care, care for chronic
conditions, and self-reported health. Because Medicaid does not address the underlying social
determinants of health, however, its ability to create significant improvement in health outcomes may
be limited (Sommers, Blendon, & Orav, October 2016).
UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME
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