Fall 2000; Volume 1, Number 1
The Uninsured in the U.S.: An Issue Brief
Colleen Barry and Julie Donohue
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Despite strong economic performance in recent years, the proportion of people lacking health insurance coverage in the U.S. continues to grow. Since the failure of President Clinton's effort to enact comprehensive national health reform, the number of non-elderly uninsured Americans increased from 39.4 in 1994 to 43.9 million in 1998, according to the most recent Current Population Survey data (EBRI, 2000). This issue brief summarizes the current research on the numbers of uninsured, the characteristics of people without insurance, and the impact insurance has on access to health care. In addition, this paper points to some of the trends with regard to employment-based health insurance, publicly financed health coverage, and the network of providers that makes up the "safety net" for people without health insurance.
How many people are uninsured in the U.S.?
An estimated 18 percent of the non-elderly population lacked health insurance coverage in 1998 (EBRI, 2000). Given the importance of health insurance in gaining access to care, the problem of the uninsured presents a significant challenge to improving the health of Americans (Ayanian, et al., 1993; Ford et al., 1998; Newacheck, et al., 1998). In addition to the millions of Americans lacking insurance altogether, a growing number are "underinsured." Although one of the primary functions of health insurance is to protect people from the financial risk of catastrophic illness, a recent survey conducted jointly by the News Hour with Jim Lehrer and the Kaiser Family Foundation reports that 18 percent of those with insurance indicate having problems paying medical bills (Hoffman and Schlobohm, 2000).
Who are the uninsured?
Since 97 percent of Americans over the age of 65 receive health care through the Medicare program, lack of health insurance is primarily a problem for the non-elderly. Five major characteristics differentiate people lacking insurance: family income, employment status, age, race, and geographic region of residence.1
Insurance coverage rates are positively associated with family income. The percentage of people lacking health insurance ranged from 8.3 percent among households with incomes of $75,000 or above to 25.2 percent among households with incomes below $25,000 (Campbell, 1999).
Employment status and firm size 2
Full-time workers and workers employed by large firms are more likely to be insured than those employed on a part-time basis or working for a smaller firm. Among individuals 18 to 64 years old, 16.9 percent of full-time workers and 23.2 percent of part-time workers were not covered by health insurance in 1998 (Campbell, 1999). However, full-time employment far from guarantees insurance coverage as evidenced by the fact that three-quarters of the uninsured are full-time workers or their dependents. For the working uninsured, the size of the employer is a significant factor in determining whether a worker has health insurance. Only 29.3 percent of workers in firms with less than 25 employees were covered by their own employment-based insurance in 1998. In comparison, 89 percent of workers in firms with 500 or more employees were covered.
Non-elderly adults are more likely than children to be uninsured. Twenty-one percent of non-elderly adult males and 18 percent of non-elderly adult females were uninsured, while 16 percent of all children under 18 were uninsured in 1998. However, among children below the federal poverty level, 27 percent were uninsured, and 24 percent of children between 100 and 200 percent of the poverty level were uninsured.
Non-white Americans are at a higher risk of being uninsured. Thirty-seven percent of Hispanics, 24 percent of Native Americans, 24 percent of blacks (non-Hispanic), and 22 percent of Asian/South Pacific Islanders are uninsured. In comparison, only 14 percent of whites (non-Hispanic) are uninsured. The Kaiser Commission analysis notes that differences in insurance rates across racial and ethnic groups are only partially explained by disparities in income.
The proportion of uninsured varies widely across the states. Uninsurance rates, on average, ranged from 8.7 percent in Hawaii to 24.4 percent in Texas from 1996 through 1998 (Campbell, 1999). This variation results from differences in the types of jobs available, the state-level eligibility requirements for cash assistance programs, and the availability of individual and small group insurance options (Swartz, 1998).
Access to care and health outcomes among the uninsured
Health insurance coverage affects both access to care and health outcomes. The uninsured are more likely to postpone or forego needed medical care than those with insurance (Hoffman and Schlobohm, 2000). For instance the Kaiser Commission on Medicaid and the Uninsured notes that uninsured children are at least 70 percent more likely than insured children not to receive medical care for problems such as ear infections, sore throats, and asthma. Likewise, uninsured adults are more than 30 percent less likely to have had routine medical care in the past year (Hoffman and Schlobohm, 2000). Diminished access to preventive care and delays in seeking acute care can sometimes lead to otherwise avoidable hospitalizations. The uninsured are significantly more likely than insured patients to be hospitalized for avoidable hospital conditions such as asthma (Weissman, Gatsonis and Epstein, 1992). Health outcomes vary significantly by insurance status. For instance, evidence suggests that the uninsured have a significantly higher risk of mortality at the time of admission to the hospital than those with insurance (Hadley, Steinberg and Feder, 1991). Higher risk among the uninsured has also been found for specific conditions. Ayanian et al. (1993) reported that risk of death for women with breast cancer was 49 percent higher for the uninsured after controlling for age, income and other factors. Lack of insurance has also been found to be associated with a higher risk of adverse birth outcomes (Braveman et al., 1989) and cardiovascular disease (Ford et al., 1998).
Trends in employment-based coverage
The proportion of the non-elderly population in the U.S. receiving employment-based health insurance coverage dropped from 69.2 percent in 1987 to 64.2 percent in 1997 (Fronstin, 1999). This decline is mainly due to fewer workers taking up coverage offered by employers rather than employers not offering health insurance (Cooper and Schone, 1997). The reduction in employment-based coverage can be partially accounted for by the fact that per capita health care spending has risen much more rapidly than personal income over the past two decades (Kronick and Gilmer, 1999). In order to compensate for these cost increases, some employers have increased the cost sharing requirements of employees over this period. Employees assumed 27 percent of the cost of monthly premiums in 1998, compared with 20 percent in 1988, and this increased cost sharing has led some employees to refuse coverage offered by their employer (Gabel, 1999). In fact, workers cite the high cost of insurance most often as the primary factor for refusing coverage (Thorpe and Florence, 1999). Other factors frequently cited for the decline in employment-based coverage include fewer employers offering health insurance, a trend toward part-time and temporary employment, small business job growth, a decline in union participation, and the movement of workers across industry sectors. However, each of these factors account for only a small proportion of the decline in coverage.(Kronick and Gilmer, 1999).
Trends in publicly financed health care coverage
The problem of the uninsured has been addressed in part by expansions of coverage through the Medicaid program. According to the Health Care Financing Administration (HCFA), the proportion of Americans enrolled in Medicaid increased from 8.6 percent in 1987 to 14 percent in 1996 largely as a result of program expansions that took place in the 1980s and early 1990s. More recent data from the U.S. Census Bureau, however, shows that Medicaid enrollment has begun to decline Ð by 2.5 million in 1997 and 1.1 million in 1998 (Campbell, 1999). These declines are attributed primarily to state and federal reforms of the welfare program and an improved economy with lower rates of unemployment (Ku and Garrett, 2000).3 Federal and state governments have recently attempted to expand coverage to uninsured children through the State Children's Health Insurance Program (CHIP). Enacted as part of the Balanced Budget Act of 1997, CHIP is designed to cover children in families with incomes below 200 percent of the federal poverty level. A total of $39.7 billion has been authorized for the CHIP program for FY1998 through FY2007 to provide health insurance coverage to low-income children not already eligible for Medicaid. During FY1999, nearly 2 million children were enrolled in CHIP (Herz, 2000).
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