May is Cover the Uninsured Month
Health Care Coverage for the Uninsured
A National Perspective& Primer
Who Are the 46 Million Uninsured in America?
Nearly two-thirds of uninsured individuals and families fall into a category called “low-income.” This is a federal government definition that means a person or family makes less than 200% of what the federal government defines as the poverty level. In 2005, this was $32,180 for a family of three.
80% of uninsured individuals are from families where at least one person is working full time. They may be working in small firms that do not offer insurance, or they may not be able to afford the costs of deductibles and co-pays in the plans offered.
Nearly three-quarters of the 46 million uninsured are adults, because we’ve focused public programs on covering children either through Medicaid or through the State Childrens’ Health Insurance Programs (SCHIP). However, there are still nearly 10 million children who are uninsured, even though many are eligible for those public programs.
The majority of uninsured adults have gone without coverage for a period of at least two years, and many of them are unable to get insurance because they have chronic health problems that define them as “high risk” and “high cost”.
Minorities comprise a disproportionate share of uninsured people.
82% of the uninsured people are American citizens – most of the rest of the uninsured are legal permanent residents or qualify for residency.
Finally, nearly a quarter of uninsured people – or 10 million individuals – are financially able to pay for coverage, but have chosen not to get insurance for a variety of reasons.1
Why Do These Facts Matter?
Lack of insurance can be a matter of life and death. The Institute of Medicine estimates that 18,000 people died last year as a result of factors directly related to the fact that they did not have insurance. Beyond mortality, people without insurance often delay seeking care when they need it, which can lead to late stage diagnoses, failure to obtain necessary care once illness is diagnosed, treatment at great expense in emergency rooms, and prolonged ill health.2
“Lack of insurance also has serious negative consequences and economic costs not only for the uninsured themselves, but also for their families, they communities they live in, and the whole country.” 3 Their health care costs are often higher than earlier treatment would have been, and the burden of unpaid medical bills is often passed on to others – to taxpayers who support subsidized programs, to privately insured people through higher rates, and to providers who absorb the cost by giving care pro bono or at reimbursements lower than the cost of care. A recent study found that American families pay an estimated $900 in higher premiums each year to compensate for un-reimbursed care provided to the uninsured.4
To many Americans, our failure to provide adequate health care to all our residents is a moral as well as an economic issue. Some regard access to health care as a human right and a matter of social justice, not just social policy.
Regardless of where you stand on rights v. needs, it is clear that keeping children and adults healthy, preventing the public spread of disease, and caring for those who are sick, are important and time-honored American values.
What Approaches Are Being Considered at the National Level?
Building on programs instituted in the 20th century – such as federally funded Medicare for Americans over the age of 65, or state and federally funded Medicaid for poor or disabled children and families – both Republican and Democratic administrations have attempted to reform the structure of the health care delivery system. Recent attempts at comprehensive reform failed for lack of consensus.
Today, the concerns continue, but there is even less agreement among the major stakeholders – large and small employers; organized labor; insurance providers; hospital organizations; physician and other provider groups; pharmaceutical companies; and consumer advocates across the ideological spectrum. All agree that significant changes are critically needed. All agree that the three major issues are access, cost, and quality. And all agree that those three issues are intricately and inextricably connected.
What they cannot agree upon, however, is what should be the respective roles and responsibilities of insurers, employers, federal and state governments, providers, and individual citizens in the health care delivery system. Consensus on a specific plan of action remains elusive.
As a result, a variety of small fixes, mostly incremental in nature, is currently on the table.
Health Savings Accounts (HSAs): HSA’s are to be jointly funded by employers and employees. These accounts would permit individuals to purchase whatever insurance plans they choose, and to use HSA funds to pay premium costs, high deductibles and – depending on their size – required co-payments. HSAs are strongly supported by those who wish to maximize consumer choice, and generally opposed by those who are concerned that low-income and part-time workers would never be able to create large enough accounts to pay for needed care. There is also concern that such policies would result in “adverse selection “ – taking the healthiest people out of the insurance pool and driving up costs for the sicker and higher risk people remaining.
Associated Health Plans (AHPs): AHP’s are strongly supported by companies and groups with employees in different states. These plans would permit employers to band together across state boundaries to purchase or subsidize insurance coverage for their employees. Since they would be exempt from the consumer protection regulation of existing state Insurance Commissions, AHPs are opposed by many state governments, organized labor and some consumer advocates who fear they would undermine consumer protections and might also, like HSAs, result in “adverse selection.”
Tax Credits: Tax credits can be used in a variety of ways; current tax credits allow employers to consider the health care costs for their employees a pre-tax business expense. As a proposed tool to expand health care coverage to low income and other groups needing help, tax credits would be a subsidy to make coverage affordable and paid in advance. Funded by the federal government, they might be structured on a sliding scale related to income, and used as vouchers with which low wage workers could pay the employee share of health insurance premiums, even using the tax credits to cover high deductible and other out-of-pocket costs.
Improved Enrollment in Existing Public Programs – particularly for Children:
62% of all uninsured children are eligible for, but not enrolled in, Medicaid or the SCHIP program. Most states have simplified their application procedures, but recent budget pressures have forced some states to cut back. Since most uninsured, low income children participate in other federal programs based on income-eligibility -- such as school lunch and breakfast programs -- using a single eligibility assessment and other simplified enrollment procedures might bring many of these children into the safety net.
Expanded Medicaid Programs - Particularly for Single Low-Income Adults:
At the present moment, federal law forbids state Medicaid programs from covering adults without dependent children, no matter how low their income, unless they are elderly, disabled, or pregnant. Permitting states to extend Medicaid services to that population would bring health care coverage to over two million individuals.
Expanding Parental Coverage to Include Young Adults: Young adults age 19 through 29 represent 30% of uninsured Americans.5 They are often leaving school, just entering the labor force, and not yet covered by employer-sponsored plans. If the government required that insurance policies cover children under their parents’ plan up to say 25, -- regardless of student or dependent status – it would help to reduce the numbers of uninsured, and – because most of these people are healthy – the cost of covering them would be modest.
Establishing High-Risk Pools: Over 1 million Americans have medical conditions (such as diabetes or cerebral palsy) that pose such a high risk in terms of potential medical costs that they are denied coverage outright, or are faced with purchasing policies that are prohibitively expensive. The cost of covering such individuals is much higher than for the general population, and the risk has to be spread through some financing mechanism over the population as a whole. Some proposals suggest protecting insurance companies that accept such risks through government-subsidized “reinsurance.” Others encourage state-run purchasing pools that would spread the risk over the insured population at large. Whatever the details, more attention to this high-cost and high-need
population is critically needed.
More far-reaching approaches
–not currently under consideration in Washington,
but still being talked about in the national conversation –
are worth noting.
“Pay or Play”: Employer Mandates: For the last sixty years, health care coverage has been built upon employer-sponsored health insurance. Virtually all large employers and many medium and even small firms provide some form of such insurance to their employees. However, this has been and continues to be a voluntary system. Many employers – particularly small ones – have vociferously opposed any and all efforts by government to require that they provide insurance, or that they be required to pay into a pool which would be used to subsidize insurance for low-wage workers who cannot afford it. Despite this opposition, in the last year both Maryland and Massachusetts have included an employer mandate in health care legislation.
Individual Mandates: Similar to the employer mandate, this approach would require that all individuals, over some defined period of time, arrange to be covered by some health care insurance. This might be an individually purchased plan; an employer provided plan; or enrollment in some public program. Whatever the specifics, every individual would have to indicate that they were insured, or would have to pay some amount as part of their annual taxes. Opponents of this approach argue that no one should be required to buy anything, and particularly not health care. Supporters of this approach compare it to the requirement for drivers to have licenses, and believe that only through such an approach can full coverage be achieved.
A Single Payer National Health Plan: The essence of a national health plan is that everyone has health care coverage as a right -- automatically, and with no eligibility requirements. One way of thinking of such an approach would be to consider it the equivalent of Medicare for all – everyone would automatically be enrolled in a single, government-based program and provided a standard benefit package that could be delivered through the private sector. Those who support this approach argue that it would have lower administrative costs than private insurance; that it would provide a simpler system for providers and consumers to navigate; that it would encourage electronic data management and improve quality, efficiency, and cost control. Those who are opposed fear that the
federal budget deficit prohibits such a large federal expenditure; that government cost controls would dilute quality service and independent medical decision-making; and that a national bureaucracy would be too inflexible to adapt to new conditions and technological changes.
State Initiatives: As the federal deficit not only persists but grows larger, innovation and experimentation with new approaches to expanding Health Care Coverage have moved to the state level. Maine, Wisconsin, Ohio, Maryland, and Massachusetts are all engaged in unusual efforts to address health care access and coverage in new ways.
Next month we will continue this discussion with
an analysis of the new Massachusetts health care legislation.
In the meantime, please explore the following links. They provide further information about health care for the uninsured and how you can engage in the national discussion.
Cover the Uninsured
Kaiser Family Foundation, The Uninsured: A Primer, 2004.
BlueCross BlueShield Association, The Uninsured in America, January 2005.
AHIP (America’s Health Insurance Plans), Board of Directors Statement: A Commitment to Improve Health Care Quality, Access and Affordability, March 2004.
What’s Your View?
Please feel free to comment on any of the ideas presented in this article, to share your own experiences with health care coverage, or to offer your own suggestions about how America should address this challenge. You may address your correspondence to:
This article was prepared by Patricia (Paddy) Worlock Moore. Ms. Moore is an Island resident, a health care mediator, and President of the Foundation for Island Health. She is currently co-facilitating a national dialogue among major stakeholders aimed at developing consensus recommendations for new national legislation to “expand health coverage to as many people as possible as quickly as possible.”
1. Catherine Hoffman, Alicia Carlbaugh, Hannah Yang Moore, and Allison Cook, Health Insurance Coverage in America: 2004 Data Update (Kaiser Commission on Medicaid and the Uninsured (KCMU) and the Urban Institute), November 2005.
2. Institute of Medicine of the National Academies of the National Academies Committee on Uninsurance, Insuring America’s Health: Principles and Recommendations, Washington, DC: National Academies Press, 2004.
3. Institute of Medicine, Op cit., p. 1.
4. Families USA, Paying a Premium: The Added Cost of Care for the Uninsured, Washington, DC, Families USA, June 2005.
5. Stan Dorn, PhD, ESRI Report: A Coverage Expansion Toolkit, Unpublished, 2005,