Families USA: Study illustrates the depth of problems of uninsured

Families USA has a different view of the uninsured than the federal government. The group says that while the Census Bureau’s Current Population Survey estimated there were 43.6 million uninsured people in the United States in 2002, 14.6% more than in 2001, the reality is that 81.8 million people — or one out of three Americans younger than 65 — were without health insurance for all or part of 2002 or 2003.

Of that 81.8 million, two-thirds were uninsured for six months or more, Families USA says, and the 81.8 million figure does not double count people who were uninsured in both 2002 and 2003. The difference between the Census Bureau statistics and those from Families USA comes because many people are uninsured for a portion of a year, but not for the entire year. Families USA says such people are not reflected in the widely quoted Census Bureau numbers, but they may be profoundly affected by their uninsured status, in terms of both their physical and economic well-being.

"To fully understand the scope of the problem — to know how many Americans are directly affected by a lack of health insurance — we need to broaden our sights and include those who are uninsured for a portion of the year, as well," Families USA says in its report.

Enormous epidemic

"One out of three nonelderly Americans without health insurance constitutes an enormous epidemic that requires immediate attention," says Families USA executive director Ron Pollack. "It is high time that this problem rises to the top of our national agenda. The growing number of Americans without health insurance is now a phenomenon that significantly affects middle-class and working families. As a result, this problem is no longer simply an altruistic issue affecting the poor, but a matter of self-interest for almost everyone."

For 14 states, including the four most populous states, more than one-third of the people younger than 65 went without health insurance for all or part of 2002-03. Those states, with the percentage of the population younger than 65 that was uninsured, were:

  • Texas (43.4%);
  • New Mexico (42.4%);
  • California (37.1%);
  • Nevada (36.8%);
  • Louisiana (36.2%);
  • Arizona (35.7%);
  • Mississippi (35.1%);
  • Oklahoma (35%);
  • Alaska (35%);
  • Florida (34.6%);
  • Arkansas (34.4%);
  • Idaho (33.8%);
  • North Carolina (33.7%);
  • New York (33.4%).

The 10 states with the largest numbers of uninsured people were California (11.9 million), Texas (8.5 million), New York (5.6 million), Florida (4.8 million), Illinois (3.5 million), Pennsylvania (2.8 million), Ohio (2.8 million), Michigan (2.5 million), Georgia (2.5 million), and North Carolina (2.4 million).

Families USA estimates that just over half the 81.8 million uninsured (50.6%) were without health coverage for nine or more months. They contend that 11.8% were uninsured for nine to 12 months, 22.1% for 13 to 23 months, and 16.7% for more than 24 months. Only 7.1% were uninsured for two months or less, and 27.6% for three to five months.

Many factors cause variations

The wide variation in state experience is due to variations in a number of factors, Families USA says, including the categories of people covered by, income eligibility levels for, and enrollment rules of a state’s Medicaid and SCHIP programs; the prevalence of jobs that offer health coverage; state economies and the incomes of state residents; the existence of state COBRA-like health continuation laws for workers in small firms who lose their employer-based coverage; and the presence of other state health insurance programs.

As has been noted in many other studies, more than four in five individuals (84.5%) who went without health insurance in 2002-03 were connected to the work force in December 2003, with 78.7% employed and 5.7% actively seeking employment. Only 15.5% of the uninsured adults and parents of uninsured children were not in the labor force, either because they were disabled, chronically ill, family caregivers, or not looking for employment for other reasons.

Families USA says there are four principal reasons why employed people went without health insurance coverage (or their children went without coverage) for all or part of the previous two years. First, not all jobs offer health insurance benefits. The likelihood that an employer offers benefits to its workers varies considerably according to the characteristics of the employer. Thus, small employers, low-wage employers, and employers with older workers are all less likely to offer health coverage to their employees than their counterparts.

The second factor is that some employees who are offered coverage by their employers, especially low-wage workers, can’t afford to pay their share of the premium cost. As income rises, the risk of being uninsured declines.

Third, contrary to popular belief, Medicaid doesn’t provide coverage to most workers in low-wage jobs. Medicaid eligibility levels are set by each state. A parent in a family of three working full-time all year at the federal minimum wage of $5.15 per hour would earn too much to qualify for Medicaid in half the states, even though the family’s annual income only would be about $10,700, well below the poverty level.

The fourth important reason why people employed in December 2003 experienced gaps in health insurance coverage in the past two years was temporary job loss due to layoffs, job elimination, termination, or worker choice. Families USA suggests that as the work force becomes increasingly mobile, it is likely that more workers will experience periods of joblessness and thus temporary loss of insurance.

"Any attempt to provide coverage to a significant number of uninsured individuals must address the problem of lower wage workers who are not offered or cannot afford employer-based health insurance," Families USA says. "Further, solutions to the uninsured that build on the employer-based health insurance system also must address the gaps in health insurance coverage that occur with gaps in employment."

Nearly two-thirds (60.9%) of individuals in families with incomes at or below 100% of the federal poverty level ($18,660 a year for a family of four in 2003) were uninsured. And more than half (53.5%) of individuals in families with incomes between 100% and 200% of poverty were uninsured. While the likelihood of being uninsured decreases considerably as income increases, there still were 25.2% of working individuals and their families with incomes between 300% and 400% of the federal poverty level (from $55,980 to $74,040 a year for a family of four in 2003) who were uninsured. For people with incomes even at four or more times the poverty level, the rate of uninsurance still was 13.7%.

Cutting the data by race, Families USA found that Hispanics and African Americans were much more likely to be uninsured compared to white, non-Hispanics (59.5% Hispanics, 42.9% African Americans, and 23.5% non-Hispanic whites). However, white, non-Hispanics made up the largest category (48.1%) of people younger than 65 without health insurance for all or part of the two-year period.

Minorities uninsured longer

Not only are Hispanics and African Americans more likely to be uninsured, they also experience longer spells of uninsurance compared to white non-Hispanics. Of the total number of uninsured Hispanics, 50.2% were uninsured for 13 months or more. And of the total number of uninsured African Americans, 34.1% were uninsured for 13 months or more. By contrast, of the total number of white, non-Hispanic people who were uninsured, only 24.2% were uninsured for 13 months or more.

Families USA says that while employer-based health insurance coverage is the most common source of insurance for people younger than 65 in the United States, data show many uninsured people are in families with at least one member who is working. Hispanics and African Americans are disproportionately represented in low-wage jobs and jobs in sectors that are less likely to have health insurance benefits. As a result, Hispanics and African Americans are more likely to work and not have health insurance benefits than are white, non-Hispanic people.

Also, uninsured Hispanics and African Americans are poorer than uninsured white, non-Hispanic people. Among uninsured Hispanics and African Americans, 82.9% and 80% respectively have family incomes below 300% of the poverty level ($55,980 for a family of four in 2003), while for white, non-Hispanic people 64.4% have incomes below 300% of the poverty level. Families USA says any solution to the uninsured must effectively target people with incomes below 300% of the poverty level if it is to reach the majority of uninsured Hispanics and African Americans.

Looking at the data in terms of age, 54.8 million of the 81.8 million uninsured people were adults between 18 and 64. The likelihood of being uninsured declined among adults as age increased. The percentage who were uninsured was highest among 18- to 24-year-olds (50.3%) and 25- to 44-year-olds (32.9%). The percentage that was uninsured declined for 45- to 54-year-olds to 20.7%, and for 55- to 64-year-olds to 17.3%.

Since two-thirds of insured people get health insurance coverage through an employer (either their own or that of a family member), the decline in the likelihood of being uninsured is probably explained by the tendency of adults to move to better compensated employment with health insurance benefits as they move up the job ladder over time.

Although older adults are less likely to be uninsured, they may have more difficulty obtaining coverage. People who do not have employer-based coverage and must therefore rely on the individual market are less able to secure health insurance coverage as they age. Insurers often will not offer coverage to older people; and if they do, they may charge much higher premiums. Thus, according to Families USA, any solution that helps provide health insurance coverage to uninsured Americans must reach and work for middle-aged populations. Solutions that rely on the individual, private health insurance market without protections against health status and age underwriting will do little to ameliorate the uninsurance problem.

Families USA says one of the most disturbing findings in its analysis was the rate of uninsurance among children. Some 27 million of the 81.8 million uninsured were children, 36.7% of all children in the United States. By comparison, the March 2003 Current Population Study report using 2002 data showed that only 8.5 million, 11.6%, of the total number of children in the United States were uninsured. The significant difference, Families USA says, is because the population report purports to estimate the number of uninsured children for a full year, while Families USA is making an estimate of the number of children uninsured for a full year as well as children uninsured for shorter periods of time. Uninsured children tend to experience shorter periods of uninsurance than adults for several reasons, according to the Families USA analysis.

First, more than 16 million uninsured children are in families with incomes below 200% of the federal poverty level and thus should be eligible for their states’ Medicaid or SCHIP programs.

One explanation for the high rate of uninsurance among these children is movement on and off and back on Medicaid and SCHIP, which leaves a significant number uninsured for short periods of time. This pattern of enrollment and disenrollment, sometimes referred to as churning, occurs for several reasons. For instance, some states have periodic eligibility review processes that a parent may not follow in a timely manner. Other states require families to pay monthly premiums to receive health services and the inability of an unemployed or low-wage parent to pay these premiums can result in loss of SCHIP eligibility until the premium is paid.

Also, access of low-income children to health insurance coverage was affected by state actions during 2002-03 in response to fiscal problems and the pressure to reduce Medicaid budgets. Not only did many states increase barriers to enrollment and eligibility review, but six states — Alabama, Colorado, Florida, Maryland, Montana, and Utah — stopped enrolling children in their SCHIP programs.

Call to action

At a news conference releasing the report, a number of governors and members of the U.S. House of Representatives talked about the impact of so many uninsured people. "As Families USA’s prescient study states, there are considerably larger numbers of people who are without health insurance at different times than popularly believed," commented Iowa Gov. Tom Vilsack.

"This means an even greater number of people are without guaranteed health care security. This is a reflection of an economy that is still not on solid ground. And it is a call to action to ensure that government programs that provide health care remain solvent and viable," he noted.

Maine governor John Balducci said health reform is a necessity in his state. "We brought all the stakeholders together and created Dirigo Health [Maine’s attempt to achieve universal health coverage], our solution to fix a broken system," he said. "Our goal is universal access to affordable and quality coverage within five years."

(The report is available on-line at www.familiesusa.org.)