Protecting the uninsured involves knowing just exactly who they are

Public policy-makers trying to increase health insurance coverage will be more effective if they design programs that fit the uninsured population, according to Congressional Budget Office director Douglas Holtz-Eakin. The trick, he added, is figuring out the big picture, which often is too big to actually read.

Testifying recently before the Health Subcommittee of the U.S. House Ways and Means Committee, Mr. Holtz-Eakin said that even something as basic as counting the number of uninsured people is tough.

"It has been frequently stated that about 40 million people lack health insurance coverage," he added. "That estimate, by itself, presents an incomplete and potentially misleading picture of the uninsured population. The uninsured population is constantly changing as people gain coverage and lose coverage. Furthermore, people vary greatly in the length of time that they remain uninsured. Some people are uninsured for long periods of time, but more are uninsured for shorter periods."

Using data from 1998 — the latest available for the measures they wanted to use — Congressional Budget Office staff estimated that between 21 million and 31 million people were uninsured all year; at any point in time during the year, some 40 million people were uninsured; and nearly 60 million people were uninsured at some point during the year.

Mr. Holtz-Eakin testified that more recent analyses by the Agency for Healthcare Research and Quality indicate that the measures his office used to assess the number of uninsured have remained fairly stable in the years from 1998 to 2001.

Nearly 30% of Americans younger than 65 who become uninsured in a given year remain so for more than 12 months, Mr. Holtz-Eakin said, while 45% obtain coverage within four months. People with less education, those with low income, and Hispanics are more likely than others to be uninsured. They also are somewhat more likely to remain uninsured for long periods.

Majority in working families

The vast majority of the uninsured, according to Mr. Holtz-Eakin’s analysis, are in working families. Some 43% of those who were uninsured all year in 1998 were in families in which at least one person worked full time all year. And 47% were in families in which at least one person worked part time or for a portion of the year. Studies also have found that 75% of uninsured workers are not offered insurance by their employers. Low-wage workers are less likely to be offered insurance by their employers and less likely to accept it if it is offered.

In trying to solve the problem of the uninsured, he said, policy-makers should be mindful of the dynamic nature of the uninsured population as well as the distinction between the short-term and long-term uninsured.

"For people with short spells of being uninsured," he advised, "policies might have the goal for filling the temporary gap in coverage or of preventing such a gap from occurring. For people with longer periods without insurance, policies might seek to provide or facilitate an ongoing source of coverage."

An issue that complicates designing solutions is what is known as the crowding out of existing coverage — when employees or employers drop existing coverage in favor of a new government initiative. A related issue, according to Mr. Holtz-Eakin, concerns health insurance tax credits or similar subsidy programs. Some proposals would extend credits or subsidies to people who would have been insured even without them. With both crowding out and tax credits/subsidies, federal aid is going to people who otherwise would have been insured. As a result, the federal cost per newly insured person could be substantially greater than the cost for each person who uses the federal programs or receives a tax credit.

Mr. Holtz-Eakin’s most important warning is that incremental reforms probably cannot provide insurance for everyone and attempting to achieve 100% coverage would be very expensive. As an alternative, he said, policy-makers could consider policies intended to expand coverage in conjunction with policies to strengthen the system through which the uninsured receive care, such as through increased funding for community health centers and public hospitals.

Determining factors

Kaiser Commission on Medicaid and the Uninsured executive director Diane Rowland testified that health coverage in America is very much a patchwork with health insurance dependent on where people live, where they work, and, too often, what they earn.

She also noted the heavy reliance on employer-based coverage and said the cost of health insurance in the workplace "is a substantial financial burden for both the employer and the employee, but remains a key fringe benefit, especially in large or unionized firms." She noted that when health insurance is offered in a workplace, most employees take the coverage even though the share of the premium they must pay often represents a substantial portion of their income.

"If health insurance coverage is not available through a group policy from an employer, families are hard pressed to be able to find and pay for a policy in the individual insurance market," Ms. Rowland testified. "Most directly purchased policies are expensive and have more limited benefits and more out-of-pocket costs than group coverage plans. Moreover, the cost of these policies is based on age and health risk, and any preexisting health conditions are generally excluded from coverage."

While Medicaid and SCHIP help fill the gaps for some of the lowest income people, this coverage is directed primarily at children and pregnant women and varies in availability across the states.

Ms. Rowland said all Americans should be concerned about the number of uninsured because health insurance makes a difference in how people access the health care system and, ultimately, their health. Leaving a substantial share of the population without health insurance affects not only those who are uninsured, but also the health and economic well-being of the country.

"Survey after survey," she said, "finds the uninsured are more likely than those with insurance to postpone seeking care, forgo needed care, and not get needed prescription medications. Many fear that obtaining care will be too costly. More than a third of the uninsured report needing care and not getting it, and nearly half say they have postponed seeking care due to cost.

"More than a third of the uninsured compared to 16% of the insured report having problems paying medical bills, and nearly a quarter report being contacted by a collection agency about medical bills compared to 8% of the insured," Ms. Rowland added.

"The uninsured also are less likely to have a regular source of care than the insured, and when they seek care, they are more likely to use a health clinic or emergency room. Lack of insurance thus takes a toll on both access to care and the financial well-being of the uninsured," she added.

Ms. Rowland also detailed the serious consequences that can await those who forego care.

She said that among the uninsured surveyed, half reported a significant loss of time at important life activities, and more than half reported a painful temporary disability, while 19% reported long-term disability as a result.

Compromising health

Lack of health insurance compromises the health of the uninsured, Ms. Rowland explained, because they receive less preventive care, are diagnosed at more advanced disease stages, and once diagnosed, tend to receive less therapeutic care and have higher mortality rates than the insured.

She reported that uninsured adults are less likely to receive preventive health services such as regular mammograms, clinical breast exams, pap tests, and colorectal screenings. They have higher cancer mortality rates, in part, because their diagnosis often comes late in the disease’s progression and survival chances are greatly reduced. Similarly, uninsured people with heart disease are less likely to undergo diagnostic and revascularization procedures, less likely to be admitted to hospitals with cardiac services, more likely to delay care for chest pain, and have a 25% higher in-hospital mortality.

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