TOPICS > Health

The Uninsured

September 30, 2002 at 12:00 AM EDT


RAY SUAREZ: For most of the 1990s, the number of Americans without health insurance rose relentlessly, even as the economy did well. In 1999 and 2000, the number dropped a bit, but new data released by the Census Bureau today shows that last year the number rose again, by 1.4 million. Overall, roughly 41.2 million people, or 14.6 percent of the population, were uninsured in 2001. Here to help explain what’s going on and what might be done about it are John Goodman, president and founder of the National Center of Policy Analysis, a research organization based in Dallas, Texas. And Ron Pollack, executive director of Families U.S.A., a consumer health advocacy group.

RAY SUAREZ: Well, John Goodman, what’s going on in the wider economy that is giving us this result? What is the number a symptom of?

JOHN GOODMAN: We’re getting more uninsured because the economy has taken the turn for the worse so you would expect that to happen but the really surprising thing is the point that you made earlier, that throughout the 1990s, which is a period of booming economic growth, rising incomes for every group, the number of uninsured kept right on rising.

RAY SUAREZ: Ron Pollack, when you look at the statistics, what do you see driving that number?

RON POLLACK: I think there are three factors that the Census Bureau is really pointing out here. And they’re essentially focused in the employer sector in terms of people getting coverage through their jobs. The first is that health care costs have risen very significantly. And unfortunately they’re likely to continue to increase over the next few years. Secondly, the labor market is much softer than it was before. What that means is that employers, when it was a tight labor market, they did not want to pass on those costs to their workers because they were competing for the best workers. Now that the labor market is much softer, now employers are passing more of those costs on to their workers, and for many that’s unsustainable. The third factor is unemployment has risen. Since the vast majority of Americans get their coverage through employment when they become unemployed, they’re likely to lose their insurance coverage. Now there was one piece of silver lining in the Census Bureau’s report, and they are very clear about this. And that silver lining is that even though there was a very significant drop in the number of people who had employer-based coverage, there was an increase in the number of people who had public coverage. When I say “public coverage,” I mean Medicaid and the children’s health insurance program. And that cushioned the impact of this big reduction in the private sector. So what the Census Bureau is telling us, thankfully, is that these public sector programs are ç working, they are ameliorating increases in the number of people who are uninsured. Hopefully we will build on those programs o make sure that the 41.2 million people who are uninsured today can gain coverage.

RAY SUAREZ: John Goodman, do you see that transition from private systems to public systems a as a silver lining?

JOHN GOODMAN: Not at all. In fact throughout the 1990s, as Medicaid grew and as the program for the children grew, the private sector contracted. So what’s happening is the public sector is crowding out the private sector. We end up as taxpayers wasting a lot of money. Basically for every dollar we spend on Medicaid the private sector reduces its spending by 75 cents. So we spend a lot of money, accomplish very little. Our tax burden keeps rising. But the number of uninsured isn’t going down; in fact it’s going up.

RAY SUAREZ: But are these people who would be otherwise uninsurable — Ron also talked about costs going up and a lot of these costs or more of these costs being passed on to individual clients.

JOHN GOODMAN: Costs are going up. But it’s better in general to have people in the private sector than in the public sector. I don’t know anyone on Medicaid who thinks that’s a better insurance plan than the typical plan that you find in the private sector. So what we should be doing is instead of moving people from private to public is we should be thinking of ways to go in the other direction. Let’s get people off of the public programs, get them off the taxpayers’ burden and put them over in the private sector.

RON POLLACK: Ray, I don’t really differ with John on a key point he’s making. I don’t think people want to leave their health coverage that they have through their employer. They like that. Most people like that. So I’m not urging that we try to switch and move people from the private sector to the public sector. Unfortunately, however, when employers drop coverage because they can’t sustain coverage or when the employers pass on those costs to their workers, and those workers, especially low-wage workers, can’t afford this, they need some kind of a safety net. And John’s right. I think people do want to get their coverage in the private sector. But when they can’t get it, there needs to be a safety net for them. And the Medicaid program has done that. Now, we still have a long way to go. In John’s home state of Texas, for example, children are covered reasonably well. They’re covered at 200 percent of the poverty line, roughly $30,000 of income for a family of three. Parents, on the other hand, in Texas, they are ineligible if they have income more than $5,000 a year for a family of three. And for people who are not parents, adults, childless couples, or singles, they can literally be penniless and they cannot qualify for Medicaid. So we have to make some significant improvements in these public sector programs but I am not urging that we move people from the private sector to the public sector. We just have to make sure that the public sector provides a real safety net.

RAY SUAREZ: Let’s go back to today’s census report. 14.6 percent is almost exactly one out of every seven Americans. Who are these uninsured, John Goodman?

JOHN GOODMAN: Well, interestingly enough, most of them are not really poor but just between being poor and being middle class. But in this census report– and it’s been true for the last five or six years– most of the increase in the uninsured has come among people who are upper middle class, people making $75,000-$80,000 a year. Interestingly, people who could easily afford to buy health insurance are deciding not to buy it. I think one of the reasons for that is that we’re making it increasingly easy for people to get insurance after they get sick. And if you know you can get insurance after you get sick, there’s no reason to pay those high premiums when you’re healthy.

RAY SUAREZ: They’re gambling, even these upper income Americans.

JOHN GOODMAN: They are indeed.

RON POLLACK: Ray, there are some upper income Americans who have chosen not to have coverage, but that’s not the story.

RAY SUAREZ: Isn’t that the largest single portion of this latest growth that we’ve measured?

RON POLLACK: No, no, no.

JOHN GOODMAN: Yes, it is.

RON POLLACK: By no means. If you look at who consists of the uninsured, over half of them, of the 41.2 million American s who are uninsured have incomes or are in families with incomes below 200 percent of poverty. Again that’s only 30,000 dollars of income for a family of three. Where the uninsured congregate is very important to understand, 80 percent of the people who are uninsured are in working families. Most of them work full time.

RAY SUAREZ: Your definition is, what, one adult has a job?

RON POLLACK: Yes, where the bread winner has a job. Now, the other thing that’s very important to understand is that the people who are uninsured tend to be employees in small businesses. And small businesses have had a real difficulty paying for the costs of health coverage. And so what we see small businesses doing– and I’m not blaming them — this is not a blame game here– is that they’re eliminating coverage or they’re passing on more premiums, deductibles and other co-payments. They’re cutting coverage so that the employees are uncovered for certain kinds of services. When that happens, for a low- wage working family, they can’t pay for those costs. And so those folks often are uninsured. They either don’t have health coverage offered to them in the workplace or the costs are so significant that they cannot afford it.

JOHN GOODMAN: What’s happening at the lower end of the income scale is that people are leaving their employer plan and they’re going to Medicaid. They’re going to a public plan. But again over the last four or five years, more than half of the increase in the uninsured– this is the increase in the uninsured– are among families who make more than $50,000 a year and more than half of those are making more than $80,000 a year. So there are a lot of newly uninsured people who could have afforded to buy health insurance and chose not to.

RON POLLACK: Ray, John worded that very, very carefully. He didn’t talk about the number of people who are uninsured today. He talked about the recent increase. When you look at the 41….

JOHN GOODMAN: We’re looking at that.

RON POLLACK: We’re looking at 41.2 million Americans. And of those 41.2 million Americans, the overwhelmingly majority of them are in low-wage jobs and they’re in jobs that either don’t have health care coverage or it’s much too expensive for them. And so unfortunately that’s the group we need to focus on. One other thing I think I should mention here, there was a 1.4 million increase in the number of uninsured from the year 2000 to 2001. The Census Bureau also told us that they did a new calculation of the number of people who are uninsured in the previous year. And that new calculation showed that 1.1 million additional people were uninsured than they had described the year before. So last year when the Census Bureau reported, they said there were 38.7 million Americans uninsured. Today it’s 41.2 million. That’s a 2.5 million increase. And unfortunately unless we help this group that are in low-wage working families, we’re not going to make headway.

JOHN GOODMAN: President Bush has a proposal that I had some small input into. It’s a very good proposal. It would for the first time grant a tax relief to people who buy their own insurance. This is the first President who has proposed to do this. Under the current system, people who get insurance through an employer get a generous tax break. People who buy their own insurance get no tax relief. President Bush would extend that tax relief to the rest of the population. If Congress would simply act on this proposal, estimates are that an additional six million people would become insured as a result of it.

RAY SUAREZ: When you’re talking about increasing costs– and both of you have mentioned it– are these new uninsured people who can get back on the train at some point if costs keep rising at a time when they find themselves unable to afford what’s on offer?

RON POLLACK: Ray, it’s going to get worse. It’s going to get worse because as they costs continue to escalate more and more people are going to find health costs unsustainable.

RAY SUAREZ: Quickly, your answer.

JOHN GOODMAN: Again we need to remember that the number of uninsured kept right on rising as incomes were rising, as premiums were stable. And so more is going on than just economics. We’ve made it very easy for people to get health care and get insurance after they get sick. But what we need to do is have a fair system so that people who do purchase their own insurance get the same tax relief that everybody else is getting.

RAY SUAREZ: Gentlemen, thanks a lot.