Lack of health insurance coverage among millions of Americans remains one of this nation’s most pressing social challenges, but one that is often not well understood. Common knowledge about who the uninsured are, why they are uninsured, the difference health coverage makes, as well as the impact on all our lives of having a large uninsured population — is riddled with misconceptions and myths. Basic facts about the uninsured are essential to understanding how we might address the growing numbers of Americans without health insurance.
Who are the 47 Million Uninsured?
- Two-thirds of the uninsured are from low-income families, with incomes less than twice the poverty level.
- Eight in ten uninsured Americans come from working families. Even among the poor, the majority of the uninsured have at least one worker in their family.
- 80% of the uninsured are adults. Young adults (ages 19-24) are at greatest risk of being uninsured and make up more than one of every three uninsured adults.
- The majority of uninsured adults (75%) have gone without coverage for a period of at least one year.
- Racial and ethnic minorities make up a greater share of the uninsured because compared to the white majority they are far less likely to have health coverage offered through their jobs or to be able to afford health premiums. At 36% of the non-elderly population, minorities comprise 55% of the uninsured.
- Among employment-age adults, men are more likely to lack health insurance than women. Twenty percent of such men lack insurance, compared with 16 percent of women. This gender difference is slightly less pronounced in states with high proportions of the uninsured, such as Texas and New Mexico.
- The large majority of the uninsured (78%) are American citizens. However, non-citizens have high uninsured rates due to their low-wage jobs that are less likely to offer health insurance and restrictions on their eligibility for public coverage.
Why Are They Uninsured?
- The large majority of uninsured do not have coverage because they do not have access to affordable employer coverage or they can not afford to purchase coverage on their own.
- 70% of uninsured employees work for firms that do not offer health benefits or they are not eligible for their employer’s plan. Most workers enroll in their employer’s health insurance plan if they are eligible, and even the majority of low-income employees enroll when coverage is offered through their employer.
- The average total annual cost of employer-sponsored family coverage in 2007 was $12,106 — seldom affordable to low-wage workers without sizable contributions from their employers.
- Only 2% of uninsured adults report that they do not have health coverage because they think they do not need it.
- Three-quarters of the uninsured are not eligible for public coverage. Medicaid covers most low-income children, but unless severely disabled or pregnant, even the poorest adults are generally ineligible if they do not have children.
What Difference Does Health Insurance Make?
- The uninsured use less health care than the insured. Their costs for health services for an entire year are just over half that of those with insurance (roughly $1,600 vs. $3,000 per person). They pay for over a third of these costs out of pocket.
- Charges for services may actually be higher for the uninsured in comparison to insured patients whose insurance companies have negotiated lower fees with providers.
- Less than a quarter (23%) of uninsured adults report having received care for free or at reduced rates in the past year.
- Even so, about $40 billion of the costs of caring for the uninsured were unpaid or “uncompensated” in 2004. Federal and state tax dollars subsidized $35 billion (about 85%) of these costs, and that funding largely goes to hospitals and community clinics.
- The uninsured are more likely to postpone and forgo care, with serious consequences that increase their chances of preventable health problems, disability, and premature death.
- About a quarter (23%) of uninsured adults report needing care in the previous year but not getting it due to cost, compared to just two percent of those with private coverage or Medicaid/SCHIP.
- The research evidence is consistent: the uninsured are less likely than those with insurance to receive services for major health conditions, including traumatic injuries, heart attacks, pregnancy, and chronic diseases.
- The uninsured are more likely than the insured to develop a disability over time, and even after accounting for health differences, they are more likely to die early.
- It is estimated that at least 22,000 Americans die prematurely each year simply because they lack health coverage.
For additional information, visit www.kff.org.
Health Care Spending
- In 1970, the us spent approximately $75 million on health care. In 2006, that number stood at $2.1 trillion dollars.
- The us spends 50% more than any other country on health care
- The us ranks 1st in money spent on health care, 15th in preventable death, 24th in life expectancy, and 28th in infant mortality
» “Health Care: us Spends Most, Covers Least.” July 25, 2006. Economic Policy Institute.
» “WHO Issues New Healthy Life Expectancy Rankings.” June 4, 2000. World Health Organization.
» “Snapshots: Health Care Costs.” Kaiser Family Foundation.
Consequences of Lack of Coverage
- The lost productivity of uninsured Americans costs the economy up to $130 billion dollars a year — more than the estimated cost to cover the uninsured.
- Covering the bills of the uninsured increases the annual health premiums for the average family by $922.
- Hospitals typically charge uninsured patients 2.5 times what they charge privately insured patients.
- Uninsured adults are 4.5 times more likely to go without medical care than insured adults.
- Uninsured cancer patients are nearly twice as likely to die within five years as insured patients.
- Over half a million Americans are currently battling cancer without insurance.
- Among non-elderly adults, the lack of health insurance is the sixth leading cause of death in America.
» “Report Brief. Insuring America’s Health: Principles and Recommendations.” January 11, 2004. The Institute of Medicine.
» “Paying a Premium: The Increased Cost of Care for the Uninsured.” June 8, 2005. Families usA.
» “From ‘Soak The Rich’ To ‘Soak The Poor’: Recent Trends In Hospital Pricing.” Moser, Stan. Health Affairs, 11 May 2007.
» “Wrong Direction: One Out of Three Americans Are Uninsured.” September 2007. Families usA.
Insurance Status Linked to Cancer Outcomes.” American Cancer Society.
us Government Health Care Programs
Medicaid is a federal entitlement program that provides free or low-cost health and long-term care coverage to certain categories of low-income Americans. States design their own Medicaid programs within broad federal guidelines and cover 59 million people.
Medicare is a federal entitlement program that provides health insurance coverage to 44 million people, including persons age 65 or older, and younger people with permanent disabilities, end-stage renal disease, and Lou Gehrig’s disease.
- Supplemental Security Income (SSI)
Supplemental Security Income (SSI) is a federal entitlement program administered by the us Social Security Administration that provides cash assistance to low income elderly, disabled and blind individuals, generally with incomes below roughly 75% of the federal poverty level and who meet federal limits on assets. Individuals receiving SSI benefits are automatically eligible for Medicaid coverage in all states except in the eleven states that have elected the option of using more restrictive criteria in determining Medicaid eligibility for SSI recipients.
- State Children’s Health Insurance Program (SCHIP)
The State Children’s Health Insurance Program (SCHIP) is a block grant to states that allows them to cover uninsured children who are not eligible for Medicaid. In 2006, SCHIP covered six million children at some point during the year.
National Health Care Plans
In response to the startling statistics about the uninsured presented by numerous health and advocacy organizations, there are currently individuals and groups working to promote universal health care. While national health care is a complex issue, the majority of proposals are built around three distinct philosophies:
- Tax incentives for individual market insurance. Proposals that rely primarily on individuals’ responsibility for obtaining coverage, with tax incentives to subsidize purchase of insurance in the individual insurance market.
- Mixed private-public group insurance with shared responsibility for financing. Proposals that build on our current mixed private-public system of health insurance with shared responsibility for financing coverage by government, employers, and households.
- Public insurance. Proposals that would cover nearly all Americans under public insurance programs, such as Medicare, with everyone covered through a single payer.
» “A Roadmap to Health Insurance for All: Principles for Reform.” Commonwealth Fund.
Presidential Candidates’ Viewpoints on Health care
Visit the Kaiser Family Foundation’s health08.org website to see a side-by-side summary of the 2008 Presidential Candidate Health Care Proposals.
In response to rising concerns over costs and access to quality care, states have led the way in making changes to health care and insurance policies in recent years. Massachusetts and Vermont passed reforms aimed at achieving universal coverage in 2006. Other states have considered similar programs, most recently California, where a bill to provide universal coverage was proposed by Governor Arnold Schwarzenegger, but died in a state senate committee.
Recent federal legislation has focused on an effort by Democrats in Congress to expand the State Children’s Health Insurance Program (SCHIP). The initiative, which would have increased funding and covered approximately four million additional children, was twice passed by Congress but vetoed by President George W. Bush. The president argued that the program would provide publicly subsidized insurance to children from middle- and high-income families who would otherwise receive coverage on their own.
At the same time, the president has proposed cuts in Medicaid and Medicare funding to take effect over the next five years, as part of a plan to reduce the annual federal budget deficit. Bush’s proposals would cut $6 billion from Medicare and $1.4 billion from Medicaid by reducing scheduled increases in payments to health care providers. The increases were intended to adjust reimbursement rates for increased costs of care.
Democrats, who control both the House of Representatives and the Senate, have pledged to resist the proposed cuts. Congressional leaders have said they are likely to pass a Medicare bill before then. Such a bill would also provide lawmakers a vehicle to propose additional changes.
» “Bush Seeks Surplus via Medicare Cuts.” The New York Times. January 31, 2008.