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58
Who Goes Without Health Insurance? Who Is Most Likely to Be Uninsured? This chapter provides a portrait of the uninsured, to support the Committee's future reports about the consequences of uninsurance. Here, the Committee reviews and summarizes the published literature about what socioeconomic, de- mographic, and geographic characteristics describe the uninsured both collectively and as members of groups in the general population that are more likely than average to be uninsured.] Supporting methodological information and data tables provide the numbers behind the general statements in the text and can be found in Appendixes C and D. All estimates are for persons uninsured during calendar year 1999 (the most recent available Current Population Survey data), unless otherwise indicated. The large number and variety of Americans who are uninsured underscore the Committee's conclusion that the voluntary, employment-based approach to insurance coverage in the United States functions less like a system and more like a sieve. There are many ways to slip through the holes. People of all ages, levels of education, and in all states may be uninsured, although socioeconomic and geo- 1There is a wealth of information about the characteristics of uninsured persons, families, and populations. In addition to the public surveys and databases conducted and maintained by federal agencies such as the Bureau of the Census and the Department of Health and Human Services, surveys and studies of insurance coverage and uninsured persons are supported by the Employee Benefit Research Institute, the Commonwealth Fund, the Kaiser Commission on Medicaid and the Uninsured, the Urban Institute's Assessing the New Federalism project, and The Robert Wood Johnson Foundation through the Community Tracking Study conducted by the Center for Studying Health System Change. 59
60 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE graphic factors that affect coverage are highly correlated. One's chances of being uninsured increase if one works in an occupation or in an employment sector where employers are less likely to offer a health benefit, if one is self-employed or works for a small private-sector firm, or if one has too low an income to afford coverage. The final section of this chapter includes estimates of the relative importance of key social, economic, demographic, and geographic characteristics to one's likelihood of being uninsured, based on a new multivariate analysis of published data. Most of the studies that the Committee reviewed are based on two-way (bivariate) analyses of a characteristic and the probability that an individual with that characteristic will be uninsured. Throughout the chapter, the Committee addresses two questions together: 1. What are the characteristics of the uninsured population? 2. Who is most likely to be uninsured? The distribution of socioeconomic, demographic, and geographic differences in the general population under age 65 affects how these characteristics are distrib- uted among the uninsured population because the relative size of specific popula- tion groups affects their representation among the uninsured. For example, the uninsured rate for the urban population is the same as that of the rural population, although four out of five uninsured people live in urban areas, reflecting the predominance of urban populations nationally. HOW SOCIAL AND ECONOMIC FACTORS AFFECT COVERAGE Full-time, full-year employment offers families the best chances of acquiring and keeping health insurance, as does an annual income of at least a moderate level (greater than 200 percent of the federal poverty level ~FPL]~. Insured status correlates highly with many aspects of employment, including work status, income level, educational attainment, occupation, and employer character- istics such as firm size and employment sector. Work Status Eight out of every ten uninsured people are members of families with at least one wage earner, and six out of every ten uninsured people are wage earners themselves. Nonetheless, members of families without wage earners are much more likely to be uninsured than members of families with wage earners. Families with at least one full-time, full-year worker are more than twice as likely to have health insurance coverage, compared to families whose wage earners work part-time Hess than 35 hours per week), as contingent labor (e.g., on a
TRIO GOES liVITHOUT HEALTH INSURANCE? 6 seasonal or temporary basis, as employees of contractors, self-employed), or in which there is no wage earner (Copeland et al., 1999; HofFman and Pohl, 2000; Thorpe and Florence, 1999) (Figures 3.1 and 3.2~. The availability of health insurance in the workplace is the most important factor in determining whether wage earners and their families are insured. Yet more than half of the uninsured under age 65 years are members of families with one full-time, full-year worker. Fully 82 percent of uninsured persons are members of families with at least one wage earner (HofFman and Pohl, 2000~. As discussed in Chapter 2, the rate of employment-based coverage has de- clined since the late 1970s, with wage earners in long-term, full-time positions ("core jobs") more likely to be insured than persons recently employed or work- ing less than full-time ("peripheral jobs") (Farber and Levy, 2000~. Contingent workers are less likely than full-time, permanent workers to be offered employ- ment-based coverage and less likely to take up or enroll in an offered plan, although they may receive insurance through a spouse (Buchmueller, 1996-1997; Copeland et al., 1999~. Given the relatively small proportion of contingent work- ers in the labor market (an estimated 10 percent in 1995) and the uniform decline in coverage rates among employment sectors during the 1980s, the net decline in employment-based coverage appears to have been driven by changes other than an increasing number of contingent workers (Long and Rodgers, 1995; Copeland et al., 1999~. However, ongoing and future labor force changes may have more of an adverse impact on employment-based coverage rates. One study has predicted that greater numbers of part-time workers may cause the employment-based Estimated 42.1 Million Uninsured People = 100.0% Families with 1 or More Part-Time Workers 11.6% Families with No Workers 17.6% ...... _l ~ Families with at Least 2 Full-Time Workers ~ OR ~ 55.1% 1~ Families with 1 Full-Time Worker Families with No Workers 82.4% Families with Workers FIGURE 3.1 Distribution of uninsured population under age 65, by work status of self or family breadwinner, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Hoffman and Pohl, 2000.
62 35 - ~_ ~ 30- c' ~ 25- tL ~ 20- i~ 15- 10- . _ ~ 5 - O - CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE 32.5 31.9 17.9 9.1 17.5 Family with No Wage-~rning Workers 1 or More Part- llme Workers Only 1 Full-llme 2 Full-llme General Worker Workers Population Under Age65 FIGURE 3.2 Probability of being uninsured for the population under age 65, by work status of self or of primary wage earner, 1999. SOURCE: Hoffman and Pohl, 2000. coverage rate to decline by 1 to 7 percentage points by the year 2008 (Acs and Blumberg, 2001~. Most uninsured wage earners are lower income (earning less than 200 percent of FPL) or moderate income (between 200 and 400 percent of FPL) (Budetti et al., 1999; Fronstin, 2000d; O'Brien and Feder, 1998~. Members of lower-income wage-earning families are more likely to lack coverage than are members of moderate- and higher-income families. This is a function of both the reduced likelihood that lower-waged jobs offer health benefits and the relatively costly premium, compared to income, paid by lower-income families to purchase em- ployment-based coverage (Gabel et al., 1999; O'Brien and Feder, 1999~. Income and Poverty Two-thirds of all uninsured persons are members of lower-income families (earning less than 200 percent of FPL). One-third of all mem- bers of lower-income families are uninsured. There are uninsured people at all income levels, although members offamilies earning less than 200 percent of FPL are twice as likely to be uninsured as are members of the general population under age 65 (Fronstin, 2000d).2 Translating 2 In this discussion the term "family" is used to describe both a kinship and an economic relation- ship (e.g., a single adult is considered to be a one-person family). Family income levels are defined as follows:
TRIO GOES liVITHOUT HEALTH INSURANCE? Estimated 42.1 Million Uninsured People = 100.0% At Least 300% FPL 1 15.1% 200% - 299% FPL <100% FPL 36.5% 28.7% 100%- 199% FPL (for 1999, 200% of FPL for Family of 4 = $33,400) 63 Under $10 000 $50,000 and Overt _ 19 20io $40-000- $49,999 7.9% 12.6% $30,000- $39~999 16.1 % $20,000-$29,999 21 .3% $1 o,ooo $1 9,999 FIGURE 3.3 Distribution of uninsured population under age 65, by family income level, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Fronstin, 2000d. percentages of the FPL into dollars allows for a more vivid comparison: almost two of ten uninsured persons are members of families that earn less than $10,000 per year (Fronstin, 2000d). A family of four must have an income greater than 400 percent of FPL (for 1999, $66,800) to have less than a one in ten chance of being uninsured (Figures 3.3 and 3.4) (Custer and Ketsche, 2000b). Higher income does not necessarily mean a lower uninsured rate. Eligibility for most public insurance (means-tested categorical programs) is restricted to spe- cific categories of low- and lower-income persons. Many members of lower- income families are not eligible for public insurance, yet they are not offered nor can they afford to buy employment-based or individual health insurance. In addition, the number and relative sizes of salaries that make up a family's income may determine whether employment-based health insurance is offered at all. A family having a single wage earner with a salary of $50,000 is more likely to have · Low income: an annual income of less than 100 percent of the FPL, which is established on a yearly basis for different types of family groups that comprise a given household, for example, one adult, or one adult and two children; · lower income: an annual income less than 200 percent of FPL; and · moderate income: an annual income between 200 and 400 percent of FPL for a given family group. Table C. 1 (Appendix C) lists incomes at the FPL and multiples of the FPL for individuals and families of different sizes. In 1999, 200 percent of the FPL for one person was an annual income of $16,480, for a family of two, $22,120, and for a family of 3, $27,760.
64 Ct .° At Ct Lo ~ ~ (D O O U) Ct ~ lo TIC O 0D a) a) a) a) lo ~ o O O U. O U. O U. O U. O U. O CO CO C\l C\l ~ ~ (lUeD)ed) aleH pe~nsu!un A_ lo lo CO CO 11 o o Lo Cal o C' . _ IL m o Cal o 5- ~o, 5- Cal ·_4 0 0 ,= 0 0 ~4 .0 Cal All ~ o . . . ~ O ~ U)
TRIO GOES liVITHOUT HEALTH INSURANCE? 65 access to health insurance than is a family with two wage earners, each of whom earns an annual salary of $25,000.3 Federal policies have expanded the income eligibility standards for public insurance for specific categories of lower-income persons. However, only some states have adopted these higher standards. Few states offer enrollment to children in families earning more than 200 percent of FPL or to adults in families earning at least 100 percent of FPL. For this reason, persons from families with earnings between 100 and 199 percent of FPL are almost as likely to go without coverage as are people from families whose earnings are below 100 percent of FPL (Hoffman and Schlobohm, 2000~. Expansions of the Medicaid program from the mid-1980s through the mid-1990s and the introduction of the State Children's Insurance Programs (SCHIP) helped reduce the proportion of lower-income persons with- out health insurance from an estimated 38 percent in 1987 to an estimated 32 percent in 1999. These expansions left unchanged the principle that nondisabled persons ages 18-64 may be eligible for Medicaid only when they are parents living in households with children. Educational Attainment More than one-quarter of all uninsured adults have not earned a high school diploma. Almost four of every ten adults who have not graduated from high school are uninsured. Employment-based health insurance coverage is associated increasingly with the presence of a college degree (Figures 3.5 and 3.6) (Gabel, 1999~. In addition to being positively related to income, the attainment of a college degree is associated with employment in certain sectors and types of jobs that are more likely than others to include a health insurance benefit. Also, the worker's educational level has a small effect on the take-up rate of insurance offers. The decline in employ- ment-based coverage between 1977 and 1998 almost entirely affected primary wage earners who had not graduated from college and their dependents (Gabel, 1999~. Compared with a relatively steady 80 percent employment-based coverage rate for college graduates, high school graduates experienced a 5 percentage point decline in employment-based coverage (from 68 percent to 63 percent insured) between 1977 and 1998. Primary wage earners who did not complete high school experienced an 18 percentage point decline in employment-based coverage rate (from 52 percent to 34 percent) during this same time period. Years of education serve to protect against the loss of insurance for holders of core jobs but not for contingent or recently hired workers (Farber and Levy, 2000~. This pattern is influenced by both labor force and employer characteristics- for example an employer's willingness to offer a health benefit with affordable premiums or a subsidy. Almost seven out of ten workers (69 percent) without a 3This may reflect greater subsidy for higher-waged positions (Morrisey, 1993; Blumberg, 1999).
66 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE Estimated 31.3 Million Uninsured Adults = 100.0% At Least a College Degree 12 Some College Education 24.9% High School Diploma 36.1% Less Than High School 26.8% FIGURE 3.5 Distribution of uninsured adults (ages 19-64 years), by level of educational attainment, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Hoffman and Pohl, 2000. 45, 40: 35: _ - 0' 30- c,, 25- ~ 20- .- 15- 10 - 5~ O: 39.0 21.2 16.4 9.1 . 19.1 Did Not Graduate High School Some College College All Adults High School Graduate Graduate (Ages 19-64 Years) FIGURE 3.6 Probability of being uninsured for adults (ages 19-64 years), by level of educational attainment, 1999. SOURCE: Hoffman and Pohl, 2000.
TRIO GOES liVITHOUT HEALTH INSURANCE? 67 high school diploma are offered employment-based coverage. The take-up rate for this group of workers is 82 percent, only modestly below the overall worker take-up rate of 85 percent. Of those with high school diplomas or less education who are offered and decline coverage however, more than a third (36 percent) remain uninsured, twice the rate of residual uninsurance as that of more highly educated workers who decline workplace coverage. Less educated workers who decline coverage are less likely to gain coverage through a spouse than are more educated workers who decline coverage (Custer and Ketsche, 2000b). The de- cline in employment-based coverage of primary wage earners with less education may be attributed to the expense of coverage, whereas workers with higher educational attainment may have other options for coverage. Job Characteristics There are greater numbers of uninsured blue-collar workers than uninsured white-collar workers. Members of families with a primary wage earner who is blue collar are more likely to be uninsured than are members of families with a white-collar worker. In addition to the job characteristics related to work status, the occupation of a family's primary wage earner influences the likelihood that members will be uninsured (McDonnell and Fronstin, 1999~. Uninsured rates vary dramatically with regard to occupation: while almost half of all wage-earners working in private households (maids and domestic laborers) are uninsured, less than 10 percent of all wage earners in professional jobs are uninsured (McDonnell and Fronstin, 1999~. Employer Characteristics Wage-earners in smaller-sized firms, in lower-waged firms, in non- unionized firms, and in nonmanufacturing employment sectors are more likely to go without coverage. Over the past decade, the overall increase in the number of uninsured persons in working families has reflected a variety of dynamics related to employment- based coverage. There are greater numbers of uninsured workers employed by smaller firms (fewer than 25 employees), compared to larger firms, more em- ployed in predominantly lower-waged or nonunionized firms, and more em- ployed in sales ("wholesale and retail trade") compared to the profile of employers and industries that dominated the U.S. economy in the years after World War II when our present employment-based coverage arrangements became established (Gabel, 1999; Starr, 1982~. Economies of scale for employers in purchasing health benefit plans that is, lower costs per person for larger groups mean that firm size plays a key role in influencing the availability of employment-based coverage (Fronstin, 2000d;
68 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE Estimated 24.2 Million Uninsured Wage Earners = 100.0% Public-sector Employees 6.1% _ Businesses with Fewer Than 1 0 Employees Self-employed _ ~ Undo/ 20.2% Businesses with 1,000 or More Employees 3.3% Businesses with 500- 999 Employees Businesses with 100-499 Employees 1 2.3% Businesses with 10-24 Employees 10.6% Businesses with 25-99 Employees FIGURE 3.7 Distribution of uninsured wage earners (ages 18-64 years), by size of employer's firm, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Fronstin, 2000d. Fronstin and Helman, 2000~.4 Of the six out of every ten uninsured persons who are wage earners, 46 percent are self-employed or work for private-sector firms with fewer than 25 employees; the uninsured rate for this subgroup is 28 percent (Figures 3.7 and 3.8) (Fronstin, 2000d). Firms that have at least 100 employees account for more than one-third of all uninsured workers, reflecting the fact that over 30 percent of the workforce is employed by larger firms. The uninsured rate for wage earners in medium- and larger-sized firms ranges between 12 and 16 percent (Fronstin, 2000d). Greater numbers of uninsured workers and dependents exist where the work- ers are employed by lower-waged, compared to higher-waged firms, and by nonunion firms, compared to union firms (Fronstin, 2000d; Gabel et al., 1999; McDonnell and Fronstin, 1999~. The chance of being uninsured is substantially greater for workers in small- to medium-sized firms (fewer than 200 employees) than for workers in larger firms (Kaiser-HRET, 2000~. When more than one- third of these smaller firms' workers are considered lower-waged (earning less than $20,000 annually), the coverage rate by employers drops to about half (35 percent) of the coverage rate of comparable firms (85 percent) where less than one-third of workers are lower-waged (Kaiser-HRET, 2000~. Since lower-waged workers are more likely to work for smaller firms, this contributes to a sizable disparity be- tween the 43 percent offer rate for lower-waged workers (defined as earning $7 or 4The administrative costs of coverage per capita decrease with the increasing size of the employer's group.
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70 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE Estimated 24.2 Million Uninsured Wage Earners = 100.0% Public Sector 6.1% Personal Services / 19 3% 1' Wholesale and Retail Trade 41 .4% Agriculture, Forestry, Fishing, Mining, and Construction 17.1% Manufacturing 16.1% FIGURE 3.9 Distribution of uninsured wage earners (ages 18-64 years), by sector, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Fronstin, 2000d. less per hour) and the 93 percent offer rate for higher-waged workers (defined as earning more than $15 per hour) (Cooper and Schone, 1997, data for 1996~. The employment sector, such as manufacturing, agriculture or sales, also influences the probability that wage earners and their families will be uninsured (Figures 3.9 and 3.10~. Members of families whose primary wage earners work in sales (wholesale and retail trade) comprise the single largest group of uninsured members of working families, more than four out of ten uninsured people (Fronstin, 2000b). Members of families whose primary wage earner works in sales are also more likely than the general population to be uninsured (22 percent uninsured rate). However, the highest uninsured rate is found among members of families whose primary wage earner works in employment sectors such as agricul- ture, forestry, fishing, mining, and construction. Almost one-third of all workers in this sector are uninsured (Fronstin, 2000d). HOW COVE12AGE VARIES OVER A PERSON'S LIFE The average individual's chance of being uninsured traces an increasing and then decreasing path across his or her life span. This begins with a lower-than-average likelihood for children, a higher-than-average likelihood for young adults, followed by a gradual decline in the probability of being uninsured with advancing age and increasing connection to the labor force. At age 65, one
TRIO GOES liVITHOUT HEALTH INSURANCE? 35 30 - ~_ ~ 25- cat He 32.2 20 - 15- ~ 13.3 10 - O- 71 21.6 15.6 19.1 Agriculture, Manufacturing Wholesale and Fore stry, Fis hing, Retail Trade Mining, and Construction Personal Public Sector All Wage Earners Services (Ages 18-64) FIGURE 3.10 Probability of being uninsured for wage earners (ages 18-64 years), by sector, 1999. SOURCE: Fronstin, 2000d. has a minimal likelihood of being uninsured because Medicare provides nearly universal coverage. Marriage and the rearing of infants and young children both lower the chances, on average, that an adult will be uninsured. Within this broader trend, however, variations in sources of coverage and health status across age cohorts, as well as participation in the labor market, result in important differences. Age Three-quarters of the uninsured are adults (ages 18-64 years), while one-quarter of the uninsured are children. Compared with other age groups, young adults are the most likely to go without coverage. The age distribution of uninsured persons relative to the total population reflects the availability of public programs for children and the decreasing number of uninsured adults in a specific age group as the group grows older. One-quarter of uninsured adults are between the ages of 18 and 24 years; more than one- quarter are between 25 and 34 years old; slightly less than a quarter are between 35 and 44 years; the remaining quarter of uninsured adults is comprised of persons between the ages of 45 and 64 (Figure 3.11) (Fronstin, 2000d). The age distribu- tion of children without health insurance coverage is similar to the age distribution of children in the general population. An estimated one out of every seven children (ages 0-17 years) is uninsured, while almost one out of every five adults (ages 18-64 years) is uninsured (Fronstin,
72 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE Estimated 42.1 Million Uninsured People = 100.0% 55-64 Years 8.1% 45-54 Years 11 .6% 35-44 Years 17.6% 0-5 Years 7.8% 9.oo/o 25-34 Years 20.9% 13-17 Years 6.9% 18-24 Years 1 8.3% FIGURE 3.11 Distribution of uninsured population under age 65, by age group, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Fronstin, 2000d. 2000d). Two groups of adults are of particular concern, young adults (ages 18 through 24 years) because of their high uninsured rate (29 percent) and midlife adults (ages 55 through 64 years) whose uninsured rate is lower than average (14 percent) but whose family incomes have begun to decline, on average, and who have a greater anticipated need for health services (Figure 3.12~. Young Adults [Ages 18 Through 24 Years] Almost three out of every ten young adults do not have health insurance. Members of this age group are nearly twice as likely to be uninsured compared to members of the general population under age 65. This higher-than-average prob- ability has been the case since at least the mid-1980s, and the uninsured rate for this group continues to increase over time (Rowland et al., 1998; Swartz, 1998; Quinn et al., 2000~. Overrepresentation of young adults among the uninsured reflects social, eco- nomic, and demographic factors. Young adulthood is a period of transition from school to work, likely to involve changes that may lead to gaps in health insurance coverage. For young adults who are not wage earners, family income is a key factor affecting their likelihood of being uninsured. Families covered by employ- ment-based health insurance often extend coverage to children who are supported as full-time college students (usually through age 23~. A family's ability to support one or more children as full-time college students usually reflects moderate or higher income levels. Even among full-time college students (6.5 million people),
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74 the uninsured rate is relatively high one out of every five students (about 1.3 million people). Of the remaining 12 million young adults who are not full-time college students, almost two out of five persons are uninsured (Quinn et al., 2000~. Social and economic factors present potential barriers to young adults trying to obtain coverage through employment-based plans. They are more likely to work in smaller firms, more likely to hold entry-level or lower-waged jobs Jess than $10 per hour), and as a result, less likely to receive an offer of employment- based coverage (Custer and Ketsche, 2000b; Quinn et al., 2000~. When health insurance is offered to young employees, it is more likely to require that the employee pay a relatively high proportion of the costs. Take-up rates for young adults are lower than for the adult population overall, although estimates of the difference vary with the data source and age ranges being compared (Cunningham, 1999a; McDonnell and Fronstin, 1999; Custer and Ketsche, 2000b). Nonetheless, young adults do share the views of older adults that health insurance is important, and they cite the cost of premiums as the most important reason for deciding not to enroll in a health plan (Quinn et al., 2000~. Some young people, likely those with no option to buy coverage at work, buy individual coverage. One measure of the value of coverage is the fact that this age group shows a higher-than-average rate for individually purchased coverage (Figure 3.13) (Fronstin, 2000d). Midlife Adults [Ages 55 Through 64 Years] Midlife adults are less likely to go without health insurance than are members of the population overall, yet their risk is of particular concern because of their collective decline in income; their transition in work status from full-time, full- year work to contingent labor or retirement; and their decline in health status, accompanied by increased spending for health services (GAO, 1998; Brennan, 2000~. During 1996, about one-third of midlife adults with family incomes under $10,000 were uninsured. For this age group, the uninsured rate dropped to less than 10 percent only for those whose family income was at least $40,000. Adults between the ages of 55 and 64 are "the largest and most easily identi- fiable segment of the ~medically] high-risk population," accounting for two-thirds of all deaths and more than one-third of all surgical procedures and hospital days among all adults under 65 years of age Jensen, 1992~. This is the age group most likely to report fair or poor health status, the presence of chronic disease, or the presence of a limiting condition or disability Jensen, 1992; Brennan, 2000~. In this age group, women are more likely than men to be uninsured and to suffer worse health (Monheit et al., 2001~. Given this age group's overall health status, the proportion of persons unin- sured would be even higher than observed were it not for higher-than-average rates of enrollment in Medicaid and Medicare by the disabled and higher enroll- ment in individual insurance (GAO, 1998; Brennan, 2000~. While uninsured midlife adults are more likely than other adults to purchase individual policies,
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76 COVERAGE MATTERS: INSURANCE AND HEALTH CARE they are also more likely to find these policies unaffordable (due to medical underwriting for individuals and experience rating for the age group), inadequate (e.g., preexisting conditions may be excluded from coverage), or unavailable (GAO, 1998~. Men are significantly more likely to be covered by employment- based insurance and Medicare (when certified as being permanently disabled or as having end-stage renal disease), while women are significantly more likely to be covered by individual policies and by Medicaid (Brennan, 2000~. Women's lower incomes contribute to greater Medicaid eligibility (Wyn et al., 2001~. Widening gaps in employment-based retiree health coverage mirror the over- all decline in employment-based coverage. Over the past decade, there has been a decline in the number of large firms offering health insurance coverage to retirees (Fronstin, 2001~. A December 1990 change in standard accounting practice (Fed- eral Accounting Standard 106) has made explicit and transparent to investors the large unfunded liabilities inherent in employers' promises of retiree benefits, dis- couraging employers from offering a health insurance benefit to new retirees (GAO, 1998; Fronstin, 2001~. Wage-earners who retire before age 65 because of a health condition may find themselves uninsured if their employer does not offer retiree coverage, if the cost to continue enrollment in the employer's plan is prohibitive, or if individual insurance coverage is too costly or not available. Children Federal and state policies have given high priority to providing health insur- ance opportunities for children, yet the uninsured rate for children is almost 14 percent and an estimated two-thirds of all uninsured children are believed to be eligible for public insurance (Broaddus and Ku, 2000; Mills, 2000~. Between 1977 and 1996, the uninsured rate for children rose, consistent with the decline in employment-based coverage for adults over the same period (Weinick and Monheit, 1999~. From 1994 through 1998, half of the increase in the number of uninsured children consisted of children from lower-income fami- lies Tess than 200 percent of FPL) and the other half from families with at least a moderate income level (at least 200 percent of FPL) (Holahan and Kim, 2000~. Between 1998 and 1999, when the coverage rate improved for the first time in more than a decade, children accounted for 60 percent (1 million people) of the overall decline in the total number of uninsured people (Guyer, 2000~. Since 1995 there has been a decline in the proportion of children covered by Medicaid, reflecting the impact of the 1996 welfare reform that uncoupled Med- icaid eligibility and enrollment from public income assistance (Broaddus and Ku, 2000~. Independent of the economic prosperity that began in the mid-1990s, welfare reform is estimated to have caused a decline in public health insurance coverage of between 8 and 13 percentage points for children from low-income families (less than 100 percent of FPL) (Guyer, 2000; Kronebusch, 2001~. Some of the losses in Medicaid coverage for children from lower-income families have been recouped by SCHIP (Guyer, 2000~. Medicaid now covers one
TRIO GOES liVITHOUT HEALTH INSURANCE? 77 in four children overall. Nonetheless almost all lower-income uninsured children (7 million) are eligible for either Medicaid or SCHIP (Broaddus and Ku, 2000~. There are continuing problems with program outreach, enrollment, and mainte- nance of enrollment (Broaddus and Ku, 2000; Cunningham and Park, 2000~. By 2002, all low-income children (family income less than 100 percent of FPL) should be eligible for public insurance under either Medicaid or SCHIP (Broaddus and Ku, 2000~. It is anticipated that SCHIP will reduce the proportion of children who are uninsured as states more fully implement their programs and if current funding streams are maintained or expanded (Selden et al., 1999~. Marital Status There are more unmarried than married adults among the ranks of the uninsured. Unmarried persons are much more likely than are those who are married to be uninsured. Marriage often serves as a protective factor against being uninsured; 29 per- cent of uninsured adults are married, while 35 percent of uninsured adults report themselves as never having been married and 11 percent report themselves as being divorced (Rhoades and Chu, 2000~. If both spouses in a married couple are wage earners, they have two potential chances to obtain coverage, through one spouse's employer or the other's. Furthermore, the family income of married couples, like that of two-parent families, may reflect the contribution of more than one wage-earner, giving a potential economic advantage in comparison with the family incomes of single people and single parents. As a result, married couples may be more likely to find that health insurance premiums are affordable (Figure 3.14~. The uninsured rate for two single adults living together (35 percent) is higher than the uninsured rate either for single adults living alone (16 percent) or for married adults without children (17 percent) (Hoffman and Schlobohm, 2000~. Young adults are less likely to be married and, thus, less likely to have the chance to obtain coverage through a spouse. Only 15 percent of young adults ages 19 to 23 years are married and 3 percent are covered by their spouse (Quinn et al., 2000~. For people aged 24 to 29 years, almost half are married and 11 percent receive insurance coverage through a spouse, compared to those ages 30 to 64, of whom two-thirds are married and 18 percent are covered by a spouse's policy. Family Composition More than half of all uninsured persons are members of families that include children, and more than half of all uninsured children live in two-parent families, comparable to their numbers in the general popu- lation. However, individuals in families without children are more likely to go without coverage than those in families that include children. The fact that families with children are more likely to be insured may reflect the slower rate of increase in insurance premium costs over time for employment-
78 35 - 30 - _~ 25- c' ~ 20- in . _ 10 - 5- O- CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE 32.8 26.4 13.3 24.6 26.8 19.1 Mamed Widowed Divorced Separated Never All Adults Mamed (Ages 18-64) FIGURE 3.14 Probability of being uninsured for adults (ages 18-64 years), by marital status, 1999. SOURCE: Rhoades and Chu, 2000. based family coverage (Figures 3.15 and 3.16) (GAO, 1 997a; GAO, 1 997b). The uninsured rate for lower-income households is lower for families with children because some or all of the children may be eligible for and enrolled in Medicaid and SCHIP. Between 1976 and 1996, there was little change in children's uninsurance rates among two-parent working families, but there was an 8 percent- age point increase in the uninsured rate for children in single-parent working families (Weinick and Monheit, 1999~. Single parents tend to be young adults, which compounds the likelihood that they will lack coverage. Eligible children are more likely to participate in Medicaid if all family members have the opportu- nity to obtain coverage (Broaddus and Ku, 2000~. However, 14 percent of all families with children are only partially insured (one or more members uninsured) and 10 percent are entirely without coverage (Hanson, 2001~. Lower-income parents face income and other eligibility criteria that may prevent them from qualifying for Medicaid, although their children may be cov- ered. This may result in a family being partially insured. Since welfare reform in 1996, lower-income parents have been losing insurance coverage, with the de-
TRIO GOES liVITHOUT HEALTH INSURANCE? Estimated 42.1 Million Uninsured People = 100.0% Multigenerational Family, With Children Single Adult, No Children 2 Parents, With Children 32.1% Single Parent, With Children 1 3.8% More Than 1 Adult, No Children 38.0% FIGURE 3.15 Distribution of uninsured population under age 65, by family compost tion, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Hoffman and Pohl, 2000 40 - 35 - 30 - a) a, 25- a) ~ 20- a) . _ 15 - 10 - 5 - 33.9 Families Without Children 15.5 15.7 79 Families With Children 33.8 20.2 17.5 12.4 O- ~ , ~ , ~ , , 1 1 , 1 ''''''''''''''I , I''''''''''''''''''''''''''''] Single Adults Married Single Living Together Multi- 1 Parent 2 Parents General generational Population and Other Under Age 65 FIGURE 3.16 Probability of being uninsured for population under age 65, by family composition, 1999. SOURCE: Hoffman and Pohl, 2000.
80 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE cline in public coverage greater than the increase in employment-based coverage. The impact falls disproportionately on lower-income mothers (Guyer and Mann, 1999; Garrett and Holahan, 2000; Klein, 2000; Guyer et al., 2001~. Only 33 percent of women who move from public assistance to employment obtain cov- erage through their employer (Garrett and Holahan, 2000~. Among low-income people Tess than 100 percent of FPL), working parents are twice as likely to be uninsured as nonworking parents because nonworking, single parents often have very young children and are more likely to have Medicaid coverage (Guyer and Mann, 1999~. OTHER DEMOGRAPHIC DISPARITIES IN COVERAGE The nature and type of labor force participation determine whether individuals and family members obtain employment-based coverage. Foreign-born persons and members of ethnic and racial minority groups are more likely than average to be uninsured, although their smaller numbers in the general population mean that uninsured rates overall are dominated by the rates for U.S.- born citizens and non-Hispanic whites. Immigrant Status and Nativity Most uninsured people are U.S. citizens by birth (native-born resi- dents comprise about 90 percent of the general population). The rela- tively small proportion of the general population comprised of natural- ized citizens and noncitizens (immigrants) is significantly more likely than U.S.-born residents to be uninsured, although immigrants' unin- sured rates decline with increasing length of residency in the United States. Residency status, family income, and length of residency in the United States are important influences on the likelihood that a person will lack insurance cover- age (Carrasquillo et al., 2000~. Foreign-born residents of the United States (in- cluding naturalized citizens, legal permanent residents, legal temporary residents, refugees, and undocumented immigrants) are almost three times as likely as U.S.- born residents to be uninsured, and among the foreign-born, noncitizens are more than twice as likely as citizens to be uninsured (Figures 3.17 and 3.18) (Mills, 2000~.5 Foreign-born residents are a relatively small proportion, about 10 percent, of the general population under age 65.6 The declining uninsurance rate for 5Studies of immigrants' insurance status have only recent data to draw on, since the Census Bureau's Current Population Survey began collecting information about country of origin, date of arrival, and citizenship status in 1994 (Carrasquillo et al., 2000). 6The most recent Immigration and Naturalization Service estimate of the undocumented immi- grant population is about 5 million people (as of October 1996). The annual growth in this number
TRIO GOES liVITHOUT HEALTH INSURANCE? Estimated 42.1 Million Uninsured People = 100.0% Non-citizens Who Have Resided in U.S. Less Than 6 Years Naturalized Citizens 5.7% 4.4% Non-citizens Who Have Resided in U.S. at Least 6 Years 1 1 9°/n 81 U.S.-Born Citizens 78.0% FIGURE 3.17 Distribution of uninsured population under age 65, by immigrant status and nativity, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Hoffman and Pohl, 2000. immigrants with longer residence in the United States means that they contribute a relatively modest number and proportion to the overall growth in the uninsured population (Holahan et al., 2001~. Disparities in uninsured rates between immigrants and native-born U.S. resi- dents reflect the lower rates of employment-based coverage among immigrants, which in turn is linked to greater-than-average likelihood employment in lower- waged positions (paying $7 or less per hour) and work in employment sectors with lower-than-average coverage rates (Carrasquillo et al., 2000~.7 Among full-time wage earners, 51 percent of noncitizen immigrants had employment-based cover- age, compared with 76 percent of naturalized citizens and 81 percent of U.S.-born residents. Even among the lowest-waged full-time workers (earning less than $15,000 annually), 27 percent of noncitizen immigrants have employment-based is projected to be approximately 275,000 persons per year (INS, 2001). This number represents about 1.9 percent of the general U.S. population for 1996. There is little published national data about uninsured rates among undocumented immigrants. Studies that have evaluated local experiences with undocumented persons find that uninsured rates are much higher than for legal immigrants (Berk et al., 2000). For example, Project HOPE's 1996-1997 Hispanic Immigrant Health Care Access Survey of 972 undocumented immigrants in four cities (E1 Paso, Houston, Los Angeles, and Fresno) estimated an uninsured rate between 68 percent and 84 percent (Schur et al., 1999). 7This study followed immigrants from the 16 countries that contribute the largest numbers of immigrants to the United States.
82 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE 60 - 50 - A' 40- ct if: u) ._ 30 - 20 - 10 - 50.5 41.6 O ~ , ~ , · . ~ 17.5 Non-citizen, Non-citizen, U.S. Naturalized U.S.-bon' residing <6yrs residing>6 yrs Citizen Citizen Ge ne ral Population Under Age 65 FIGURE 3.18 Probability of being uninsured for population under age 65, by immigrant status and nativity, 1999. SOURCE: Hoffman and Pohl, 2000. coverage, compared to 58 percent of U.S.-born residents (Carrasquillo et al., 2000~. There is much variation in uninsured rates, reflecting the employment- based coverage of the sectors in which specific immigrant groups tend to concen- trate. For example, there are concentrations of Mexican immigrant workers in agriculture, which has a higher-than-average uninsured rate, while Filipino immi- grants often work in the health care industry, which has a lower-than-average uninsured rate. For members of families headed by foreign-born persons who are not offered employment-based insurance and who are priced out of the individual insurance market, restrictive immigration and welfare policies enacted in the past five years have made public coverage increasingly difficult, if not impossible, to obtain. Since 1996, welfare and immigration reform legislation have banned legal immi- grants who arrive after August 1996 from eligibility for Medicaid, SCHIP, and other federal means-tested benefits programs for their first five years in the United States, except for the financing of emergency care, with exceptions made for specific categories of persons including refugees (Rosenbaum, 2000~.8 8With regard to Medicaid, the specific legislation includes the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as amended by the Illegal Immigration Reform and Immi- grant Responsibility Act of 1996. The Balanced Budget Amendments Act of 1997 that established SCHIP excluded recently arrived (after August 1996) legal immigrant children from eligibility (Rosenbaum, 2000).
TRIO GOES liVITHOUT HEALTH INSURANCE? 83 Both by design and in unintended ways (what many commentators describe as the "chilling effect" of the 1996 federal legislation), there was a steady decline in public coverage for lower-income, noncitizen immigrants between 1996 and 1999, contributing to an 8.5 percentage-point increase in their uninsured rate and a similar increase (8 percentage points) in the uninsured rate for U.S.-born chil- dren of legal immigrant parents (Ku and Matani, 2001~. Children in immigrant families are more likely to be uninsured, whether or not their parents are citizens, although a child's status as a citizen reduces somewhat the probability of being uninsured (Brown et al., 1999~. In lower-income working families, almost 20 percent of all U.S.-born children are uninsured, while slightly more than 50 percent of all foreign-born children are uninsured (Guendelman et al., 2001~. Race and Ethnicity Non-Hispanic whites comprise about half of the uninsured, reflect- ing their majority in the general population. Non-Hispanic African Americans are twice as likely, and Hispanics three times as likely, as whites to be uninsured. Higher uninsured rates among members of racial and ethnic minority groups are a consequence of lower rates of employment-based coverage and higher proportions of lower-income families within each group (Figures 3.19, 3.20, and 3.21~. These rates are only partially offset by higher rates of public insurance coverage (Gabel, 1999; Brown et al., 2000a; Monheit and Vistnes, 2000; Shi, 2000b). Since the late 1970s, members of racial and ethnic minority groups have experienced a disproportionate decline in employment-based coverage (Gabel, 1999~. For Hispanics, the declining rate also reflects changes related to declining family income levels and lower levels of educational attainment (Monheit and Vistnes, 2000~. These changes are related to a shift in composition of the Hispanic population, with an increasing proportion comprised of immigrants from Central America and Mexico (Gabel, 1999; Monheit and Vistnes, 2000~. Hispanics More than one-third of all Hispanics under age 65 are uninsured. Mirroring the uninsured population as a whole, more than one-half of uninsured Hispanics are members offamilies with at least one full-time, full-year worker, and more than eight out of ten are members of households with at least one part-time worker (Quinn, 2000) . From 1987 through 1996, the number of uninsured His- panics nearly doubled, reflecting both population growth and the decline of employment-based coverage (Monheit and Vistnes, 2000; Quinn, 2000~. The high uninsured rate for Hispanics reflects the fact that Hispanic wage earners are much less likely than average to be offered employment-based cover- age and slightly more likely than non-Hispanic whites to decline to take up the offer (Cunningham, 1999a; Schur and Feldman, 2001~. Since the mid-1970s,
84 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE Estimated 42.1 Million Uninsured People = 100.0 Asian American American Indian 5.2% 1.8% Non-Hispanic African American 17.1% Hispanic 25.8% Non-Hispanic White 50.2% FIGURE 3.19 Distribution of uninsured population under age 65, by race and ethnicity, 1999. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Hoffman and Pohl, 2000. 40 35 - 30 - c' ct in He 10- 5 - 25 - 20 - 15- O - 35.0 32.8 22.8 22.0 12.7 Hispanic American Indian Non-Hispanic Asian-American Non-Hispanic General and Alaska African and South Pacific White Population Under Native American Islander Age 65 FIGURE 3.20 Probability of being uninsured for population under age 65, by race and ethnicity, 1999. SOURCE: Hoffman and Pohl, 2000.
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86 COVERAGE MATTERS: INSURANCE AND HEALTH CARE Hispanic male wage earners uniquely have experienced a decline in offer rates for employn~ent-based coverage (Monheit and Vistnes, 2000~. Non-Hispanic whites in smaller firms are twice as likely to be offered coverage as are Hispanics (Quinn, 2000~. The high uninsured rate for Hispanics also reflects a lower-than-average rate of public coverage for members of lower-income families. In families that earn less than the FPL, 45 percent of all Hispanics are uninsured, compared with 32 percent of non-Hispanic whites (Fronstin, 2000d). In Hispanic families, 49 percent of members are covered by employment- based insurance plans: 59 percent are offered the chance to purchase coverage, and 83 percent take up this offer to enroll (Custer and Ketsche, 2000b). For members of families in which the primary wage earner is not offered employment-based coverage, 10 percent obtain employment-based coverage through other means, 2 percent purchase individual coverage, 23 percent obtain public insurance and 66 percent remain uninsured. For family members of primary wage earners who decline to purchase employment-based coverage, 34 percent receive employ- ment-based coverage through other fancily members, 3 percent purchase indi- vidual coverage, 17 percent receive public insurance, and 46 percent remain uninsured (Custer and Ketsche, 2000b). The age distribution of Hispanics contrib- utes to the high numbers of uninsured; the Hispanic population has a higher proportion of younger persons than older ones, and more than half of all Hispanic young adults go without health insurance (Hoffinan and Pohl, 2000; Quinn, 2000~. Social and economic factors and nativity jointly contribute in important ways to the uninsured rate of the Hispanic population, because a significant proportion of this group are foreign-born or members of immigrant households. Among adult male wage-earning Hispanics, for example, Puerto Ricans and Cuban Americans have similar rates of private coverage, although Puerto Ricans have a higher employment-based coverage rate while Cuban Americans have a higher rate of individually purchased coverage (Fronstin et al., 1997~. Mexican Americans have the lowest rate of private coverage compared to Puerto Ricans and Cuban Arneri- cans, reflecting lower wage levels and lower levels of education on average for Mexican Americans. In addition, Hispanics who identify themselves as noncitizens are more than twice as likely to go without health insurance (58 percent uninsured rate) as Hispanic citizens (27 percent uninsured rate) (Brown et al., 2000a). If Hispanic children as a group had comparable citizenship and immigration status, parental educational attainment, work status, and furrily income as the rest of the popula- tion under age 18, they would still be more likely to be uninsured than non- Hispan~c white, Afncan-Amencan, and Asian-Amencan children (Wein~ck et al., 2000~. American Indians and Alaska Natives Almost one-third of all American Indians and Alaska Natives are R01200_B1493--03 Uninsure Errat 36 7/9/03, 3:50 PM
TRIO GOES liVITHOUT HEALTH INSURANCE? 87 uninsured, a rate almost as high as that for Hispanics. There is little about the distinctive experiences of American Indians and Alaska Natives in the litera- ture discussing insurance status and the uninsured population. There are few published population-level studies, and the survey data on which these studies are based may be weakened by small sample size since there are only 2.4 million self- identified American Indians and Alaska Natives (roughly 1 percent of the U.S. population); by inconsistencies in identifying and coding ethnic identity; and by a wide geographic range of residence (Brown et al., 2000a). It is important to note that in addition to or instead of insurance, some receive services directly through the Indian Health Service. This high uninsured rate for Native Americans reflects a lower rate of em- ployment-based coverage, higher-than-average unemployment rates, and lower- than-average wages for those who are employed. These three factors are only partially offset by a higher-than-average rate of public coverage by Medicaid and SCHIP. The federal Indian Health Service (IHS) delivers health care directly to persons who are recognized as American Indians or Alaska Natives. These services reach only about 20 percent of this population, mainly persons who live on reservations, who reside near the few urban IHS facilities around the country, and who belong to tribes that are federally recognized. The relatively low proportion of persons who obtain services from IHS reflects in part the predominantly urban location of this population (Brown et al., 2000a). Among Native Americans, 51 percent have employment-based coverage, compared with 73 percent of non- Hispanic whites, and individual insurance coverage is at one-fifth the rate of that for non-Hispanic whites (Brown et al., 2000a). About 17 percent of Native Americans have Medicaid, almost three times the rate of non-Hispanic whites (6 percent), reflecting the fact that Native Americans are about twice as likely to be members of lower-income families (Brown et al., 2000a). Yet almost half of all lower-income families in this group were uninsured, about twice the uninsured rate for lower-income families generally. African Americans Non-Hispanic African Americans are almost twice as likely as non- Hispanic whites to be uninsured (Fronstin, 2000d). From 1987 through 1996, the number of uninsured African Americans wage earners grew by 4.5 percentage points and the employment-based coverage rate declined, particularly for women wage earners (Monheit and Vistnes, 2000~. Subsequent overall gains in employment-based coverage between 1994 and 1997 did not lower this uninsured rate substantially (Brown et al., 2000a). Much of the high uninsured rate for African Americans is a consequence of a lower rate of employment-based coverage, even though primary wage earners in African-American families tend to work for larger-sized firms and in employment sectors with higher coverage (Brown et al., 2000a). In African American working families, 65 percent of their members have employment-based coverage: 77 per-
88 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE cent are offered the chance to purchase coverage, and 86 percent take up this offer to enroll (Custer and Ketsche, 2000b). When employment-based coverage is not offered, 2 percent purchase individual coverage, 37 percent are covered by public insurance, and 49 percent remain uninsured. When a primary wage earner de- clines job-based coverage, 31 percent of family members obtain employment- based coverage through another family member, 3 percent purchase individual coverage, 29 percent obtain public insurance, and 37 percent remain uninsured (Custer and Ketsche, 2000b). When a family's primary wage earner has obtained employment-based coverage, the employment-based coverage rate for dependents is lower for African-American family members than for Hispanics (34 percent versus 43 percent, respectively) and the public coverage rate is higher (9 percent versus 5 percent) (Custer and Ketsche, 2000b). A lower proportion of African- American families have at least one full-time, full-year wage earner (58 percent, compared with 71 percent for non-Hispanic whites). Across all firm sizes, African Americans have lower employment-based coverage rates than non-Hispanic whites, with the disparity ranging from 14 to 30 percentage points (Brown et al., 2000a). Across employment sectors, African Americans have lower employment- based coverage rates than non-Hispanic whites. For sectors with lower coverage such as agriculture and sales, 45 percent of African Americans are covered com- pared with 66 percent of non-Hispanic whites. For higher-coverage sectors such as manufacturing and professional services, 72 percent of African Americans are covered, compared with 86 percent of non-Hispanic whites (Brown et al., 2000a). Over time, African-American men have had a declining take-up rate for employ- ment-based coverage, in comparison to non-Hispanic whites (Cunningham, 1999a; Custer and Ketsche, 2000b). This may reflect the increasing unaffordability of health insurance premiums for lower-income working families (Monheit and Vistnes, 2000~. The higher-than-average rate of public coverage for African Americans off- sets some but not all of the disparity in employment-based health insurance coverage. This public coverage rate reflects the fact that 47 percent of all African Americans under age 65 are members of lower-income families, compared to about 20 percent of all non-Hispanic whites (Fronstin, 2000d). Public coverage rates are comparable for members of lower-income families, whether African American or non-Hispanic white, although African-American children have a higher participation rate in Medicaid (Brown et al., 2000a; Mills, 2000~. African- American families with moderate or higher income levels, however, remain al- most twice as likely as white non-Hispanics to be uninsured (Fronstin, 2000d). Asian Americans and Pacific Islanders There are disproportionately high uninsured rates among some eth-
TRIO GOES liVITHOUT HEALTH INSURANCE? 89 nic groups collectively described as Asian American and Pacific Is- lander, reflecting the particular group's distinctive social, economic, and demographic characteristics and members' status as immigrants, refu- gees, or U.S.-born citizens (Brown et al, 2000a, Hoffman and Pohl, 2000~. Rates for employment-based health insurance coverage vary considerably, with lower rates for Koreans and Vietnamese (and uninsured rates correspondingly high, greater than 30 percent) and higher rates for Japanese and families with residency extending over multiple generations (Carrasquillo et al., 2000~. Gener- ally, for Asian Americans and Pacific Islanders the rates of public insurance (Med- icaid) are lower than those for other racial and ethnic groups, except for Southeast Asians, whose refugee status allows them to obtain public insurance coverage (Brown et al., 2000a). Gender More men than women are uninsured, and men are more likely than women to be uninsured. Gender disparities in insurance coverage reflect the different experiences of men and women in the workplace and with public policies. There are more uninsured men (ages 18 through 64 years) than women, although women have a lower rate of employment-based coverage (Fronstin, 2000d). More women, on average, are eligible for public insurance because of their lower average income level and the greater likelihood that they may qualify for Medicaid during preg- nancy or as the parent of infants and young children (Short, 1998~. Most adults with Medicaid are women in lower-income families, for the most part pregnant women or the mothers of young children (Wyn et al., 2001~. While fewer women than men go without coverage entirely, the greater number of women with individual insurance coverage and the higher number of women covered by public insurance are cause for concern, because such coverage tends to be un- stable, thus creating more opportunities for gaps in coverage. (Miles and Parker, 1997; Fronstin, 2000d). Both income and marital status are important influences on the likelihood that wage-earning women will be uninsured (Buchmueller, 1996-1997; Short, 1998~. Single women are more likely to be offered employment-based health insurance than are single men (an offer rate of 78 compared to 72 percent), whereas married women are somewhat less likely than married men to be offered employment-based coverage. Lower take-up rates among married women wage earners, compared to married male wage earners (63 percent versus 72 percent) are a consequence of the greater likelihood that married women are insured as depen- dents on their spouse's health insurance policy (Buchmueller, 1996-1997, based on 1993 Current Population Survey data).
So CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE HOW GEOGRAPHIC DIFFERENCES AFFECT COVERAGE The decentralized labor and health services markets in the United States, and the distinct public policies in each state and locality, together create unique contexts for the patterns already described for individuals and popu- lation groups. Differences among states with respect to population characteristics, industrial economic base, eligibility for public insurance, and relative purchasing power of family incomes shape the geographic disparities in insurance coverage rates (Marsteller et al., 1998; Rowland et al., 1998; Brown et al., 2000b; Cunningham and Ginsburg, 2001~. Region and State The South and the West, the most populous regions, are home to the greatest numbers of uninsured persons (an estimated 17 million and 12 million, respectively). Residents of these regions are more likely than average to be uninsured. The pattern is similar for persons at all income levels: Southerners and West- erners are more likely to be uninsured than are those who live in the North and Midwest (Figures 3.23, 3.24, and 3.25) (Fronstin, 2000d; Mills, 2000~. Uninsured residents of California and Texas comprise more than one-quarter of the total number of uninsured persons, an estimated 12 million people (Hoffman and Pohl, 2000~. New York and Florida are the third and fourth most populous states, respectively; their uninsured residents account for almost one-fifth of uninsured persons nationally. The remaining 47 jurisdictions (including the District of Co- lumbia) are each estimated to contribute less than 4 percent of the total number of uninsured persons nationally. There is much to be learned about what influences regional variation in uninsurance rates. A multivariate analysis of 60 communities across the United States, whose uninsured rates ranged from 5 to 29 percent, found that "population characteristics, employment, and unexplained or unmeasured geographic varia- tions account for most of the differences" (Cunningham and Ginsburg, 2001~. About one-third of the variation in uninsured rates is attributable to a combination of differences in racial and ethnic group composition (18 percent) and a combina- tion of income and education (14 percent). About one-quarter of the difference is explained by employers' characteristics (21 percent) and employment rates (6 percent). Only about 13 percent of the difference among uninsured rates is ex- plained by differences in Medicaid eligibility guidelines among the states. Urban and Rural Areas Reflecting the predominantly urban concentration of the U.S. popu- lation, most uninsured persons live in urban areas. Rural and urban residents, however, are about equally likely to be uninsured.
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94 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE More than four times as many uninsured persons live in urban as in rural areas, yet rural and urban residents have about the same chance of being uninsured (Figure 3.25~.9 As with other types of geographic comparisons, these general at- tributes mask underlying differences in local economies, health services infrastruc- ture, public policies, and population characteristics that distinguish urban from rural areas (Hartley et al., 1994; Ormond et al., 2001~. Although uninsured resi- dents of rural areas are fewer in number, their presence is no less a concern. Similar to the overall trend in the 1990s, the number and proportion of uninsured among rural residents has increased (Pol, 2000~. Rural and urban areas differ in the mix of sources of coverage for their residents, with a higher private coverage rate in urban (71 percent) than in rural (68 percent) areas and a higher public coverage rate in rural areas (14 percent) compared to urban (11 percent) areas (Rhoades and Chu, 2000~. The difficulties that small businesses face in purchasing affordable health insurance policies for their employees account for much of the disparity in coverage between rural and urban wage earners (Coburn et al., 1998; Mueller et al., 1998; Pol, 2000~. In addition, rural uninsured workers are more likely to be employed by lower-waged firms, to work on a contingent basis, and to work in particular employment sectors (e.g., agriculture) with lower-than-average coverage rates. Even though there are greater numbers of lower-income uninsured persons among urban than among rural residents, rural uninsured workers are even more likely than their urban counterparts to earn relatively lower wages and to be members of lower-income families. For urban areas, uninsured rates vary not only with differing population densities but also with the socioeconomic status of residents and with the presence of sizable immigrant communities (Brown et al., 2000b). The uninsured rates for the 85 largest metropolitan statistical areas (MSAs) range from 7 percent (Akron, Ohio, and Harrisburg, Pennsylvania) to 37 percent (E1 Paso, Texas) and employ- ment-based coverage rates vary between 84 percent (Milwaukee, Wisconsin) and 49 percent (E1 Paso, Texas) (Brown et al., 2000b, based on 1997 data). Compared to the national average uninsured rate, 27 of these urban areas have significantly lower rates, while 12 have significantly higher rates. 9Definitions of urban and rural are not uniform. Differences in definitions and in survey methods may give differing estimates of the numbers of uninsured persons. The current Population survey cPs) does not include a single variable to distinguish urban from rural areas. · For the latter half of the 1990s, cPs data give higher uninsured rate estimates for urban com- pared with rural areas, while Medical Expenditure Panel survey data give higher uninsured rate estimates for rural areas (Pol, 2000). · There are two common and distinct ways to distinguish between urban and rural areas, one devised by the Offfice of Management and Budget and the other used by the cPs (Ricketts et al., 1999). In addition, there are coding schemes that differentiate among metropolitan statistical areas (MSAs), areas adjacent to MSAs, and areas that are not adjacent to MSAs (rural areas).
TRIO GOES liVITHOUT HEALTH INSURANCE? Estimated 43.8 Million Uninsured People = 100.0% Rural 1 8.5°~ Northeast Midwest (Estimated (Estimated 7.2 Million Uninsured) 7.6 Million Uninsured) Rural 8.7% An' Rural 25.1 Rural 24.7, 95 81 .5% U than South (Estimated 17.1 Million Uninsured) West (Estimated 12.0 Million Uninsured) Rural 11.3: U than 91 .3% U than 74.9% U than 75.5% U than 88.7% FIGURE 3.25 Distribution of uninsured population under age 65, by population density (rural or urban), 1998. NOTE: Numbers may not add to 100.0 percent due to rounding. SOURCE: Pol, 2000. In MSAs with higher-than-average uninsured rates, a smaller proportion of people are wage earners and greater proportions of wage earners are employed in smaller firms. In addition, rates of unionization are lower, and greater proportions of wage earners are in employment sectors with relatively high uninsured rates, such as sales. The immigrant status of residents distinguishes MSAs with high uninsured rates from those with low uninsured rates. MSAs with high rates tend to have larger immigrant communities than those with low rates.l° Urban areas with high uninsured rates are home to greater proportions of people in lower-income families, and there is greater income inequality among residents (Brown et al., 2000b). Members of lower-income families are even more likely to be uninsured if they live in cities with high uninsured rates than they would be if they lived in cities with low uninsured rates (Brown et al., 2000b). Lower-income residents in urban areas with high uninsurance have a 30 percent employment-based coverage rate, compared with a 50 percent rate for those who 10These areas include Arizona (Phoenix-Mesa, Tucson), California (Los Angeles), Florida (West Palm Beach, Miami, Fort Lauderdale, Tampa), New Jersey Jersey City), New York (New York), and Texas (E1 Paso, Dallas).
96 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE live in areas with low uninsured rates, and this disparity across urban areas remains even when racial and ethnic group identity and citizenship status are taken into account. WHAT INFLUENCES AN UNINSURED RATE THE MOS" If all things were equal, how much of the difference between uninsured rates could be attributed solely to social or economic characteristics or to differences in immigrant status or race and ethnicity? If all states were home to populations with similar characteristics, how much variation among the states in uninsured rates can be attributed to regional and local differences in industrial economies and health services markets or to state policies for public programs? In this report, the discussions so far have been based on two-way compari- sons, for example, between income level and the likelihood of being uninsured. These comparisons give us a general picture of the dynamics of insurance coverage but do not allow us to evaluate or rank the relative importance of one factor independently of all others. By using more sophisticated (multivariate) statistical methods, we can look at the influence of one or more characteristics at a time on the uninsured rate and better understand their distinct influences.l1 For example, both young adults and never married single persons have higher-than-average probabilities of being uninsured. Multivariate methods allow us to isolate the effect of youth from that of having never married. In the multivariate analysis carried out by the Committee, much of the variation in uninsured rates among individuals and among population groups is associated with the following measured characteristics: income, occupation, em- ployment sector and firm size of employer, education, health status, age, gender, race and ethnicity, citizenship status, and geography. However, large and statisti- cally significant differences in uninsured rates remain after this analysis, and the variation in uninsured rates among population groups is not eliminated com- pletely. For example, if Hispanics had the same probability of being uninsured as non-Hispanic whites with similar characteristics (except for ethnicity), the unin- sured rate for Hispanics, which is about 22 percentage points higher than the uninsured rate for non-Hispanic whites, would be predicted to shrink to about a 7 percentage-point difference. The 15 percentage-point difference between the actual and predicted uninsured rates represents about a two-thirds decrease; thus, an estimated two-thirds of the difference in rates can be accounted for by differ- ences in each group's measured socioeconomic, demographic (except for ethni- 1lThe small number of published multivariate statistical analyses in the research literature address more limited sets of questions than those explored by the Committee in its analysis presented here. See Appendix D for information about analysis and data.
TRIO GOES liVITHOUT HEALTH INSURANCE? 97 city), health status, and geographic characteristics. The remaining difference be- tween the two uninsured rates reflects unmeasured differences between these two population groups. Differences in family income level account for a substantial portion of the difference in uninsured rates among groups in the general population. According to the Committee's multivariate analysis, the difference in uninsured rates be- tween low-income families Tess than 100 percent of FPL) and families with at least a moderate income (at least 200 percent of FPL) would decrease by one-third if these families resembled one another demographically, geographically, and in terms of health status.l2 The level of educational attainment of a family's primary wage earner has an even larger independent effect. More than 40 percent of the difference in unin- sured rates between families with primary wage earners who have not graduated from high school and families whose primary wage earners have post-college education would be eliminated if these families resembled one another demo- graphically, geographically, and in terms of health status.l3 Immigrant and nativity status have a pronounced influence on differences in uninsured rates among groups. Nearly 60 percent of the difference between uninsured rates for U.S.-born residents and naturalized citizens would disappear if naturalized citizens as a group shared the socioeconomic, demographic, health status, and geographic distribution characteristics of the U.S.-born population.l4 Differences between uninsured rates diminish when multivariate analysis is used to compare the population of long-term residents who are not citizens with persons born in the United States (a 26 percent decrease) and between short-term residents who are not citizens and U.S.-born residents (a 50 percent decrease). Race and ethnicity play a significant role, both independently and together with immigrant and nativity status. If non-Hispanic African Americans as a group had the same measured characteristics as non-Hispanic whites, the difference between the uninsured rates for the two groups would decrease by roughly half.l5 When immigrant status is considered in addition to race and ethnicity, the size of these differences among the groups diminishes but remains significant. Differences in state uninsured rates shrink considerably if variations in the socioeconomic, demographic, and health status characteristics within each state's population are taken into account.l6 Given the limits of any statistical model, one would not expect differences among the states' uninsured rates to disappear completely. One See Appendix D for information about analysis and data. See Appendix D. See Appendix D. See Appendix D. 16The differences among uninsured rates for states reflect differences in individuals' characteristics rather than differences among states considered as a whole. See Appendix D for data and information about methods.
98 CO VERA GE MA TTERS: INSURANCE AND HEALTH CARE state with a higher-than-average uninsured rate, California, would have a reversal from a rate 4.9 percent above the national average to rate 1.0 percent below the national average. For states such as Hawaii with a lower-than-average uninsured rate, using multivariate analysis to compare populations results in an even lower- than-average rate (a 66 percent decrease). SUMMARY Who Goes Without Health Insurance? A snapshot of the uninsured population gives us a portrait that reflects the relative size of population groups within the general population under age 65. More than 80 percent of uninsured persons are wage earners or members of working; families, and two-thirds are members of lower-income families (earning less than 2()() percent of FPL). Three-quarters of the uninsured are adults between the ages of 18 and 64, with one-half between the ages of 18 and 34 and one- quarter under the age of 18. Almost 80 percent are U.S.-born citizens, and half are non-Hispanic whites. Most are residents of the South and West, and three- ~ . quarters live in urban areas. Who Is Most Likely to Go Without Coverage? key influence on the probability include work status, family income, educational attainment, selected character~s- tics of a primary wage-earner's employer, and the age of a family's primary wage earner. Marital status and the presence of children each affect the potential oppor- . ~ , , In bivariate analyses, a highly correlated set of socioeconomic factors exerts a ~ ~ ~ that a person will be uninsured. These factors . . . . . . . . turtles tor family members to obtain coverage. (:overage disparities tor ~mm~- grants, for members of racial and ethnic minority groups, and to a lesser extent, for adult women, all reflect the importance of socioeconomic status, as well as the supporting roles played by public policies at the federal, state, and local levels. In addition, uninsured rates vary regionally and across the states. The presence of comparable uninsured rates between urban and rural areas can mask important differences in sources of coverage for rural and urban residents. In addition, a lower-income urban resident's chances of obtaining coverage decline if he or she lives in a city with a higher-than-average uninsured rate rather than in a city with a lower-than-average uninsured rate. Socioeconomic, demographic, and geographic characteristics all have signifi- cant independent effects on the likelihood that one person will be uninsured compared to another. Differences in income, occupation, employment sector and firm size, education, health status, age, gender, race and ethnicity, citizenship status and length of residency, and geography account for much of the variability among people in their likelihood of being uninsured. Disparities in coverage rates persist among population groups, and not all of these differences can be accounted
WHO GOES liVITHOUT HEALTH INSURANCE? 99 for by the commonly measured factors that most directly affect the chances of having health insurance. The next and final chapter presents the Committee's analytic plan for tracing out the consequences of uninsurance. This plan will be fulfilled in the five reports that follow this one.
