There’s more recent data to refine our understanding of who is uninsured – and more apropos to earlier posts here, why. Sorry, libertarians, it’s not because they don’t want health insurance.
When asked why they don’t participate in their employer’s program, 1% of survey respondents said it was because didn’t think they needed insurance.
One percent.
The survey, conducted by the Washington Post, Kaiser Family Foundation and Harvard University provides a “detailed look at the real life experiences and views of low-wage workers”, with ‘low wage’ defined as less than $27,000.
Given the cost of health care and insurance premiums, it is not surprising that for many respondents health care is becoming unaffordable. When asked how easy or difficult it is to afford health care and health insurance, 1/3 of the respondents said ‘very difficult’, and 29% ‘somewhat difficult’. A significant majority would also settle for lower pay if the job had health insurance (56%, compared to 39% who would prefer better pay and no health insurance).
And fewer and fewer are getting insurance through their employer. 69% of the respondents’ employers offer insurance, but only 60% sign up (most because they already have coverage through another source, e.g. via a spouse’s plan, Medicaid or Medicare). Adding up all those with coverage, 72% have some form of coverage, and the remainder does not.
Some claim that a hefty portion of the uninsured don’t have coverage because they just don’t want it. Could be; like I don’t have a place on a lake in New Hampshire because I ‘just don’t want it’. Actually, that’s not true; I also have three college educations to pay for, a mortgage and individual health insurance, so I ‘want’ the lake house, but I can’t afford it.
Here’s a passage from the American Enterprise Institute’s magazine on the issue:
“more than 17.6 million uninsured live in households earning more than $50,000 a year, and household income is above $75,000 for more than 9 million uninsured. However, those numbers overstate the actual income available to those uninsured individuals, because household units are defined more broadly than are insurance purchasing units. As the composition of “households” changes, their income isn’t the same as family income available for spending on health insurance. The rising cost of coverage remains the primary barrier to insurance coverage for the uninsured, and in some cases, its value just may not be “worth it” [emphasis added] for those in higher income families. But a more narrow and consistent measure of the higher income uninsured is closer to 2 million, involving people with regular incomes over $50,000 who lack insurance for spells of more than a year. [emphasis added]”
My sense is that’s what’s really going on here. Poor people can’t afford coverage, and thus don’t have insurance. People of greater, but still modest means, also can’t afford health insurance, so they ‘choose’ to go without.
But most don’t ‘choose’ to be uninsured; the cost:expense equation makes that choice for them.
The question is – at what cost level would people buy coverage?
I’m going to take a shot at that tomorrow.
Aug
11
My daughter-in-law was recently laid off (the teen shelter she worked for could no longer afford mental health counselors), so the family no longer has health insurance. My son check with his employer to see what it would cost to cover the family (3 kids). Turns out it would take his ENTIRE paycheck, PLUS he’d have to chip in another $60 a month!
I would be curious to see if the states that required community rating and guaranteed issues have less or more uninsured. I would hypothesize that there would be a high percentage of uninsured because the cost is higher.
James, you can find the data you are looking for at the Kaiser statehealthfacts.org site. You can find a state-by-state list of who has community-rating, guaranteed issue and modified or hybrid versions of these. Lotsa good details in there. Then you can compare that list to rankings of states by percentage of uninsured.
I can save you the trip, though. Your hypothesis doesn’t stand up. States with guaranteed-issue and/or community rating are all in the top quintile for having the least amounts of uninsured people.
Part of the reason your hypothesis doesn’t stand up is because one of your assumptions is false — i.e. that there is a one-to-one correlation that says because a state has guaranteed-issue or community rating, premiums are higher.
I’ll cite the example of Michigan, because it’s a state I know well. Michigan has a modified guaranteed issue rule and community rating. BCBS of Mich. is, by statute established in 1934, the state’s insurer of last resort. It must issue an individual health plan to anyone willing to pay the premium if they have been turned down by other insurers. For these policies, community rating by county applies. The rates for the BCBS individual plans are competitive with all the other individual insurers in the state. They are neither the cheapest, nor the most expensive.
The kicker is that, on average, Michigan’s individual plan rates are the fourth-lowest in the nation.
Michigan’s system is by no means perfect. Blue Cross lost $24 million last year on individual policies. Sounds like a problem, but in context, it is less than a 1 percent loss. A price increase that the Blues just negotiated with the state’s department of insurance should return the individual lines to profitability next year. They have been profitable in the past, and as I say, this is how things have been done since 1934. And the Michigan Blues are not hurting by any stretch of the imagination. Their enormous profits on everything else they do more than made up for the individual line problems last year.
This has been the subject of much debate in the last year. My analysis is that the Blues are partly to blame for not asking the DOI (actually called OFIS in Michigan) for rate increases on the individual line often enough (only 3 times since 1999). And that state is partly to blame for making the process of rate increases take so long (the last request was sought in Dec. 2006, and just got the OK last month). Legislation that is likely to be passed by the end of this year should provide for a more expedient method of raising rates, which will likely bring the Blues back to the OFIS more frequently — not a bad thing in my book, as I feel it would be better to have small increases every year or two, than 40% increases every five.
But even with the analysis I give you here, you’re best off paying attention to Joe. There are a number of complex issues driving uninsurance, beyond just price and cost, that I have confidence Joe will do justice to.