THE UNINSURED : A GROWING PROBLEM
Lack of health insurance is a problem for millions of Americans. In 1994, 17.3 percent of Americans under age 65 lacked health insurance, representing nearly 40 million people. Virtually all Americans without health insurance are under age 65 because Medicare provides coverage for nearly all elderly citizens, as well as the most severely disabled. Most non-elderly Americans obtain private insurance coverage through an employer (about 60 percent) or purchase it themselves (about 9 percent). Medicaid covers those on welfare and some related low income groups, providing health insurance to 12 percent of the non-elderly population. Another 2 percent are covered by other public programs. Uninsured Americans either fall through the cracks of the employer-based system or do not meet the restrictive income and categorical requirements for Medicaid assistance.
Sources of Health Insurance Coverage in Connecticut
In Connecticut, an even higher proportion of the non-elderly population has private insurance coverage. In 1994, that figure was approximately 80 percent. About 75 percent obtained coverage through an employer, either their own (40 percent) or a family member's (35 percent). Nearly 10 percent of Connecticut residents under age 65 received coverage through a public program, the largest of which is Medicaid. Finally, a total of 12.2 percent of Connecticut's non-elderly population was uninsured in 1994.(footnote 2)
The Uninsured in Connecticut
In recent years, a growing proportion of Connecticut's residents have gone without health insurance. From 1990 to 1994, the uninsured have increased from 8.5 percent to 12.2 percent of the non-elderly population, (or approximately 333,000 Connecticut residents, according to Census Bureau estimates). This trend has mirrored Connecticut's declining economic fortunes through the recession. The state has lost jobs in sectors that have traditionally included health benefits -- defense, manufacturing and insurance, for instance -- while it has gained service sector jobs that are less likely to provide coverage.
It is important to note that the Census Bureau's point estimate represents a snapshot in time. In other words, on any given day in 1994, an estimated 333,000 Connecticut residents lacked health insurance. National data indicate that a larger number of individuals were uninsured at some point over the course of the year.
In 1993, for example, 51.3 million people -- one in five Americans -- were uninsured for some time during the year. Of these, 18.2 million (35 percent) were without insurance for the entire year. Another 22 million (or 43 percent) went without coverage for 4-11 months, while the remaining 11.1 million (22 percent) were uninsured for 1-3 months. (footnote 3)
Who are the Uninsured?
One available source for demographic information on the uninsured comes from the March Current Population Survey (CPS), which is conducted each year by the U.S. Bureau of the Census. Nationwide, 60,000 households are interviewed on a variety of demographic and socioeconomic topics, including health insurance coverage. Due to the size of the sample, health care analysts tend to merge 3 years worth of data, so that meaningful conclusions can be drawn at the state level. A 1995 publication by the Urban Institute used this approach to provide a state-by-state demographic profile of the uninsured.(footnote 4)
The merged data comes from the 1991-1993 March Current Population Surveys and covers calendar years 1990-1992 (weighted more heavily toward the most recent year). The data show that Connecticut's uninsured are a diverse group; they come from different income levels, age groups and family types.
Attachment to the Work Force
Significantly, during the period of 1990-1992, the vast majority of the uninsured were from working families. More than 7 in 10 uninsured households in Connecticut had at least one adult who worked full-time and another 15 percent had at least one adult who worked part-time. Only 12 percent of uninsured households were headed by adults who were not in the work force.
When one looks at uninsured adults by their own work status, a similar pattern emerges. Over 80 percent had some connection to the work force.
Size of Firm
From 1990 to 1992, Connecticut's uninsured were much more likely to work for small and medium size firms. About 52 percent of the uninsured were employed by firms with fewer than 25 employees. Another 13 percent worked for firms with between 25 and 99 employees. The rest worked for firms with 100 or more workers.
There are a number of reasons for this trend. National data show that small firms are much less likely to offer coverage to their employees than larger ones. Small firms' per capita costs for health insurance are significantly higher than their larger counterparts. In part, this is due to the higher risks and higher average administrative costs associated with small businesses. Larger firms can spread risk and administrative costs over more workers. In addition, these firms have more clout in the market place when negotiating rates with health insurers.
Connecticut Specific Survey of Businesses
In 1991, the Bourget Research Group conducted a survey of Connecticut businesses to gauge small business attitudes toward health insurance and explore why some firms do not offer coverage to their employees. The survey found that among firms of fewer than 25 employees, about 65 percent offered health insurance, while about 35 percent did not.(footnote 5) Among these firms, those with fewer than 4 employees were the most likely not to offer health benefits.
The survey found that the most common reason for not offering health insurance was that it was too expensive (63 percent). About 28 percent reported that most of their employees were covered by a spouse's plan and 19 percent cited the poor business/economy as the reason for not offering coverage. Other frequently cited reasons included having too few employees, plans being too costly or complicated to administer, and having been turned down for health reasons.
The Uninsured by Age
Again, reflecting the dominance of working individuals among the uninsured, the vast majority of Connecticut's uninsured population fell between the ages of 18 and 64, while the remaining 19 percent were children. Overall, the 18 to 34 group was the most likely to be uninsured. After that, the chances of being uninsured declined with age.
There are several possible explanations for the prevalence of young adults (18 to 34 years) among the uninsured. First, those right out of high school or college are no longer eligible for their parents' coverage. Second, they are less likely to be established in the work force than older residents in their prime earning years. Lastly, these individuals may be more likely to feel that they do not need health insurance due to the general good health associated with this age group.
Between 1990 and 1992, poor and moderate income families were disproportionately represented among the uninsured. In general, the higher one's income, the less likely he or she was to be uninsured. However, the one exception to this pattern involved those below the poverty level. Those slightly above poverty were more likely to be uninsured than those below. This, of course, is due to the presence of Medicaid, which acts as a safety net for the poor who qualify for the program.
However, as the chart on the next page shows, many low income individuals are not eligible for Medicaid. A total of 19 percent of Connecticut's uninsured were poor, living under the federal poverty level (FPL).(footnote 6) Another 34 percent of the uninsured were "near poor," living between 100 and 199 percent of the FPL. Families between 200 and 399 percent of the FPL made up 34 percent of the uninsured. The remaining 13% came from families living at or above 400 percent of the FPL.
In Connecticut, where health care costs are among the highest in the nation, the cost of individual non-group policies are beyond the means of many families -- even those who are well above federal poverty standards. Family premiums for these policies vary widely, but can cost $6,000 per year or more. For a family of three that earns 300 percent of the FPL (less than $40,000 a year) this premium would represent 15 percent of their gross annual income.
Type of Family
About half of Connecticut's uninsured were single with no dependents between 1990 and 1992. Married people with children made up nearly a quarter of the uninsured, while couples with no children represented an additional 14 percent. Finally, single-parent families made up the remaining 12 percent of Connecticut's uninsured residents.
In part, the dominance of singles (including single-parents) among the uninsured can be explained through economic factors. Overall, married families tend to have higher incomes, especially if both partners are working. In addition, if both are in the work force, there is a higher probability that the family has access to employer-based coverage. If not for the existence of the Medicaid program -- which serves those on Aid to Families with Dependent Children (AFDC), among others -- single parent families would make up a much greater proportion of the uninsured.
Not Having Insurance: An Economic or Personal Choice?
In 1993, a national survey was conducted that asked adults the primary reason they did not have health insurance. Nearly 6 in 10 responded that they could not afford coverage. Another 22 percent said they were unemployed or that their employer did not offer health insurance. Three percent of the uninsured reported they were denied coverage due to a prior illness exclusion. Only 7 percent said they were uninsured by choice.
The dominant pattern that emerges is the close tie between economic well-being and the likelihood of being insured. Higher incomes, having two adults in the workforce, and having a stable, full-time job with a large employer, all correlate positively with being insured.
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