Health Care FactsNational Coalition on Health Care

There are 269 million people in the United States (March 1998). How many have health insurance varies over time as people move from job to job, leave the workforce temporarily, go on and off public assistance programs, or otherwise have their circumstances change.

Date%198715%199016%199317.3%199617.7%199818%2005*20%*Projected Source: Employee Benefits Research Intitute (EBRI); Kenneth Thorpe/National Coalition on Health Projections

The statistics show your chance of having a spell in which you do not have the security of health insurance protection is quite high- and rising.In a typical month, about 43 million Americans- one in six-do not have health insurance. Over the last year, about 54 million Americans- one in five- will have had a period in which they lacked health coverage.¹Taking just people between age 18 and 64, one in three is either currently uninsured or had a gap in coverage in the past two years.²The number of people without health insurance has been rising steadily since the late 1980s. Over the last ten years, about 1 million people each year have been added to the ranks of those who lack coverage in any given month. For people under age 65 (almost all those 65 and older have Medicare), 15% were uninsured in 1987, 16% in 1990, 17.3% in 1993, and 17.7% in 1996. If this trend continues, in 2005 a projected 20% of people under age 65- 50 million people- will have no health insurance in a typical month.

reflects % of entire populationSource: Census BureauIn addition to the growing number of uninsured Americans, many people are underinsured- that is, they have inadequate coverage. People lacking adequate health insurance are at risk of having to spend more than 10% of their annual income on medical care. An estimated 11 million non-elderly families (one in eight) and 12 million elderly families (half of those over age 65) spent more than 10% of their income on health care in 1996.³

Employers are the primary source of health insurance in the United States. But government provides coverage to a large number of Americans both as an employer and through public insurance programs such as Medicare and Medicaid.

% of insured workers in firms with 10 or more employeesPlan19931997Traditional48%15%HMO’s19%30%PPO’s27%35%POS Plans7%20%Source: Mercer/Foster Higgins; National Survey of Employer Sponsored Health Plans, 1997

Sources of Health Insurance
(number of people)Private employers120 MillionFederal government as employer (includes military)17.3 MillionState and local government as employer21.9 MillionRetired people with employer-based coverage13.2 MillionMedicare38 MillionMedicaid41 MillionPurchased individually16 MillionNo insurance43.4 MillionNote: Numbers total more than U.S. population because of dual coverage and people falling into more than one category over a year. Source: U.S. Census Bureau; Dept. of Labor; EBRI; Kaiser Commission on Medicaid and the Uninsured.Most people these days have insurance through managed care plans. Employers have rapidly switched to these plans both to save money and to push for improvements in the quality of care. In the process, they have largely abandoned traditional “fee-for-service” insurance coverage which paid medical bills with few questions asked. The government is also shifting to managed care. HMOs are the best known form of managed care plan. They provide comprehensive coverage for a fixed payment but require you to use doctors and hospitals in their “network.” There are two other popular forms of managed care: Preferred Provider Organizations (PPOs) and Point-of-Service (POS) plans. In a PPO, you pay less for care obtained from doctors, hospitals and other providers the health plan has contracted with to accept discounted fees. You pay more for care if you go outside that network. Most POS plans are affiliated with HMOs and, like PPOs, allow you to go to providers outside the HMO’s network for an additional fee.

HOW MUCH DOES HEALTH INSURANCE COST?

The price of health insurance has increased sharply over the past decade, far surpassing the general inflation rate in most years.For example, businesses saw their premiums rise 18% in 1988, 16.7% in 1989, 17% in 1990, and 12.1% in 1991. In recent years, that torrid pace has eased as businesses became tougher negotiators and as managed care plans, competing vigorously for new enrollees, kept premium hikes low. Premiums are widely expected to accelerate again in the next few years, however.The amount families pay for health insurance has also risen. Between 1989 and 1996, the average amount an employee had to contribute for family coverage in an HMO jumped from $935 to $1,778. Typically today, workers pay 20% to 30% of the premium costs for health insurance obtained through their employer. ⁴People buying health insurance on their own and not through their employer face dramatically higher premiums than just a few years ago. In many areas of the country, the cost of such insurance has risen by 10% or more a year for many years. Individual coverage can run $1,500 to $2,500 a year while family coverage typically costs from $3,500 to $7,500. Older people and those with medical conditions pay more.⁵

WHY ARE MORE PEOPLE UNINSURED?

The number of people without health insurance is accelerating primarily because costs are rising and fewer people are opting for coverage at their job. They simply can’t afford it.In addition, small businesses continue to struggle to pay for health insurance. The decline in coverage has occurred even though the economy has been strong and unemployment low for several years. In 1987, 69.2% of people under age 65 had health insurance through a job or a family member’s job. That percentage declined to 64% by 1996.⁶The decline is due to several major forces:Rising Cost For Workers – As the price of health insurance has risen, many businesses have required employees to pay a larger share of the costs. In 1980, for example, 74 percent of employers paid the full cost of health insurance for their workers; in 1993, only 37% did. A growing number of workers have opted not to buy coverage because the cost is too high. One recent study calculated that 6 million fewer people took health insurance from their employer in 1996 than in 1987.⁷High Price At Small Firms – Many small businesses do not offer health insurance because they can not afford it. About 40% of businesses with fewer than 50 workers do not offer any health insurance. Small firms are also more likely today to require workers to pay a greater portion of the cost. Employees in firms with fewer than 200 workers paid 44% of the premium for family coverage in 1996, up from 34% in 1988. By comparison, employees in larger firms paid 30% of premium costs for family coverage in 1996, the same as 1988. ⁸A Changing Workforce – An increasing number of people work part-time, or are contract, “contingent” or temporary workers. More are also self-employed. Such workers are less likely to be offered or able to afford health insurance. Job growth in recent years has been mostly in service industries, such as the hotel or restaurant business. These businesses are less likely to offer or pay for health insurance than the manufacturing sector of the economy.

Source: Kaiser/Commonwealth 1997 Survey

Fewer Workers opt for Health Insurance19871996Workforce86.8 Million100 MillionOffered Insurance by Employer72.4%75.4%Took Insurance64%60.4%Acceptance Rate88.3%80%Source: Cooper and Schone, Health Affairs; National Medical Edpenditure Survey. Includes workers aged 21 to 64 who are not self-employed

WHO ARE THE UNINSURED?

Contrary to popular belief, most people who lack health insurance work or have family members who work.Of those Americans who will be without health insurance sometime this year, only 15% will be unemployed, on welfare, or live in a household where no one is working. About 11 million of the uninsured are children under age 18.The majority of the adults who lack health insurance work for small and medium size firms, work part time or are self-employed. One in five workers who lacks insurance works for a firm with fewer than 10 employees. Another 40% work for companies with fewer than 500 employees. The majority of people who are uninsured live in households with annual income under $30,000. They are also disproportionately young.

% of non-elderly
Source: EBRI, Current Population Survey% aged 18 to 64, 1996
Source: EBRI, Current Population Survey

WHAT DOES LACKING HEALTH INSURANCE MEAN?

In our society, if you do not have health insurance and you get sick or injured you can still go to an emergency room or urgent care clinic and receive medical care.You are supposed to pay the bill yourself. But every day thousands of people who lack insurance receive medical care and can not pay the bill. Hospitals alone delivered an estimated $10 billion to $15 billion in unpaid care in 1995. The cost for this “uncompensated care” is borne by those who have insurance and pay for it. Their premiums get driven up as doctors and hospitals shift the cost of uncompensated care to those who can pay. The growth of managed care- which saves money in part by paying hospitals and doctors less- is making it increasingly difficult for those providers to offer “free” care to the uninsured.Not suprisingly, people who lack health insurance are far less likely to go to the doctor for routine care. Studies also show they delay seeking care even when in need of medical attention, do not fill prescriptions and have trouble paying medical bills. They are generally in poorer health, too, in part because they lack access to proper care.Getting Medical Care
(% of adults age 18 – 64; applies to a period of 1 year)Had InsuranceHad Gaps In
CoverageUninsured
CurrentlyDid not fill prescription6%21%24%Had difficulty getting needed care
(assessed by self)10%27%51%No physician visit in past year17%19%42%Postponed care due to cost12%40%55%Had trouble paying medical bills11%33%33%Had to change life significantly to
pay for medical bills4%13%17%

WHAT IS TO BE DONE?

Most industrialized nations assure that all their citizens have health insurance.In fact, the United States is the only fully industrialized country in the world besides South Africa that does not require that all citizens be covered. Other nations accomplish universal coverage through either a national health care program- such as England or Canada- or through programs that require employers to pay for health insurance and citizens to have it. In both cases, taxes on businesses and citizens pay for the programs.Lawmakers and advocates for universal coverage in the United States have, since the 1930s, proposed numerous plans to extend health insurance to all Americans. Several such plans have been debated at length in Congress. None has ever come to a vote. In 1965, Congress enacted Medicare and Medicaid. Those two programs now cover 73 million elderly, low-income and disabled Americans. Taxes on businesses and individuals pay for both programs.In 1993, President Clinton proposed a plan to cover all Americans by requiring employers to offer insurance and pay the lion’s share of the cost. It failed when Congress did not take up the legislation and could not reach consensus on an alternative plan.Many experts agree that, until all legal residents in the United States have health insurance, assuring high quality of care for everyone will be difficult; the cost of medical care will be harder to control, and the number of uninsured people will grow larger and larger.

ENDNOTES

1. Census Bureau Data from Current Population Survey 1998, the Survey of Income and Program Participation (SIPP) and the Medical Expenditure Panel Survey (MEPS); Kaiser/Commonwealth 1997 Survey of Health Insurance (Dec. 1997)
2. Kaiser/Commonwealth 1997 Survey
3. Consumers Union, “Hidden From View: The Growing Burden of Health Care Costs,” January 1998
4. UCLA-KPMG, “Trends in Job Based Health Insurance Coverage,” June 1998
5. Consumers Union, “Hidden from View: The Growing Burden of Health Care Costs,” January 1998
6. Employee Benefits Research Institute (EBRI)
7. Phillip Cooper and Barbara Schone, Health Affairs, November/December 1997; and Jon R. Gabel, et al, Health Affairs, September/October 1997
8. Jon R. Gabel, et al, Health Affairs, September/October 1997