Uninsured

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The Number of Uninsured Growing in California

January 11, 2012 in HC Statistics | 1 comment

Although Health Reform has passed, many of its mandates–such as Health Insurance Exchanges–have not yet been implemented.  As the cost of health care has been growing over time, the number of uninsured has also been growing.

The California Health Care Foundation examines the uninsured in California in more detail.  Although Texas has the highest share of individuals uninsured (27.3%), California has the largest number of uninsured individuals in the country (6.9 million) and one of the largest share of (21%).  One of the reasons for this decline is a decrease in the share of firms offering insurance.  The share of non-elderly Californians who obtain their insurance through their job has  declined from 65% in 1987 to 53% in 2010. Part of this decrease has been offset by a rise in the share of Californians covered by Medicaid.

Some other highlights from the CHCF report include:

  • Employees in businesses of all sizes are more likely to be uninsured in California than in the United States.
  • Nearly one-third of the uninsured in California and the nation have family incomes of $50,000 or more.
  • Fifty-three percent of California’s uninsured children are in families where the head of household worked full-time during calendar year 2010, down from 61% in 2008.
  • About 60% of the uninsured population are Latino.

Below are two charts displaying the insurance source for Californians in 2010 and 2000.

For more facts and figures, see the CHCF Snapshot, California’s Uninsured, Dec 2011.

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State Governments Providing Health Insurance to More Children

October 28, 2011 in CHIP, HC Statistics, Medicaid | No comments

Of the 6.6 million uninsured children in the nation, 4.3 million are eligible for Medicaid or the Children’s Health Insurance Program (CHIP). Approximately 2.8 million children come from families at or near the federal poverty line (FPL).

Despite the fact that millions of children are uninsured, children’s participation rates in Medicaid/CHIP are increasing. Today I will review the results of an Urban Institute study examining trends in Medicaid participation rates for children.

Data

The authors use data from the 2008 and 2009 American Community Survey (ACS). This large survey data set has replaced the Census long form. The authors use the Integrated Public Use Microdata Series (IPUMS) version of the ACS.

Determining Eligibility

Three main characteristics determine a child’s eligibility: family composition, income, and immigration status.  Medicaid eligibility depends on the family’s income as a share of the federal poverty level (FPL).  The FPL threshold changes based on how many individuals are in the household.  Further, many States restrict Medicaid and CHIP access to citizens or legal residents.  Although survey data often indicate whether the individual is foreign born, the data do not contain information on whether the individual is a citizen, legal resident, temporary resident, or lives in the U.S. illegally.  This paper describes one methodology to impute immigration status from these survey data.

Results

  • The share of children without health insurance coverage fell between 2008 and 2009,despite the ongoing economic downturn;
  • Nationally, the rate of Medicaid/CHIP participation among children rose by 2.7 percentage points to 84.8 percent and cross-state variation in Medicaid/CHIP participation rates narrowed, as larger improvements occurred on average for states that had the lowest participation rates in 2008;
  • Six states (DC, Hawaii, Maine,Massachusetts, Michigan and Vermont) had participation at or above 90.0 percent in 2008 and 2009
  • Six states (Florida, Montana, Nevada, North Dakota, Texas and Utah) had participation rates below 80.0 percent in both 2008 and 2009
  • Participation gains occurred between 2008 and 2009 for children in each race/ethnicity, language, income and age group examined;

Source: Kenney GM, Lynch V, Haley J, Huntress M, Resnick D and Coyer C. “Coverage Gains for Children,” Urban Institute, RWJF Report, Aug 16, 2011.

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The Cost of Uncompensated Care

April 1, 2010 in Health Insurance, Public Policy | 5 comments

Because it expands health insurance coverage, one of the key effects of the recently passed health reform bill is that it will decrease the amount of compensated care.  According to an Urban Institute study:

“…the cost of uncompensated care will fall from $62.1 billion in 2009 to $46.6 billion in 2019 under the Senate bill, and to $36.5 billion in 2019 with the House bill…Without reform, the cost of uncompensated care will increase to between $107 and $141 billion in 2019, depending on growth in the economy and health care costs.”

Who currently pays for uncompensated care?  This chart provides a breakdown.  Surprisingly, physician’s in-kind free treatment makes up only 14% of uncompensated care.  On the other hand, Medicare and Medicaid fund the largest share of uncompensated care.  The reason for this is that Medicare has a disproportionate share hospital (DSH) payment program indirect medical education payments and Medicaid also has a DSH program as well as supplemental provider payments programs.  The authors count these programs as payment for uncompensated care.  The DSH payment system doesn’t make much sense to me.  If, Medicare or Medicaid payments are too low, why not raise the reimbursement rates rather than give lump sum handouts to hospitals in the form of a DSH payment.

State and local government also pay for a large share of uncompensated care.  In California, county-financed clinics are the last refuge for those without insurance, especially for undocumented immigrants.  According to the study, state and local governments pay for about 18% of unfunded care.

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How San Francisco’s provides Health Care for the Uninsured

January 22, 2010 in Health Insurance, Public Policy, Supply of Medical Services, Wait Times | 3 comments

Most workers have employer-provided health insurance. The old have Medicare and the poor Medicaid. Children have SCHIP and veterans have the VA. But what about the people who fall through the cracks? What about individuals who work for small businesses who don’t offer insurance, entrepreneurs, or illegal immigrants? Where can they get health care? An article in San Francisco Magazine discusses how the Bay Area provides health care for the uninsured.

Healthy San Francisco (HSF) is the city’s two-year-old health-access plan that provides healthcare access most uninsured resident aged 18 to 64, regardless of employment, citizenship, or preexisting conditions. In a city of 800,000 people, about some 63,000 people (~8%) use HSF. Journalist Justine Sharrock notes that “Healthy San Francisco isn’t insurance—it’s a system of providers that uses the city’s superb healthcare infrastructure: neighborhood clinics, community hospitals, public health centers, and the state-of-the-art resources of UCSF. It doesn’t replace other government programs, like Medicare or Medi-Cal; it just ensures that people who don’t qualify for them don’t fall through the cracks. To enroll, all you do is show proof of residency and income: The cap is now $54,150, though officials hope to open HSF to all income levels by the end of 2010. Other than a requirement that new participants be uninsured for three months prior to joining the program, there isn’t even a waiting period.”

HSF is, hands down, one of the best healthcare bargains anywhere. For individuals earning less than $10,830 annually, the program is free. For everyone else, basic enrollment is $20 to $150 per month (versus $409 for the average California insurance premium), with rock-bottom copayments: $10 for primary care visits, $200 for hospital admissions, and $5 to $25 for medications.

The main advantage of HSF is that sick people can get affordable health care. The article describes a woman named Sharon Donnelly who has hydrocephalus (i.e., a condition in which fluid develops in her brain) and found it “nearly impossible” to purchase nongroup coverage. Because she could enroll in HSF, she quit her library assistant job and gave up her private coverage. She is extremely satisfied with the care. In fact, the Kaiser Family Foundation found that 94 percent of users expressed satisfaction with HSF. Further, the program is inexpensive for users. “For those earning less $10,830 annually, the program is free. For individuals earning less than $10,830 annually, the program is free. For everyone else, basic enrollment is $20 to $150 per month (versus $409 for the average California insurance premium), with rock-bottom copayments: $10 for primary care visits, $200 for hospital admissions, and $5 to $25 for medications. Additionally, having HSF may attract more young, innovative people to San Francisco. These entrepreneurial people can work in small internet start-ups without worrying about how to get by without health insurance.

The main disadvantage of the plan is that it raises taxes and does not replace a comprehensive insurance plan. Let us return to the case of Sharon Donnelly. The availability of HSF allowed her to quit her job and employer the accompanying employer group plan in order to look for better employment. However, San Francisco taxpayers must subsidize such an expensive patient. In fact, the high cost individuals without access to employer-provided plans are the ones most likely to take up HSF. Small businesses cost are higher in San Francisco, partly because of a pay-or-play mandate which compels businesses to offer health insurance to their employees. “Businesses with 20 or more employees must contribute $1.31 to $1.96 per worker per hour toward some form of healthcare: either private insurance, a flexible spending account that sets aside money for health¬care needs, or the city option, including HSF.” However, the pay-or-play employer contributions to HSF make up only 11% of the program’s cost. No wonder San Francisco’s sales tax is 9.75%.

Additionally, the program only covers you when you’re in the city. If you’re injured outside of San Francisco—even in another Bay Area city such as Oakland or Palo Alto—then you must pay for care out of pocket. The HSF website even warns: “Healthy San Francisco is not insurance. If you have insurance, do not drop it. Insurance is always a better choice.”

Further, treatment can be slow. As part of being in the HSF, the author had to pick up her medications at San Francisco General’s pharmacy which she claims has “confusing or non-existent procedures” and took an hour to get her prescription filled. Although the Ms. Sharrock finds “the sense of camaraderie with the other people in line oddly comforting,” most people more likely believe that this is a serious inconvenience, especially for those with more rigid work schedules.

Finally, the creation of HSF will induce Tiebout sorting. If you am someone who earns $40,000 per year working for a small business in the city who does not offer insurance, living in San Francisco is a great way to get health insurance. However, if you make $200,000 working in the city with an employer-sponsored plan, you may choose to move to a nearby San Mateo county and commute to work. If this occurs, San Francisco will lose out on tax revenue from many of the high wage workers.

Overall, it is clear that individuals who participate in the HSF plan receive significant benefits. Because HSF is not self financing, those who do not participate in the plan will have to subsidize these costs. The effect of migration into/out of San Francisco is ambiguous: having HSF will attract workers but the higher taxes needed to pay for HSF will drive some people away as well. HSF is similar to the current health care reform proposals in that it will expand coverage, but does little to control costs or significantly change the healthcare system.

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Urban Institute: Reform Plan’s affect on the Number Uninsured in the U.S.

October 29, 2009 in Health Insurance | 1 comment

Currently there are about 45 million uninsured individuals in the United States.  The Urban Institute predicts would happen to the number of individuals uninsured under the following of reforms.

  • Expand Medicaid to individuals with incomes up to 133 percent of the federal poverty line (FPL): 17 million uninsured would receive insurance
  • Provide subsidies to individuals with incomes between 133% and 400% FPL to purchase health insurance: 16.3 million uninsured would receive insurance.
  • Enact an insurance mandate: 4.3 million uninsured persons  would not be eligible for Medicaid or subsidies because they have incomes of at least 400 percent of the FPL,  but would be required to purchase coverage due to the individual mandate.
  • Number left uninsured: 6.3 million, these are the unauthorized or recently authorized immigrants.

Under these proposals, only immigrants would not have insurance.  However, these reforms do not solve to problem of expensive health care or low quality health care.  One can make everyone insured by enacting an individual mandate, but if health insurance costs $12,000 for a family, there is little hope that family earning $20,000 will be able to afford the premiums–regardless of whether there is a mandate or not.

Expanding insurance is a laudable goal, but it should not be the only one.  Making health insurance more affordable would allow more people the option of purchasing health insurance.  Further, spreading best practices across physicians would improve health care quality and may even reduce costs.

Source:  Dubay, Cook, Urban Institute “How Will the Uninsured Be Affected by Health Reform?“

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Do we spend too much on immigrant health care?

August 20, 2009 in Economics - General | 2 comments

The Immigration Policy Center believes not.  Some evidence they give includes:

  • Ku (AJPH 2009) reports that “immigrants’ medical costs averaged about 14% to 20% less than those who were US born.”
  • Four out of five people in America who have no insurance are U.S. citizens.  
  • The UCLA Center for Health Policy Research found that in 2005 one out of every five uninsured Californias were undocumented.
  • Undocumented overuse of the emergency room may be a myth.  In 2006, 20% of U.S.-citizen adults and 22% of U.S.-citizen children had visited the emergency room within the past year.  In contrast, 13% of noncitizen adults and 12% of noncitizen children had used emergency room care.  

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Income not keeping pace with health insurance cost

March 24, 2009 in Health Insurance | 1 comment

A recent report from Cover the Insured.org reviews the how health insurance trends have evolved over the last ten to fifteen years.  The percent of uninsured individuals has increased from 16.0% of the population in 1995 to 17.5% of the population in 2006.  The increase is entirely due to the increase in uninsurance among working aged adults (i.e., aged 18-64).  Among children, uninsurance rates dropped from 13.7% of children in 1995 to 11.7% of of children in 2006.  SCHIP expansions likely played a large role in the increase in childhood insurance coverage.

Why are more and more working-aged adults left without insurance?  The reason is that health insurance costs are increasing faster than income.  Let us look at the following table:

Between 1996 and 2006, overall health insurance premiums for employer-provided plans increased by 4.87% for single coverage and 5.98% for family coverage.  These are average annual increases above secular inflation (i.e., CPI).  However, median real income increased by only 0.76% per year between 1994 and 2006.  Is there really a 5% gap in between income and health insurance premium growth?

The answer is yes and no.  There is still a large gap between income and health insurance premium growth, but the gap is not 5%.    Using salary as the only measure of workers compensation does not take into account the fact employer contributions towards health insurance plans has increased over time. While salary has increased only by 0.76%, employer health insurance contributions have increased by 4.62% (single) and 6.03% (family) per year.  After taking into account employer health plan contributions, we see that the true increase in real worker compensation ranges between 1.01% and 2.02% per year.

Even after taking into account the increased employer contributions, we still see that real health insurance premiums have outpaced real labor compensation by about 3.9%.  In order to decrease the number of uninsured, we need to bring down the cost of health insurance.  This means either increased cost-sharing or enacting more limitations on medical services provided.  If we do not want to increase cost-sharing or limit care coverage, premiums will continue to increase.  Whether these premiums are paid by individuals, the employer or the government, they represent a real cost to society that needs to be spent efficiently.

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Affordability Index

January 15, 2009 in HC Statistics | No comments

Everyone knows that health insurance is getting more and more expensive.  But how can we measure how expensive it is?  A paper by UC-San Diego professors Richard Kronick and Todd Gilmer creates an “affordability index” to measure this.  The affordability index is equal to the per-capita, non-elderly health spending divided by the median income.  In essence, it measures what percentage of our income is being dedicated to health expenses.

The affordability index worsened from 5.6 percent in 1989 to 10.9 percent to 2002.  This lack of affordability has accompanied the contemporaneous rise in the percentage of uninsured individuals.

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Covering the Uninsured

October 6, 2008 in HC Statistics | 3 comments

Jonathan Gruber (2008) has a nice review article in the most recent edition of the Journal of Economic Literature.  This article is especially good for those who are not schooled in the basic issues of the uninsured.  It is also useful for professors wishing to teach students about the uninsured in America.

The article reviews economic concepts such as adverse selection, moral hazard, crowd-out, and risk aversion.  Below I will highlight some other key concepts.

  • Employers are the source of health insurance for 3 reasons: 1) risk pooling, 2) the tax deductibility of employer-provided health insurance, 3) lower administrative cost.
  • The uninsured often receive uncompensated care.  ”Under federal law, any hospital that accepts reimbursement from Medicare must treat individuals who arrive in an emergent state, regardless of their ability to pay.”
  • Martin Feldstein (1971) proposes a major risk insurance plan, in which individuals would face a 50% copayment on all medical care until they spent 10% of their income on medical care.  
  • Does higher deductibles lead individuals to forego needed preventive or primary care and lead to more hospitalizations?  The RAND Health Insurance Experiment found that this was not the case, higher deductibles lead to lower medical expenditures and no change in hospitalizations.  However, a paper by Gruber (2006) found that low income, chronically ill patients will forego needed healthcare with high deductibles and hospitalizations increase.
  • Why should we care about the uninsured?  Possible externalities from increased probabilities of communicable disease infection, “job lock”, paternalism, and redistributional reasons.  
  • Administrative costs for private health insurance in the U.S. are 12% of of premiums compared to 1.3% in Canada.
Below are some data on the uninsured.

 

 


Nonelderly Americans’ Source of Health Insurance Coverage
  People (m) Percentage
Private 179.4 69.0%
  Employment Based 161.7 62.2%
  Indiv. Purchased 17.7 6.8%
Public 45.5 17.5%
  Medicare 6.5 2.5%
  Medicaid 34.9 13.4%
  TRICARE/CHAMPVA 7.1 2.7%
Uninsured 46.5 17.9%
TOTAL 260.0  

 

 


Nonelderly Americans’ Source of Health Insurance by Income
Income Total Employer-based Individual Plan Public Uninsured
<$10,000 20.5 2.2 2.1 9.5 46.5
$10,000-$19,999 22.8 4.9 2.1 9.1 7.3
$20,000-$29,999 25.0 9.8 2.0 6.8 7.8
$30,000-$39,999 25.6 13.4 1.9 5.5 6.1
$40,000-$49,999 23.4 15.0 1.6 3.6 4.5
$50,000-$74,999 48.9 36.6 3.0 5.2 6.4
>$75,000 93.8 79.9 5.0 5.7 6.7
Total 260.0 161.7 17.7 45.5 46.5

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How does having health insurance affect the probability children recieve needed care

September 3, 2008 in Health Insurance, Supply of Medical Services | Permalink

A recent Robert Wood Johnson Report (see also press release) finds that uninsured children receive less needed medical care than individuals with health insurance.  The report finds that 91% of children who are insured have had a physician visit in the last year compared to only 69% of uninsured children.  Seventy seven percent of children with insurance had a well-child visit in the last year compared to 45% of uninsured children.

Does this mean that having health insurance increases the quantity of health care children receive?  Yes.  Holding health insurance decreases the marginal cost of a physician visit and this increases the probability a child will visit the doctor.

Do these statistics imply that giving health insurance to the uninsured will increase well-child visits to rates of insured children?  Likely no.  Children who have insurance are likely to be different than those without health insurance.  Those with private insurance are likely more educated, richer, and more likely to have an English-speaking household than those without health insurance.  These individuals have likely have higher demand for medical care than the average person.  Thus, giving all uninsured children insurance will likely increase well-child visit rates, but will not increase them to the level of the currently insured.  Conversely, if all insured people lost their insurance, well child visit rates would still be above individuals who are currently uninsured.

While health insurance coverage likely contributes to physician visit rates, it is not the only factor which determines a child’s frequency of physician visits.

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