The Growing Problem of the Uninsured: Why Is It So Hard To Resolve?

By Mary R. Anderlik
Health Law & Policy Institute

Much recent press has been devoted to a disheartening trend. While the U.S. economy has been robust, with unemployment rates declining, the number of Americans who lack health insurance has been steadily climbing. U.S. Census Bureau estimates show a substantial increase in the number of uninsured in recent years. In 1996, 41.7 million people or 15.6% of the population were uninsured. In 1997, that number rose to 43.4 million (16.1%). Perhaps even more alarming, 71.5 million people were without insurance for at least part of 1997.

This is a long-term, not a short-term, problem. From 1989 to 1997, the number of uninsured increased by 10 million. Another statistic may be more effective in making the point: 1 in 6 Americans is now uninsured, versus 1 in 7 in 1989. And an estimated 100,000 people lose coverage every month. The groups most affected are young adults aged 18-39, African-Americans, Hispanics, and sick persons aged 59-64.

Why is this happening?

Insured Americans get their coverage from a number of sources. About 42% obtain coverage through a private-sector employer. About 35% obtain coverage through government, either as employees or as participants in programs such as Medicare and Medicaid. Finally, about 7% purchase their own coverage in the individual market.

Employment in the private sector, then, is still the primary mode of access to insurance. Yet employers do not always offer insurance, and those that do are passing more costs on to employees. One study estimated that in 1996 the average contribution for employees was $1615 a year or 30% of the total premium. Further, the amount employees are required to pay out-of-pocket is increasing more rapidly than the cost of health care, which is increasing more rapidly than the cost of goods and services generally. In 1997, out-of-pocket costs increased by 5.3%, versus 4.8% for total health care costs. A recent study found that the proportion of low-wage workers who had access to employer-provided insurance declined by 5% between 1987 and 1996, but the number who actually accepted such coverage declined by 13%.

People who get their insurance through the government are affected by these trends, but their coverage is generally more secure. The situation of individual purchasers is clearly the worst. People who obtain their insurance in the individual market pay about 40% more than people who have access to insurance under group policies. Those who have health problems, and hence are most in need of insurance, face the greatest cost-barriers. In states with high-risk insurance pools, premiums are 25% to 100% above those for policies in the commercial market.

For the uninsured and the barely or precariously insured, the current system for financing health care means perpetual anxiety. Health problems are often neglected until symptoms can no longer be endured, and then care is sought in emergency rooms.

What can we do about it?

So far, the legislative response has been a series of targeted initiatives to increase access among special groups, including children, early retirees, people with disabilities, and workers not currently ensured through their employers. The results of recent public opinions reveal why it is so hard to move beyond this piecemeal approach.

In a 1998 post-election survey, 61% of respondents said "helping the uninsured get coverage" should be a top priority for the new Congress. But given three health care reform options—a national plan for universal coverage, an employer mandate, and an income tax refund to individuals—respondents split along party lines, with Republicans favoring the tax refund and Democrats favoring the employer mandate. Further, and perhaps more importantly, only 46% said they would be willing to pay more to finance expanded coverage. Presumably, were we agreed on the urgency of the problem and the need to make some additional resources available to address it, we could work out the details, but the second pillar of reform appears to be missing. See Kaiser Family Foundation/Harvard School of Public Health, Post-Election Survey: Priorities for the 106th Congress (1999), available through http://www.kff.org/surveys/.

Putting all of this together is more than simply disheartening, it is down right depressing. If so many are losing or choosing to do without health insurance when the economy is robust and employment is rising, what will happen when the economy takes a downturn and employment starts to fall? If we are not willing to pay more now, when many of us are doing well financially, how generous will we be when the financial picture is less rosy?

Of course, people who lack health insurance do not necessarily lack health care. There is a safety net. But strictly from a public policy perspective, it seems less than far-sighted to direct our communal resources to emergency rooms. Our reason, if not our compassion, should lead us to work a little harder on addressing the problem of the uninsured.

03/08/99