Policies to Aid the Uninsured

1. Policies to Aid the Uninsured Michael S. Lawlor Wake Forest University, Dept. of Economics Forum on Pres. Candidates’ Health Plans Slides available on web page: http://www.wfu.edu/~lawlor/

2. Overview The problem of the uninsured is continuing to grow. The federal government estimates that 47 million individuals lacked health insurance coverage of any kind during 2006. Other research shows that tens of millions more Americans go without health coverage for shorter periods of time. Percentage of Nonelderly Americans Without Health Insurance Coverage, 1987-2006 Source: Employee Benefit Research Institute estimates from the Current Population Survey, March 1988-2007 Supplements.Note: 1987-2003 data are adjusted for Census correction announced in March 2007.

3. Characteristics of the uninsured • Most are employed (about 80%). • Many (about 33%) are just too low income to afford any plan. • About 10% are young and risk-neutral. • Don’t want to spend money on insurance • About 10% are children. • The rest are some combination of these, just unlucky enough to work for a small employer, or to have pre-existing health conditions that insurers avoid

4. Workers Nonelderly Adult Uninsured Workers by Work Status, 2006 Source: Employee Benefit Research Institute estimates from the March Current Population Survey, 2007 Supplement.

5. Income & Poverty Status Percentage Uninsured Among Nonelderly Population by Family Poverty Status, 2006 Source: Employee Benefit Research Institute estimates from the March Current Population Survey, 2007 Supplement.

6. Age Percentage Uninsured Among Nonelderly Adults by Age, 2006 Source: Estimates from the March Current Population Survey, 2007 Supplement.

7. Uninsured Children Nearly twenty percent of uninsured Americans – 8.7 million individuals – are children. The likelihood that a child is uninsured has fallen from 13.9 percent in 1998 to 10.5 percent in 2004. It has since increased to 11.7 percent in 2006. While children are more likely to be insured than non-elderly adults, health insurance is particularly important for children. Uninsured children are more likely than insured children to lack a usual source of health care, to go without needed care and to experience worse health outcomes.1 Percentage of Children Under Age 18 Without Health Insurance, 1994-2006 Source: Employee Benefit Research Institute estimates from the Current Population Survey, March 1995-2007 Supplements. Note: 1994-2003 data are adjusted for Census correction announced in March 2007.

8. Employment-Based Coverage Almost all employers with more than 200 workers offer health benefits (98 percent in 2007). In contrast, 45 percent of firms with three to nine employees offered health insurance in 2006.4 Percentage of Employers Offering Health Benefits by Firm Size, 1996-2007 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits.

9. Different Policies to Deal with each group • The private market has shown a consistent and long-term inability to cover these groups • Individual citizens arbitrarily fall into these groups • Because they are low income, work for a small firm, are children in a family without insurance or have pre-existing conditions – neither efficient or equitable • The market has failed to offer them coverage, and only if the government somehow mandates and funds their health-care will they be covered