1. Hoffman, Catherine B. ScD, MN, RN


Nurses deal with the fallout of a nation with more than 46 million uninsured. Affecting the patients and families they care for, the hospitals and clinics they work in and manage, and the communities they serve, nurses have a credible standing from which to debunk any myths about who the uninsured are, why they are uninsured, and the difference that health insurance makes in their health and well-being. This article on the uninsured and health insurance coverage among low-income Americans outlines key facts about the uninsured and the primary cause of the problem-the affordability of health insurance.


Article Content

More Americans than ever go without health insurance from either government programs or private insurers, and nurses are seeing patients as worried about paying for health care as they are about lowering their blood pressure. Grasping the size of the problem can be daunting: more than 46 million U.S. residents-nearly one in five (18%) of the nonelderly population-had no health insurance at some point in 2005.1 And according to my calculations, there are almost 20 uninsured people for every nurse in the United States, about 45 for every staffed hospital bed, and 7,800 for every registered hospital. (Statistics and cost estimates not otherwise referenced in this article represent my own analysis.)


The large number of uninsured people combined with the broader impact on families and communities across the country make this one of our nation's top public health problems. Surveys show that most Americans believe that reducing the number of the uninsured is a priority, but fixing the problem takes a degree of social consensus and political will that our nation has not been able to muster.2, 3


In the meantime, nurses manage the consequences, one patient at a time. This gives them a credible standing from which to debunk myths about who the uninsured are, why they are uninsured, and the difference that health insurance makes in their health and well-being. While a great deal is known about the issue, the basic facts often get muddled in the public debate. This article presents several simple truths about America's uninsured.

Figure. Sheila Wesse... - Click to enlarge in new windowFigure. Sheila Wessenberg at her home in Coppell, Texas, in 2003. Sheila died of breast cancer in May 2005, after several years of inconsistent treatment when she, her husband, Bob, and their two children lost their health insurance. In the last two years of her life Sheila received much of her care in the ED; it was the only place she couldn't be denied treatment. For more on the Wessenbergs' story, see page 44.

FACT: Only a small share of the uninsured choose to go without health insurance because they believe they do not need it.


A 2003 national survey showed that the majority of people who don't have health insurance (52%) said that they forgo coverage because they cannot afford it, not because they don't need it.4 A fifth of these (11% of the total number of uninsured) said they were offered job-based health benefits but their share of the premium was unaffordable; 11% responded that they were not eligible for their employer's benefits. Only 7% in the same survey reported that they were uninsured because they didn't need coverage. Among young adults (ages 18 to 29 years), who are generally in better health than older adults, only 13% believed they did not need health insurance. Moreover, the uninsured are nearly twice as likely as the privately insured to report their health as being either fair or poor.1


FACT: Most of the uninsured are either full-time workers or are related to a full-time worker.


More than two-thirds (69%) of uninsured people work full-time or come from families in which at least one person is working full-time (see Figure 1, page 42).1 Even among those with low incomes (that is, less than 200% of the federal poverty level, or slightly less than $40,000 for a family of four in 2005), who make up the largest proportion of the uninsured, more than half (57%) are from families with full-time workers.

Figure 1 - Click to enlarge in new windowFigure 1. Characteristics of the Nonelderly Uninsured, 2005

Low-income people have the greatest risk of being uninsured. One out of every three people from low-income families with a full-time worker is uninsured. Were it not for the Medicaid program, millions more low-income Americans would be uninsured.1


FACT: Employer-sponsored health insurance is either not available or unaffordable for most of the uninsured; nongroup policies seldom fill the gap.


The majority of uninsured employees (56%) are not offered health benefits through their employer, while others are not eligible (14%).5 Even when insurance is offered by employers, many low-income workers cannot afford the out-of-pocket cost for family coverage, which averaged $2,713 per year in 2005 (see Figure 2, page 43).6

Figure 2 - Click to enlarge in new windowFigure 2. Annual Health Insurance Premium Costs, Employer-Based vs. Nongroup Plans, 2005

Only about 5% of the nonelderly are insured under a private nongroup health plan; this percentage hasn't changed much over time. Nongroup policies vary greatly in terms of benefits, cost sharing, and premiums. According to a Commonwealth Fund survey, "21% of working-age adults who had ever sought coverage on the individual market were turned down, charged a higher price because of a pre-existing condition, or had a health condition excluded from their coverage. One-third of adults with health problems were similarly declined" when seeking nongroup coverage.7


Private nongroup insurance premiums are based on a person's health risk and age and are usually much more expensive than comparable group plans. The average nongroup premiums shown in Figure 2, while considerably lower than the total cost of employer-sponsored group premiums, reflect the different population that nongroup insurance currently serves-younger, healthier people who are buying less-generous health benefits and settling for higher cost sharing and financial risk.6, 8 Note, however, that individuals pay more on average for nongroup plans than an employee's share of a job-based group premium, even though the scope of benefits would almost always be less (for example, $4,356 versus $2,713 per year for family coverage).


FACT: Most of the uninsured cannot afford health insurance.


Two-thirds of the uninsured earn low incomes or are from low-income families, making it difficult to afford health insurance (see Figure 1, at left).1 Consider, as an example, a family of four with one full-time worker earning between $20,000 and $30,000 a year, placing them above the federal poverty level (see Figure 3, page 43). Applying the average spending pattern for low-income families in this range means that after the basics of housing, food, and transportation, a little less than a quarter (just under $6,000) is left for everything else-including child care, utility bills, clothing, educational costs, repairs, loan repayments, and health care.9, 10

Figure 3 - Click to enlarge in new windowFigure 3. Annual Expenditures in Household Budgets with Incomes of $20,000-$30,000

If they had family coverage through an employer, the employee's average annual contribution would amount to almost half of the family's remaining budget-$2,713 a year (see Figure 2). If they did not have employer health benefits and obtained a nongroup policy, the average annual premium would be even higher ($4,356), leaving them only about $1,500 per year for all expenses other than shelter, food, and transportation.


For most low-income families health insurance is seldom affordable. In this example, family coverage for the average employee through an employer would consume about 11% of the family's income, while nongroup coverage would require about 18%. In addition to premiums, they must also pay out-of-pocket costs (deductibles and copayments), which increases the financial burden and can affect their health care decisions.


FACT: In recent years, growth in the number of uninsured Americans has been driven by low-income adults.


The number of uninsured Americans grew by almost six million between 2000 and 2004 as the country's economy turned downward.11 More people shifted from the middle class into the poor and near-poor income groups, where the chances of being uninsured are much higher. Significant decreases in employer-based coverage affected both children and adults, but the loss for children was offset by increases in enrollment in Medicaid and the State Children's Health Insurance Program. All of the growth in this time period occurred among adults, and more than two-thirds of these adults were poor or near-poor. In 2005, even with the improving economy, the number of the uninsured grew by 1.3 million. The large majority (1.1 million) were from low-income families, and the number of uninsured children began to slightly increase for the first time since 2000.1


FACT: Most of the uninsured are U.S. citizens, not new immigrants with temporary employment.


Almost 80% of the uninsured are American citizens.1 In the annual Census Bureau survey that measures health coverage, documented immigrants are not distinguished from those who are undocumented, so differences in their health insurance status are unknown. However, we do know that new immigrants (those in the United States for less than five years) are far more likely to be uninsured compared to citizens (51% versus 15%) because, even though they are as likely as native residents to work full-time, new immigrants often fill low-wage labor and service jobs that do not offer health benefits.1 These new immigrants make up only 2% of the total nonelderly population in this country; therefore, while they have a high risk of being uninsured, they account for a relatively small portion of the uninsured population (7%). More established immigrants (those who have lived in this country for five years or more) make up another 15% of the uninsured. While the number of uninsured noncitizens increased in the past decade, so did the number of uninsured citizens, and there are simply too few noncitizens for them to dominate the overall trends in health insurance coverage.12


fact: The uninsured often cannot find sources of free or charity care that meet their needs.


Less than a quarter of families with at least one uninsured member said they had received free or reduced-rate care.13 When asked in a 2003 survey if they knew of places in their community that offered affordable medical care for the uninsured, less than half of the respondents (48%) reported using or being aware of safety-net providers.14


Discounted services are not common and charges to uninsured patients for some services, including hospital care, may actually be higher than amounts paid by insured patients, whose charges are negotiated by third-party payers. Those who have been uninsured for at least one year pay about one-third of health care costs themselves and have substantial problems paying medical bills, even though they frequently forgo needed care.15, 16


As fewer physicians are able or willing to treat those without health coverage, more uninsured patients have turned to the safety nets of their local hospitals for care. A study conducted from 1996 to 2001 found the number of physician's office visits among the uninsured had dropped by nearly 40%, while ED visits increased by 10%.17 Interestingly, growth in ED visits was higher among the privately insured (24%) during this same time period.


fact: Health care costs that the uninsured do not pay themselves are largely covered by federal and state dollars.


Contrary to common belief, there is little evidence that those who have private insurance subsidize, through higher premiums, the uncompensated costs of caring for the uninsured. However, one study suggests the premium markup may be as high as 8% because of such uncompensated care.18 These costs are not simply absorbed by those providing care-substantial federal and state tax dollars are appropriated each year to pay providers for their care of the uninsured.19


In 2004 the total uncompensated costs for care of the uninsured was about $40.7 billion (see Figure 4, above left). Federal and state tax funds available to pay for these costs were $35 billion, subsidizing approximately 85% of the total.15 The federal government pays the largest share of such costs with Medicare and Medicaid funds, as well as payments to direct service programs (for example, programs under the Department of Veterans Affairs, the Indian Health Service, and community health centers). States also use Medicaid funds for uncompensated care, as well as to subsidize direct service programs. Three-quarters of federal and state dollars for uncompensated care go to hospitals, with the rest going to direct service programs. Physicians receive no government subsidies for providing charity care unless they work for these types of organizations.

Figure 4 - Click to enlarge in new windowFigure 4. Payment Sources for Uncompensated Care, 2004

Considering the current government spending on the uninsured, the additional funding that would be needed to expand health coverage to all uninsured U.S. residents is much less than various proposals have estimated. Such a change, however, would require major shifts in the flow of government health care dollars, redistributing subsidies that go to hospitals and other providers to health insurance companies. Health care providers would be unlikely to support such a shift unless health coverage were guaranteed for all Americans.15


fact: Federal funding, even with recent increases for more qualified health centers, has not kept pace with the growth in the number of the uninsured.


Recent federal policy to help the uninsured has focused on providing more care by expanding community health centers; federal spending for such centers increased by more than 50% between 2001 and 2004. Overall federal spending, however, has not kept pace with the growth in the number of the uninsured. Per capita spending on the uninsured has actually declined (see Figure 5, page 46). Overall federal spending per uninsured person decreased by roughly 9% between 2001 and 2004.20

Figure 5 - Click to enlarge in new windowFigure 5. Federal Spending on the Safety Net per Uninsured Person, 2001-2004*

FACT: Health insurance matters. It makes a difference in when, where, and whether people get necessary health care and, therefore, how healthy they are.


The uninsured are far more likely than the insured to postpone or forgo needed care. They are also less able to afford prescription drugs and follow through with treatments.16 The consequences of these decisions are real. Because the uninsured are significantly less likely to have a consistant provider or a usual place to go for care, they receive less preventive care and health management and are more likely to be hospitalized for avoidable health problems. They are more likely, when hospitalized, to receive fewer services and to die in the hospital as compared with insured patients.21


It has been estimated that having health insurance improves health overall and could reduce mortality rates for the uninsured by 10% to 15%. The Institute of Medicine, in its analysis of the costs to society of having so many Americans uninsured, estimated that among adults 25 to 64 years old, the number of excess deaths associated with being uninsured is approximately 18,000 per year-a figure comparable to the number of deaths from diabetes or cerebrovascular disease.22


FACT: Nurses can make a difference.


Relatively few parties in the policy debates about the uninsured bring to the table what nurses can-credible, hands-on experience in dealing with the fallout of more than 46 million uninsured Americans. While hard facts are essential to shaping policy, it is the voices of the uninsured and those who care for them most intimately that, in the end, may actually move reforms forward.


How much do you know about who's uninsured in the United States? Take the following true-or-false quiz and find out.


1. Many young adults go without health insurance because they believe they don't need it.


2. Most of the uninsured are unemployed, either temporarily or for a long period.


3. The average worker's out-of-pocket share of the premium for family insurance coverage is now more than $2,500 per year.


4. Most uninsured families are poor or near-poor, and this population accounts for the continued growth in the number of uninsured.


5. New immigrants account for most of the recent growth in the number of uninsured people.


6. ED use has increased at a faster rate among the uninsured than among those who have private insurance.


7. Health care costs not paid by uninsured people directly are covered largely by federal and state dollars.


8. The recent increase in federal funding for community health centers has expanded the number of centers, but these funds have not kept up with the growth of the uninsured.


9. Being uninsured, by itself, is associated with premature death among adults under age 65.



(Answers: 1. false; 2. false; 3. true; 4. true; 5. false; 6. false; 7. true; 8. true; 9. true)




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13. Kasper JD, et al. Gaining and losing health insurance: strengthening the evidence for effects on access to care and health outcomes. Med Care Res Rev 2000;57(3):298-318. [Context Link]


14. May JH, et al. Most uninsured people unaware of health care safety net providers. Issue Brief Cent Stud Health Syst Change 2004(90):1-4. [Context Link]


15. Hadley J, Holahan J. The cost of care for the uninsured: what do we spend, who pays, and what would full coverage add to medical spending? Issue update. Washington, DC: Kaiser Commission on Medicaid and the Uninsured; 2004 May. Pub. #7084. [Context Link]


16. Kaiser Commission on Medicaid and the Uninsured. Access to care for the uninsured: an update. Washington, DC: The Commission; 2003 Sep. Pub. #4142. [Context Link]


17. Cunningham P, May J. Insured Americans drive surge in emergency department visits. Issue Brief Cent Stud Health Syst Change 2003(70):1-6. [Context Link]


18. Families USA Foundation. Paying a premium: the added cost of care for the uninsured. Washington, DC: The Foundation; 2005 Jun. Pub. #05-101. [Context Link]


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20. Hadley J, et al. Federal spending on the health care safety net from 2001-2004: has spending kept pace with the growth in the uninsured? Washington, DC: Kaiser Commission on Medicaid and the Uninsured; 2005 Nov. Pub. #7425. [Context Link]


21. Hadley J. Sicker and poorer-the consequences of being uninsured: a review of the research on the relationship between health insurance, medical care use, health, work, and income. Med Care Res Rev 2003;60(2 Suppl):3S-75S. [Context Link]


22. Institute of Medicine. Care without coverage: too little, too late. Washington, DC: National Academies Press; 2002. p. 161-5. [Context Link]