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NAVIGATION PNHP RESOURCES
Posted on November 30, 2006

Can the uninsured afford insurance?

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The Uninsured And The Affordability Of Health Insurance Coverage

By Lisa Dubay, John Holahan, Allison Cook
Health Affairs
November 30, 2006

We found that 24.7 percent of the uninsured are eligible for public health insurance programs, 55.7 percent are in the “need (financial) assistance” category, and 19.6 percent are likely to be able to afford coverage on their own. There is much variation in this distribution across population groups, with 74 percent of uninsured children being eligible for existing public programs and 57 percent and 69 percent of uninsured parents and childless adults, respectively, being in the “need assistance” category. Consequently, absent a universal coverage solution, a range of policies will be needed to address the problem of uninsurance.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.26.1.w22

Comment:

By Don McCanne, MD

Studies such as this have been used by conservatives to suggest that the problem of the uninsured is not a major issue, and therefore does not require comprehensive reform. They contend that most uninsured children are technically insured because they are eligible for the Medicaid and SCHIP programs. They also contend that many uninsured adults actually can afford coverage so they should be considered as being insured even though they opt not to purchase insurance.

The conservatives imply that the only real problem is the modest number of low-income adults, mostly without children, who cannot afford coverage. They suggest that all we need to do is to make available refundable tax credits limited to the poor, and the problem of the uninsured would largely vanish.

What is the reality?

Even though many children are eligible for Medicaid and the SCHIP programs, 100 percent enrollment can never be achieved because of financial, administrative, and logistical barriers. Attrition is also inevitable because of these same barriers plus fluctuations in eligibility. The only effective way to ensure that all children are covered is to enroll them at birth in a program that is permanent and not subject to any eligibility requirement such as the payment of premiums. That is not possible as long as we continue to segregate children from low-income families into separate medical welfare programs.

What about the 20 percent of uninsured individuals who can afford coverage? In this study, the threshold of affordability was defined as 300 percent of the poverty level. At this level, a family policy would cost 17.2 percent of family income, and that does not include out-of-pocket expenses for deductibles, coinsurance and non-covered services. It also ignores those who are uninsurable because of preexisting medical problems. In considering reform, this group should not be cast aside based on the dubious claim that they have the resources to make it on their own. They should automatically be included as well.

And tax credits for the poor? Much has been written about the deficiencies of tax credit proposals, but perhaps the most important is that the credits would be used to purchase plans with affordable premiums, which equates with plans that prevent access to care because of the lack of affordability of out-of-pocket costs. We don’t need affordable insurance premiums; we need affordable health care.

All of the uninsured need to have comprehensive health care coverage. Moreover, all of the underinsured need to have their coverage brought up to a level that removes significant financial barriers to care. That leaves out one group: the wealthy. But we really need to include them as well since they would be crucial to a system of equitably financing a universal health insurance program.

Instead of a range of policies that collectively fall far short of reform goals, we need an effective, one-size-fits-all national health insurance program that makes comprehensive care affordable for all of us.