BCBSA

Appendix

The Diversity of the Uninsured: 'Squeezed Outs,' 'Missing Outs' and 'Opt Outs'

According to the U.S. Census Bureau's Current Population Survey (CPS), 44.8 million people, or 15.3 percent of the total population, were without health insurance in 2005. The Employee Benefit Research Institute (EBRI) estimates that 17.2 percent of non-elderly Americans were uninsured in 2005 versus 16.1 percent in 2000.

The uninsured is a diverse group. In 2004, BCBSA, working with the Actuarial Research Corporation (ARC), released an analysis showing the uninsured population is composed of three key segments - those who may have difficulty purchasing coverage, those already eligible but unenrolled in public programs and those with higher incomes. Researchers from the Urban Institute and Johns Hopkins recently updated this analysis to reflect more current data. Their analysis of the uninsured (Figure A) shows that:

  • Over half are ineligible for public programs but may have difficulty affording coverage. Many of these people work for small firms that do not offer coverage.
  • One-fourth of the uninsured are reachable through public programs under current rules, such as Medicaid and the SCHIP program for children - and 74 percent of all uninsured children are eligible but unenrolled in public programs.
  • One-fifth earn relatively higher incomes and may be able to afford coverage on their own.

Figure A - Uninsured Key Segments by Percent of Total Uninsured
2006 Urban Institute Analysis * 2004 BCBSA Analysis *
Ineligible for public programs but need financial assistance 56% 49%
Eligible but unenrolled for public programs under current rules 25% 30%
Higher income ** 20% 21%

 

* BCBSA analysis based on CY2003 CPS data; Urban Institute/Johns Hopkins based on CY2004 CPS data

** BCBSA defined family income at $50,000; Urban Institute/Johns Hopkins at $56,550 (300% of FPL 2004)

'Squeezed Out:' Americans Ineligible For Public Programs Who May Not Be Able To Afford Coverage

Over half of the uninsured may have difficulty finding coverage they can afford.

Fifty-six percent - about 25 million - uninsured individuals are ineligible for public programs such as Medicaid and SCHIP but have difficulty affording health coverage (Urban Institute, 2006). Some may be between jobs or recent college graduates who decide to go without coverage or they work for firms that do not offer health benefits. Others cannot afford healthcare insurance because they are unemployed or do not earn enough to pay for coverage on their own. Some may be offered coverage from their employers, but cannot afford their share of the premium. Seventeen percent of very low income workers earning $15,000 or less annually are offered but decline coverage (EBRI, 2005).

Many lower income individuals do purchase private coverage, however - 22 percent of individuals earning less than 100 percent of the FPL - and 38 percent between 100 and 149 percent of FPL purchase private coverage (EBRI, 2005).

'Missing Out:' Americans Reachable Through Existing Public Programs

One-fourth of the uninsured - and nearly three-quarters of uninsured children - are reachable through existing public programs.

A quarter of all non-elderly uninsured individuals are reachable through existing government health programs such as Medicaid and SCHIP under current rules.

About 8.1 million children - 10.9 percent of all children under age 18 - were uninsured in 2005. Of that number 74 percent are eligible but not enrolled in public programs. Also, 83 percent of uninsured children are in families earning less than 300 percent of the FPL ($61,950 for a family of four). Over 70 percent of low-income uninsured children live in families already receiving other public assistance benefits such as food stamps and school lunch programs (Urban Institute, 2005).

There are several reasons for the lack of enrollment in public programs. Some may be unaware they are eligible for these programs. Others may perceive a stigma associated with government programs. Still others may be unable to maneuver through complicated application procedures, extensive paperwork and language barriers. In some cases, families themselves may not make the necessary efforts to obtain coverage.

'Opting Out:' Higher Income Americans

One-fifth of the uninsured earn relatively higher incomes.

One-fifth of the uninsured earn 300 percent of the FPL ($51,510 for a family of three) or more annually and may be able to afford health insurance. Thirteen percent of the uninsured earn $75,000 or more per year.

Of the uninsured earning 300 percent of the poverty level or more:

  • Forty-four percent are young adults under age 35.
  • Eighteen percent are Hispanics.
  • Twenty-three percent are workers or dependents in small firms.
  • Twenty-one percent are self-employed workers or dependents.

Twenty-six percent of relatively high income uninsured workers (earning $75,000 or more annually) are eligible for employer coverage but decline it (EBRI, 2005). Some higher-income individuals may not believe they need coverage - perhaps because they are young and/or healthy. Others may be unaware of coverage options for individuals or may overestimate the cost of health coverage. Still others may not know about important tax advantages - such as the fact that self-employed individuals can deduct the full cost of coverage.