Middle-class uninsured?
Kaiser Commission on Medicaid and the Uninsured
March 2003
The New Middle-Class of Uninsured Americans - Is it Real?
by John Holahan, Catherine Hoffman, and Marie Wang
Summary
We conclude that data from the Census Bureau's 2002 annual report Health Insurance Coverage: 2001 has been misinterpreted when the majority of the newly uninsured are characterized as either middle- or high-income people. Using household income brackets that do not account for the composition of the household or the effect of general inflation on income when studying changes over time can create misunderstanding about who the uninsured are, as well as the effectiveness of different policy options intended to decrease the number of uninsured.
While we found that the number of high-income uninsured (400%+ of poverty or $56,512 for a family of three in 2001) grew by about 300,000 due to a loss of employer-sponsored coverage, this is substantially less than unadjusted data from the Census Bureau's report might indicate. We also found nearly a 300,000 decline in the number of middle-income Americans who lacked health insurance, largely because there were 800,000 fewer middle-income Americans. Many middle-income Americans lost jobs and/or income, contributing to the substantial increase in the number of people with incomes below 200% of the poverty level-where the likelihood of employer-sponsored coverage is much lower and uninsured rates are much higher. Most of the growth (1.3 million) in the uninsured was borne by low-income Americans with incomes less than 200% of the poverty level.
http://www.kff.org/content/2003/4090/4090.pdf
Comment: The tenor of this report seems to indicate that it is reassuring that the increase in the numbers of uninsured has been primarily in the low-income sector, and not in the middle- and high-income sectors as previously reported based on unadjusted Census Bureau data. Rather than a decline in the rate of insurance in the middle-income sector, there has been a decline in income with a large shift to the low-income sector and a concomitant loss of employer-sponsored coverage. The obvious conclusion is that many middle-income Americans not only lost their insurance, but they also lost their incomes - doubly bad news.
The authors make the point that this difference is important from a policy perspective. Generally, many employers of low-income individuals do not have adequate financial resources to provide insurance coverage for their employees. Studies of tax credits and association health plans indicate that they would fall far short of the need. Thus, policies designed to enhance public programs for low-income individuals seem to be in order. If so, we should be increasing eligibility and funding for these programs, especially Medicaid. But the exact opposite is taking place.
We simply won't get it right until we are prepared to accept the fact that we desperately need to pool all of our existing resources into one publicly-administered program. That would work just fine for all of us.