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Senate Committee Examines the Uninsured

While the number of uninsured Americans decreased by one million from 1998 to 1999, an estimated 42 million people were uninsured in 1999, and three-fourths of all uninsured adults were employed. In an effort to better understand who is uninsured and why, the Senate Finance Committee held a March 13 hearing to examine the issue.

Opening the hearing, Committee Chair Charles Grassley (R-IA) stated, “For most of us, quality health care is an expectation. Whether it’s regular check-ups or visits to specialists, it is often easy to take our health care coverage for granted. But we must remember that millions of Americans and their families are not so lucky.”

Kathryn G. Allen of the General Accounting Office detailed the recent trends in the employment and income status of the uninsured, as well as other demographic characteristics. Ms. Allen noted that the uninsured tend to work part-time, are more likely to work for small companies, and tend to work in certain industries, such as agriculture or construction where insurance is not offered. She added, “Not surprisingly, persons with low incomes are most likely to be uninsured, with most uninsured individuals in families earning less than 200 percent of the federal poverty level.” However, “8 percent of those earning more than 4 times the federal poverty level are also uninsured.” Ms. Allen added that young adults, Hispanics, and immigrants also are disproportionately uninsured.

Noting the “adverse health and financial consequences” of being uninsured, Ms. Allen stated, “The uninsured are hospitalized at least 50 percent more often than the insured for ‘avoidable hospital conditions’ like pneumonia and uncontrolled diabetes; uninsured people with various cancers are more likely diagnosed with later-stage cancer than individuals with insurance; and uninsured pregnant women receive prenatal care later in their pregnancy and have fewer doctor visits than the privately insured and, as a result, their newborn infants have a 31 percent greater risk for adverse health outcomes such as physical disability or mental retardation.”

Diane Rowland of the Henry J. Kaiser Family Foundation and the Kaiser Commission on Medicaid and the Uninsured told the committee that “the limits of employer-sponsored and privately purchased health insurance leave millions of low-income children and adults at risk for being uninsured.” She stated that over 70 percent of all uninsured workers are not offered job-based health coverage, and that for the average low-income family, a $6,000 private insurance family policy would consume a quarter or more of the family income.

Ms. Rowland noted that congressional efforts to allow states to expand Medicaid coverage to children under the age of 18 who live below the poverty level, as well as pregnant women and children under age six at slightly higher income levels, have made an impact on those populations. However, there are still many individuals who have been left behind. “Over time, as eligibility expansions focused on children and pregnant women, coverage of parents lagged behind, often remaining at state welfare levels. As a result, millions of low-income children have gained eligibility while their parents, unless pregnant, remain uninsured,” she stated. Ms. Rowland added, “The most glaring omission in Medicaid coverage, however, is the exclusion of coverage for low-income childless adults. Nearly half of the uninsured low-income population falls outside Medicaid’s reach because they are adults without children.”

Mary R. Grealy of the Healthcare Leadership Council (HLC) discussed the issue of employment with respect to the uninsured. “A small business survey conducted last year by the Employee Benefits Research Institute, et al. found that 53 percent of small businesses not offering insurance cited affordability as a major reason preventing such an offer,” stated Ms. Grealy. She added, “The same survey found that 57 percent of small employers do not know that health insurance premiums are 100 percent tax deductible. This indicates that perhaps a lack of information and education contribute in some way to the inability or unwillingness of small business insurance offerings.”

Additionally, another survey by the HLC found that some small businesses would offer health insurance if the premiums were reduced or subsidized by 10 percent, and many small businesses would offer coverage if the premiums were reduced or subsidized by 25 percent. The survey also found that a number of small businesses would drop their coverage if the premiums were to rise by 10 percent in the future.

Richard Johnson of the Urban Institute focused his remarks on the problems facing the near elderly, individuals he defined as between the ages of 55 and 64, in obtaining health care coverage. According to Mr. Johnson, while the near elderly are as likely as younger individuals to be uninsured, lack of insurance for this population can be more serious because they are more likely to have serious health problems. “For example, individuals at ages 55 to 64 are six times as likely to have cancer than those ages 35 to 44 and five times as likely to suffer from heart disease….Average health expenditures are twice as high for those between the ages of 55 and 64 than for those 35 to 44.”

Noting that individuals cannot qualify for Medicare until age 65, Mr. Johnson stated that many near elderly retire by the time they reach their early sixties. “At ages 62 to 64, only 48 percent of men were employed in 1998, compared with 85 percent at ages 50 to 54. For women, the employment rate dropped in 1998 from 71 percent for those between the ages of 50 and 54 to 36 percent for those ages 62 to 64.” While some individuals may have access to employer-sponsored health insurance after retirement, known as retiree health benefits, a 1998 survey found that only 37 percent of men and 34 percent of women ages 50 to 54 had access to retiree health insurance.

Adding that many near elderly do not qualify for Medicare or Medicaid, Mr. Johnson said their only alternative is private insurance. “There are a number of important drawbacks to relying upon the private nongroup market at older ages. A primary concern is the affordability of nongroup coverage….The affordability issue is compounded by the health problems that many retirees have when they enter the nongroup market, increasing the risk-rated premiums they face,” stated Mr. Johnson.

Leighton Ku of the Center for Budget and Policy Priorities discussed health insurance coverage of immigrants. Noting that half of people living in immigrant families are uninsured, Mr. Ku stated that a number of factors contribute to immigrants’ uninsured status, including current government policies that prevent certain immigrants who entered the United States after 1996 from qualifying for Medicaid or the State Children’s Health Insurance Program (SCHIP). He urged members of the committee to consider restoring Medicaid and SCHIP eligibility to children and pregnant women who are legal immigrants.

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