A Closer Look at America's Uninsured

January 1, 2010

This article is part of a series released during national Cover the Uninsured Week May 1-7, 2006. The following article is taken from the text of a speech prepared by Health Insurance , founder of MedSave.com, to be delivered to various industry groups.

Forty five million Americans have no health insurance. But these people are not who you might expect. We tend to think of these people as poor, unemployed, or not financially sophisticated. In fact the majority are not poor, according to U.S. census data. Most uninsured Americans belong to households whose income puts them comfortably in the midst of the middle class. Most are adults. Many have a college education. Most could afford health insurance, according to statistical data, but may believe that health coverage is unaffordable. Most are not aware of all their health insurance options. Many who are aware of their health coverage options choose to remain uninsured anyway based on their own assessment of the risks and benefits.

Americans are not required to maintain health insurance. While most Americans receive health insurance as a voluntary employee benefit, employers are not required to offer this coverage and employees are not required to participate. While every state has a requirement for citizens to carry automobile insurance and other types of commercial insurance, only one state has successfully passed legislation requiring health insurance. That state is Massachusetts, and the new law will be phased in starting in 20071.

On the other side of the issue, no American is refused basic medical care due to lack of ability to pay for it. Our extensive state welfare programs combined with a wide range of private and public health care programs ensure that all Americans who cannot afford to pay for health care eventually become eligible for some type of cost-subsidized plan. This empathetic approach may be admirable from a humanistic viewpoint but clearly provides an additional incentive for some people to take the risk of going without health insurance2.

In this sense, the problem of the uninsured was created by our own design. If we, as a nation, wished to have everyone insured we would simply legislate such coverage in the same way that we do for auto insurance. Perhaps if the Massachusetts plan is successful, other states or the federal government will follow the lead. In the meanwhile, it makes sense to focus on the portion of the uninsured issue that is most easily solved. This article focuses on the sub-groups that make up the larger group of uninsured and points out some of the most obvious approaches to a solution.

Most uninsured Americans are adults. The success of national and state programs like "Insure Kids Now" that promote health insurance coverage for kids is evident. The number of children without health insurance has significantly decreased in recent years. We can generally say that the only children without health insurance are those who have not heard about or found access to an existing program that would otherwise provide coverage. Ongoing efforts focus on "getting the word out" to populations of non-English speaking residents, often in rural areas.

Most can afford coverage. - Many of those who are uninsured say that they cannot afford health insurance. Yet the latest census data shows that the income of most Americans without health insurance is significantly more than poverty level plus cost of insurance. This indicates that it would be more accurate to say that they choose to place other financial priorities above health insurance. A person who suddenly faces the need to pay for health insurance from personal income might not be willing to give up their current lifestyle and make the financial changes that would be necessary to place health insurance higher on their list of financial priorities. In studies where people were asked the price of available health insurance, they tend to overestimate the cost. This indicates that the affordability issue may be at least partly matter of perception. Still, it makes sense to recognize that most uninsured Americans can afford coverage, but make an economic choice to allocate their income to other goods and services instead.

Many are in life transitions - The largest group of unemployed people can be classified as being in a life transition. This includes individuals who are physically relocating to a new community, have recently graduated, changed employment, started a business, are getting married, getting divorced, etc. The important thing to emphasize is that they are only temporarily without health insurance. They do not view their status as a chronic problem. In other words, most of the 45 million uninsured people in America will eventually find health insurance without any assistance from the government and without any change in our laws. Conversely, even if we had absolutely free universal health insurance, there would still be a sizable population in flux at any given time who were not covered. (This is also evident in other countries that provide "universal" health coverage; some people are still not covered at any given moment). For most uninsured Americans, the problem is not financial or legislative, but rather a natural process of progressing through life.

Newly hired employees are often not covered. Most group health insurance plans require s 90 day waiting period before coverage starts. Interim coverage is usually available, but many human resources professional say that they are unfamiliar with these health plan options. It would be relatively simple to train HR staff to direct new employees through the process of enrolling in temporary coverage.

Employees who are terminated from their jobs often do not receive full information about their health insurance options. Details of COBRA and COBRA alternative coverage.

Workers who have a gap in employment may go several months without health insurance. Many do not realize that affordable coverage is available.

Immigrants to the United States are not eligible for most health insurance plans. Special health insurance programs are available in all state to all immigrants who entered the United States within the past two years. This insurance is available without regard to health history.

Lower income individuals often do not know that they are eligible for state-assisted coverage. Publicity budgets for these programs tend to be under-funded so that promotion of these plans is inadequate.

Individuals with serious ongoing health problems are eligible for coverage under HIPAA.  Every state has at least one open-enrollment health plan. Yet many have complained that information is scarce and that they can not access the enrollment process for these health plans.

In total, about 16% of all Americans lack health insurance. The ratio is higher within certain demographic groups; up to 25% of all college students and an even higher percentage of recent U.S. immigrants.


1 The Massachusetts law

2 OnlineAdviser service fields over 5,000 questions per year about health care from individuals across the nation. One of the most common inquiries is about the risks of those who choose to carry no health insurance.

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