Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
June 15, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 3699 words
HEADLINE:
TESTIMONY June 15, 1999 JOHN HOLAHAN DIRECTOR HOUSE WAYS AND
MEANS HEALTH UNINSURED AMERICANS
BODY:
Statement of John Holahan, Director Health Policy Center,
Urban Institute Testimony Before the Subcommittee on Health of
the House Committee on Ways and Means Hearing on Uninsured
Americans June 15, 1999 Thank you for the invitation to address the Committee
about the problem of the uninsured. In my testimony I will
focus on three aspects: differences between adults and children, differences
among states, and recent trends. There are three major conclusions: (1) The
United States has made a large effort to expand health
insurance coverage of low-income children through the Medicaid program. This has
continued more recently with the Children's Health Insurance
Program. Largely as a result of Medicaid, children are much less likely to be
uninsured than adults. Three- quarters of the
uninsured in the United States are adults, and 37 percent of
adults with incomes less than 200 percent of the Federal Poverty Line (FPL) are
uninsured. (2) There are significant differences among states
in the likelihood of being uninsured. For both adults and
children, the proportion of a state's population that lacks
health insurance is inversely related to private coverage,
predominantly provided through employer-sponsored plans. Medicaid and other
state programs offset differences in private coverage to some degree. However,
the problems states face in terms of the size of their
uninsured populations depend largely on the extent of employer
coverage. (3) The decline in employer-sponsored coverage over the last 15 years
has been well documented. This decline has resulted in increases in the number
of uninsured, despite expansions of Medicaid. Since 1994,
employer-sponsored coverage has actually increased, particularly for dependents.
The number of uninsured has continued to increase, but now the
major reason has been a decline in Medicaid enrollment. This testimony draws on
research that we have conducted at the Urban Institute. It relies on data
collected through the National Survey of America's Families (NSAF), a new survey
that provides information on over 100,000 children and non-aged adults
representing the noninstitutionalized civilian population under age 65.(1) The
NSAF, conducted from February to November 1997, was designed to provide both
state representative estimates in 13 states as well as reliable national level
estimates. The 13 states are Alabama, California, Colorado, Florida,
Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Texas,
Washington, and Wisconsin. The testimony also relies on analysis of several
years of Current Population Survey data. Adults and children. Figure 1 provides
data on rates of uninsurance, health status, and usual sources
of care.(2) The upper panel shows that adults are much more likely to be
uninsured than children; they are also more likely to be in
fair or poor health and to lack a usual source of care than
children. For families of all incomes, 17 percent of adults are
uninsured compared to 12 percent of children. Adults are also
three times more likely to lack a usual source of care (18 percent versus 6
percent) and more than twice as likely to be in fair or poor
health (12 percent versus 5 percent). Both adults and children
are worse off within low-income families, but the relative differences between
adults and children are similar to those for all families. The lower panel of
Figure 1 shows that uninsurance rates were 21 percent for low- income children
and 37 percent for low-income adults. Health status was worse
for low-income adults -- 23 percent of low- income adults were in fair or poor
health versus 8 percent of low- income children -- and they
were less likely to have a usual source of care -- 27 percent of low-income
adults versus 10 percent of children lacked a usual source of care. The finding
that low-income adults are less likely to have a usual source of care is
consistent with their being more likely to lack health
insurance, but somewhat inconsistent with the fact that they are in poorer
health. Table 1 examines the insurance coverage of adults and
children in more detail. The data show that, for families of all incomes, adults
are slightly more likely than children to have private coverage, 75 percent
versus 69 percent. However, they are much less likely to be covered through
public programs (primarily Medicaid), 8 percent versus 20 percent. This results
in a lower uninsurance rate for children than for adults. Most of the
differences between adults and children are because of different insurance
arrangements of those below 200 percent of the FPL. Low-income adults are only
slightly more likely to have private coverage than children, 44 percent versus
40 percent. However, low-income children are far more likely to have public
coverage, 39 percent versus 20 percent, because of the poverty- related Medicaid
expansions and because several states have other programs to subsidize
health insurance for low-income children. The result of the
more extensive public coverage of children is that the uninsurance rates for
low-income children are substantially below those of low-income adults.
Variations among states in health insurance coverage: Children.
State differences in health insurance coverage of children are
shown in Figure 2. Private coverage (employer-sponsored and privately purchased
insurance) for children of all incomes varies from a low of 56-58 percent
(Mississippi, Texas) to a high of 84 percent (Wisconsin). Public coverage also
varies from a high of 23-26 percent (California, Mississippi, New York, Texas,
and Washington) to a low of 10-15 percent (Colorado, Minnesota, New Jersey, and
Wisconsin). Public coverage is high where there are ambitious public programs
that provide coverage such as in California, New York, and Washington. Public
coverage is also high where there is a large low-income population, such as
Mississippi and Texas. The high levels of public coverage in California and New
York reflect both broad coverage and large low- income populations. In general,
high levels of public coverage do not offset low levels of private coverage,
with the result that states such as Mississippi and Texas have the highest
uninsurance rates. Because of their high rates of private coverage, states such
as Massachusetts, Michigan, Minnesota, and Wisconsin have the lowest rates of
uninsurance. Data in Figure 3 show that public coverage has a greater impact
among lower-income children than among all children. States with public programs
that have had broad coverage expansions, e.g., Massachusetts and Washington, or
where existing eligibility rules bring in large numbers of children because
there are so many low- income families, e.g., California and New York, have the
highest rates of public coverage. Public coverage does more to offset low
private coverage among low-income children than for all children. For example,
while New York and Washington have below-average rates of private coverage for
low-income children, they have above-average rates of public coverage, and as a
result, have below-average rates of uninsurance. Public coverage, however, does
not always offset low levels of private coverage. For example, Texas and
Mississippi both have below-average levels of private coverage. Both have levels
of public coverage that are not significantly different from the national
average. As a result, they have uninsurance rates of 32 and 28 percent,
respectively, that are well above the national average. Colorado has levels of
private coverage of low-income children similar to the national average, but
public coverage is considerably below average. The result is an uninsurance rate
that is significantly higher than the national average. Finally, Massachusetts
stands out as a state whose private coverage is equal to the national average,
but that also has very high rates of public coverage. The result is one of the
lowest rates of uninsurance of low-income children in the nation. Some states
with high rates of public coverage of low-income children still end up with
relatively low rates of public coverage of children overall because they have
relatively small low-income populations -- for example, Massachusetts. The
opposite is true for a state like Texas. For example, Texas covers 39 percent of
its low-income population (less than Massachusetts, at 47 percent) but 23
percent of its entire child population (versus 18 percent in Massachusetts).
Another interesting contrast is that of Minnesota and Mississippi. Minnesota
covers 41 percent of its low-income population, but only 15 percent of its
entire population. Mississippi, in contrast, covers 36 percent of its low-income
population, about equal to the national average, but 24 percent of its entire
population. This suggests that it is both public policy and the size of the
low-income population to which those policies are directed that will affect the
proportion of children in a state covered by public programs. This explains why
states such as Texas and Mississippi cover a higher proportion of their children
through public programs than states such as Massachusetts and Minnesota,
typically regarded as states with very generous policies. Variations among
states in health insurance coverage: Adults. A similar picture
emerges for adults. Figure 4 shows that private coverage varies from 66-68
percent (California, Florida, Mississippi, and Texas) to 82-86 percent
(Massachusetts, Michigan, Minnesota, and Wisconsin). Public coverage varies from
10 to 12 percent in California, Mississippi, and Washington to as low as 4
percent in Wisconsin and 5 percent in New Jersey. Public coverage does less to
offset variations in private coverage among adults than among children. Thus,
states such as California, Florida, Mississippi, and Texas have the highest
rates of uninsurance (21-27 percent), while states such as Massachusetts,
Michigan, Minnesota, and Wisconsin have the lowest rates of 9 to 11 percent.
Because there is less variation in public coverage for adults than for children,
the variation in uninsurance rates more closely tracks the variation in private
coverage. Public programs are, again, more important for low-income nonelderly
adults than for all nonelderly adults. Figure 5 shows that states such as
Massachusetts, Minnesota, New York, and Washington have the highest rates of
coverage in public programs. But again, this public coverage usually does not
offset the variations in private coverage. For example, California and Texas had
very low rates of private coverage, 35 and 36 percent, respectively.
California's 22 percent of low-income adults with public coverage and Texas's 14
percent did not offset these low rates of private coverage. Consequently, those
states had higher- than-average uninsurance rates for low-income adults; 43
percent in California and 50 percent in Texas. In New York, a relatively high
rate of public coverage, 27 percent, did offset the low rate of private
coverage, giving New York an uninsurance rate close to the national average. An
exception is Colorado, which had such a low rate of public coverage, 14 percent,
that it had an uninsurance rate comparable to the national average despite
having relatively high rates of private coverage. As was observed for children,
some states typically thought of as having very generous public programs
actually have below-average rates of public coverage for adults as a whole. For
example, Massachusetts, which had above-average coverage of the low-income adult
population, had slightly below-average coverage of the adult population as a
whole. This is because Massachusetts has a relatively small low-income adult
population. At the other extreme, Mississippi and California, which have about
average coverage of the low-income adult population, have above-average coverage
of the adult population as a whole because of their large low-income
populations. Why does the number of uninsured continue to grow?
The number of uninsured in the United States has continued to
increase, but for different reasons in the past few years (1994-1997) than in
the prior period (1989-1993). Table 2 provides information on coverage for all
nonelderly and for adults and children; Table 3 provides information on coverage
for individuals in households with incomes below 200 percent of the FPL, between
200 and 399 percent of the FPL, and at or above 400 percent of the FPL. The
tables show the number of individuals by type of coverage in 1989- 93 and
1994-97, as well the average annual growth rates. The reason for the break
between 1993 and 1994 is that major changes were made to the Current Population
Survey that make comparisons of trends before and after inappropriate. The years
1993-94 are an important breakpoint for other reasons as well. About this time,
the economy had emerged from the 1990-92 recession and began a long period of
economic growth. In addition, the Medicaid expansions to coverage children and
pregnant women had been phased in, and state welfare reform efforts began to
affect Medicaid enrollment. Table 2 shows that the number of
uninsured increased by 6.6 million (4.4 percent annually)
between 1989 and 1993. The number of uninsured children and
adults increased by 1.3 and 5.3 million, respectively (2.7 and 5.1 percent
annually). For both children and adults, there were declines in
employer-sponsored coverage, particularly for dependents. The Medicaid
expansions partially offset the declines in employer-sponsored coverage for both
groups. During the 1994-1997 period, the number of nonelderly
uninsured increased by 3.5 million (2.9 percent annually),
while the number of uninsured children and adults increased by
0.9 and 2.6 million, respectively (2.8 and 2.9 percent annually). But the
increases in the uninsured in the latter period occurred for
different reasons. First, there was a drop in Medicaid of about 1.9 million
people (1.2 million children and 0.7 million adults, or 3.1 and 2.5 percent
annually, respectively). There were also decreases in other public coverage of
0.4 million; this was due principally to reductions in military-related coverage
(e.g., CHAMPUS, Veterans' Administration) presumably due to military downsizing.
There was also a reduction of 0.6 million in other private coverage, possibly
reflecting the increased cost of health insurance in the
private nongroup market. These reductions in Medicaid, other public and other
private coverage would have resulted in even greater increases in the
uninsured had it not been for increases in employer-sponsored
coverage. The number of adults covered through their own employers increased by
about 2.5 million or by 1.1 percent annually, while the number of dependent
children covered increased by 2.3 million or 1.7 percent annually and the number
of dependent adults increased by 1.2 million or 1.3 percent annually. Thus,
unlike the previous period, the increase in employer coverage kept the number of
uninsured from increasing by more than it otherwise would have.
Table 3 provides similar data, disaggregated by income category. For those below
200 percent of the FPL, there was a large increase in Medicaid enrollment (7.4
million or 10.7 percent annually) between 1989 and 1993. There were also smaller
increases in employer-sponsored coverage as well as other public and other
private coverage. But because of a large increase in size of the population
below 200 percent of the FPL, the number of uninsured increased
by 3.8 million (3.6 percent annually). Between 1994 and 1997, there were large
reductions in Medicaid enrollment (about 2.0 million), in other public coverage
(0.4 million), and in private nongroup coverage (1.1 million). Because of these
declines, the number of uninsured increased by 1.3 million. The
increases would have been larger had it not been for the strong economy reducing
the number of people below 200 percent of the FPL. For those at the other end of
the income distribution, i.e., 400 percent of the FPL and over, Medicaid and
other public programs are relatively unimportant. This income group experienced
a reduction in employer-sponsored coverage between 1989 and 1993, and as a
result the number of uninsured increased by 1.0 million, or 7.7
percent annually. Between 1994 and 1997 the number of uninsured
continued to increase, again by 1.1 million or 9.7 percent annually. In this
period there were significant increases in employer-sponsored coverage and in
nongroup coverage, but these were not sufficient to match the substantial
population growth in this income range. In sum, these results mean that between
1994 and 1997 low-income populations were adversely affected by significant
reductions in Medicaid (2.0 million) and not helped by the increase in employer
coverage. They also experienced substantial drops in private nongroup coverage.
The number of uninsured among families with incomes below 200
percent of poverty increased by 1.3 million. Had it not been for a decline of
2.5 million in the total number of people below 200 percent of the FPL, the
increase in the number of low-income people who were uninsured
would have been much higher. For higher-income adults and children, the
increases in employer coverage and in private nongroup coverage were
substantial, but not sufficient to keep up with the growth in the number of
higher-income adults and children, resulting in an increased in the
uninsured of 1.1 million, or 9.7 percent annually. ENDNOTES 1.
Stephen Zuckerman, Niall Brennan, John Holahan, Genevieve Kenney, and Shruti
Rajan, "Snapshots of America's Families: Variations in Health
Care Across States," Washington, DC: The Urban Institute (Assessing the New
Federalism), February 1999. 2. The information presented in this testimony shows
a lower percentage of children and non-elderly adults being
uninsured than reported in the Current Population Survey. There
are two fundamental reasons for the differences between the two surveys and
their measures of insurance coverage. The first reason is that the NSAF measures
insurance coverage at the time of the survey, whereas the CPS asks about
coverage during the previous calendar year. The second reason for the difference
is that the CPS asks a series of questions about insurance coverage and then
assumes that any person not designated as being covered through any type of
health is uninsured. The NSAF uses a series of questions
similar in wording and sequence to the CPS, but adds a question that verifies
whether people who appear not to have coverage are, in fact,
uninsured. A substantial number of people who are initially
designated as uninsured change to being insured as a result of
the verification question. A detailed discussion of this issues is presented in
Zuckerman, et al. (1999). Figures and Tables Figure 1 Insurance Coverage,
Health Status and Lack of a Usual Source of Care: Adults and
Children Table 1 Insurance Coverage of Adults and Children All Incomes Below
200% Poverty Adults Children Adults Children Private 75% 69% 44% 40% Public 8%
20% 20% 39% Uninsured 17% 12% 37% 21% Source: Urban Institute,
National Survey of America's Families, 1997 Figure 2 Health
Insurance Coverage of Children Under 18, by State, 1997 Figure 3
Health Insurance Coverage of Low-Income Children Under 18, by
State, 1997 Figure 4 Health Insurance Coverage of Adults (18-64
Years of Age) by State, 1997 Figure 5 Health Insurance Coverage
of Low Income Adults (18-64 Years of Age) by State, 1997 Table 2
Health Insurance Coverage, 1989-1997 Nonelderly by Age Group
Type of Coverage1 (millions) Average Annual Growth 1989 1993 1994 1997 1989-93
1994-97 All Nonelderly 215.7 228.0 229.9 236.2 1.4% 0.9% Employer(own)2 71.3
72.2 75.1 77.4 0.3% 1.0% Employer(other)3 70.8 65.9 72.9 76.4 -1.8% 1.6%
Medicaid 15.1 22.9 23.0 21.1 10.9% -2.9% Other Public4 7.0 7.7 6.1 5.7 2.3% -
2.6% Other Private5 16.5 17.9 13.2 12.6 2.0% -1.6% Uninsured6 34.9 41.5 39.6
43.1 4.4% 2.9% Children: 0-18 67.9 73.2 74.0 75.5 1.9% 0.7% Employer(own) 0.2
0.4 0.6 0.4 23.8% -11.3% Employer(other) 42.4 41.0 44.3 46.6 -0.8% 1.7% Medicaid
7.8 12.3 13.3 12.1 12.1% -3.1% Other Public 2.8 3.5 1.7 1.5 6.0% -3.7% Other
Private 3.6 3.5 3.3 3.2 -0.9% -1.5% Uninsured 11.1 12.4 10.7
11.6 2.7% 2.8% Adults: 19-64 147.8 154.9 155.9 160.7 1.2% 1.0% Employer(own)
71.1 71.8 74.5 77.0 0.2% 1.1% Employer(other) 28.5 24.9 28.6 29.8 -3.3% 1.3%
Medicaid 7.3 10.6 9.6 8.9 9.7% - 2.5% Other Public 4.2 4.1 4.4 4.1 -0.3% -2.2%
Other Private 12.9 14.4 9.8 9.4 2.7% -1.6% Uninsured 23.8 29.1
29.0 31.5 5.1% 2.9% Source: Urban Institute, 1999. Based on data from March
Current Population Surveys, 1990-1998. Note: Excludes persons aged 65 and older
and those in the Armed Forces. Starting with the 1995 March CPS, significant
changes were made to the questionnaire regarding health
insurance coverage, including changes in question order, the use of
state-specific Medicaid program names, and the addition of more detailed
questions. In addition, the 1995 CPS reflects a change in the questionnaire's
sample framework. Therefore, it is recommended that data from 1994 and
afterwards not be compared to data from previous years in time-series analyses.
1 Although survey respondents can choose more than one type of
health insurance coverage, individuals were assigned one type
of coverage, following a hierarchy as listed. 2 Insurance through an
individual's own employer group health plan 3 Primary coverage
through another worker's employer group health plan (i.e.,
spouse or parent's plan) 4 Coverage from other non-Medicaid government insurance
programs (i.e., Civilian Health and Medical Program of the
Uniformed Services CHAMPUS , Medicare, etc.). 5 Coverage through a private
insurance plan, but not as part of an employer- provided benefit (i.e.,
individually purchased nongroup coverage). 6 Uninsured is the
residual category. An individual is classified as uninsured if
he or she did not report any of the previous types of insurance coverage over
the course of the year. Those with Indian Health Services as
their only source of insurance are considered uninsured.
LOAD-DATE: June 16, 1999 
