Who are the Insured?

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Who are the insured (who pays)?

Eight out of ten Americans are insured. While this constitutes a majority of the general public, the breakdown of the population with health insurance shows a mixed demographic, representative of some specific segments of the population. Of those with low incomes, very low-wage workers, individuals with disabilities, and pregnant women and children have health insurance. Almost all Americans over age 65 have health insurance. Workers whose employers offer coverage (and whose premium share they can afford) have health insurance. College students whose schools offer subsidized health insurance and public employees who get insurance from local, state or federal government are covered. Wealthy individuals who can afford expensive, robust health insurance plans from the private market or middle and low income groups who can afford bare-bones private insurance plans have health insurance.

The insured can just as easily become uninsured

Any one of these individuals could become uninsured in a moment’s notice if one of their life circumstances shifts. You and your family might be at risk of losing your health insurance, if…

- you are a low wage worker who receives a raise that puts you and your family slightly above the Medicaid eligibility line but in no position to afford the premium share of your company’s health insurance plan

- you develop a chronic health condition from the type of job you perform that now makes you a too much of a “high risk” for any health insurance, even your employer’s

- you quit your job because it does not fulfill you and are on the lookout for a job that suits you and your family’s needs better

- you were diagnosed with a heath condition during your transition period that your new employer considers a “pre-existing condition” that it will not cover

- you retire early to care for an ageing parent and lose your employer-sponsored coverage while still being ineligible for Medicare

- your new employer does not offer health insurance

- you are an entrepreneur and decide to start a small enterprise of your own, but cannot afford any health insurance until your business has gained enough traction to afford such benefits

- you get divorced from your spouse under whom you had health insurance

- you graduate from college

- you decide to take a year off from college to volunteer with a global relief agency

- you are an average citizen, unaware of the life circumstances that will befall you, and you develop a health condition or suffer an accident for which your particular health insurance does not cover

The possibilities are simply endless – anyone at any time could fall out of the health insurance system and lose access to health coverage. Many of those who lose their coverage are not irresponsible, lazy individuals, but rather people who are trying to live the American dream – moving into jobs that fulfill them, starting their own businesses, making life choices, and working hard even in difficult circumstances. In a country that values choice so deeply, we are hindered by a health system that limits our ability to make some of the most basic choices for our success.

Most without health insurance are from working families, trying to succeed

The uninsured, who comprised 18 percent of the non-elderly US population (16 percent of the total US population) in 2006,[1] are predominantly adults (80 percent) from working families (more than 8 in 10).[2] Seventy percent of the uninsured are from families with one or more full-time workers while only 18 percent are from families unconncected to the workforce.[3] A little more than a third of the uninsured are below the poverty line and a little more than a third are in the middle and upper income bracket (earning at or above 200 percent of FPL), while a little less than a third are near poverty.[4] The vast majority of the uninsured (78 percent) are native or naturalized U.S. citizens and Holohan and Cook (2005) report that “studies show…new immigrants are not primarily responsible for the growth in the overall uninsured population, mainly because they comprise a small share of the total U.S. population.”[5]

Minorities also have a higher likelihood of being uninsured than whites, with only 13 percent of Whites uninsured while 36 percent of Hispanics, 33 percent of Native Americans, 22 percent of African Americans, and 17 percent of Asians are uninsured.[6] According to a Primer on the Uninsured by the Kaiser Family Foundation, “this disparity reflects the fact that minorities are much less likely to have health insurance offered through their jobs, to be eligible for the benefit, or be able to afford their share of the premiums.”[7] As the next section discusses, these workers and other uninsured individuals are unable to access health coverage, but they help pay for health insurance subsidies that other workers benefit from through the taxes they pay.

Everyone pays but not everyone benefits: the uninsured also pay for health coverage, just not their own

Everyone who pays taxes pays for health coverage – if not their’s than someone else’s. Tax dollars go into subsidizing employer-sponsored health insurance, including coverage purchased by a self-employed worker.[8] Each year, approximately $100 billion go into the federal tax subsidy for the purchase of employer-sponsored health coverage.[9] Workers whose employers do not offer health insurance (usually smaller firms) or who are offered coverage but cannot afford to pay the premium share still pay the same taxes that subsidize the health coverage of those workers who are offered coverage and who can afford their premium share. People who are unemployed or transitioning between jobs also pay, through their taxes, for the ability of workers with employer-sponsored coverage to have access to health care, even while they themselves may not have access to this care. In addition to the tax subsidy on employer-sponsored coverage and coverage purchased by self-employed workers, the government also subsidizes individuals with health care expenses exceeding 7.5 percent of their adjusted gross income by allowing these individuals to deduct their health costs (including premiums) on their tax returns.[10]

Tax dollars also go towards providing health coverage for public employees. All tax payers pay for the health insurance that state, local and federal employees – your local county clerk as well as your Congressman. These payments are usually counted in the category of employer-sponsored private coverage (government as ‘employer’), but they also constitute a form of public, state-sponsored health coverage. Tax dollars also go towards purchasing health insurance for prisoners. Military personnel get health coverage through tax-payer dollars as do individuals who qualify for Medicare, Medicaid, SCHIP and other public programs. College students at public universities who are offered subsidized health insurance also receive this benefit through state dollars. Thus, individuals who fall into specific categories (or meet the eligibility criteria) are awarded the health coverage that everyone contributes to paying for through taxes. Large government grants also go towards financing health care research and state and federal dollars are regularly spent financing both governmental and independent research on technologies and advancements in health care. National funding that supports new breast cancer research is paid for by all tax payers – from those in the lowest income bracket to those in the highest income bracket – and yet when these findings become new treatments, only those with health insurance and who can afford it will benefit from the new advancements. In many ways, then, the current US health care system is supported by government dollars – the only difference is that unlike other nationally funded health insurance systems, in this system everyone pays but not everyone benefits.