Health Insurance for Low-Income Working Families - Summary

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Abstract

Only 37 percent of adults in low-income working families had employer-sponsored health insurance and 42 percent had no coverage. Health care costs are also rapidly rising out of reach for even middle-income Americans. In this summary, Perry and Blumberg propose comprehensive reform that ensures coverage for everyone at every income level, while still encouraging work. Their proposals include state purchasing pools, individual mandates and strategies for reducing health care costs.

Introduction

For many low-income families, work doesn’t pay enough to cover the cost of health care. Low-wage workers are less likely than higher-income workers to have access to employer-sponsored health insurance, and they often can’t afford to purchase private nongroup insurance. Meanwhile, health care costs are rapidly rising out of reach for even middle-income Americans.We propose comprehensive reform that ensures coverage for everyone at every income level, while still encouraging work.

The Need for Universal Health Coverage

Between 2000 and 2005, the number of uninsured Americans grew by 6 million; most of this growth was among low-income working families. Low-wage workers often aren’t offered health insurance from their employers, aren’t eligible for benefits because of short job tenure or part-time status, or can’t afford the premiums. Only 37 percent of adults in low-income working families had employer-sponsored health insurance in 2005.

Low-income families are more likely to have members in fair or poor health than higher-income families. And they’re less likely to have assets to draw from when unexpected health problems strike. Many children in low-income families can rely on public insurance, but coverage is limited for low-income adults.

Even for the insured, out-of-pocket health care costs can be a financial burden—premiums, deductibles, coinsurance, and co-payments can quickly add up. And the current patchwork of employer-based insurance, private nongroup insurance, and public programs isn’t enough to meet families’ needs.

(End of excerpt. The entire report is available in PDF format.)

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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