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Susan Brown (202) 261-5702 |
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Angela Saunders, Community Voices, (202) 872-4860, ext. 222 |
WASHINGTON, D.C., August 29, 2001—A new Urban Institute report on workers without health insurance suggests that the most efficient way to increase coverage is to target subsidies toward low-income workers. The report offers the most detailed picture yet of the uninsured working population—now numbering more than 16 million—and compares the relative merits of two key vehicles for expanding coverage: tax credits or public programs. It also contains some surprises: though Hispanics are less likely to be covered overall, they accept employer offers of health insurance at the same rate as whites and African Americans.
"Workers Without Health Insurance: Who Are They and How Can Policy Reach Them?" by Urban Institute researchers Bowen Garrett, Len Nichols and Emily Greenman, characterizes today’s uninsured and examines the policy implications. The report, based on analyses of 1999 Current Population Survey data and a survey of the literature on the working uninsured, was developed for the W.K. Kellogg Foundation as part of its Community Voices: HealthCare for the Underserved initiative series. Accompanying the release is the first national Workers’ Health Insurance Index.
Firms offer health insurance if their workers demand it, but the evidence makes clear that many low-income workers cannot afford to demand health insurance today," concludes Nichols, a health policy expert. "Increasing their purchasing power through targeted subsidies is the surest way to expand coverage. If such subsidies are structured properly, the share of firms that offer health insurance and the share of workers who enroll would both increase."
Who Are the Working Uninsured?
Among the workers more likely to lack health insurance: workers in small firms; retail workers; construction workers; service workers; low-wage workers; part-time workers; short-tenure workers; and workers who live in low-income households. Over half (59 percent) of uninsured workers’ employers do not sponsor health insurance; 21 percent are not eligible for their employer’s plan; and 20 percent decline the coverage they are offered at work.
Low-income workers are much less likely than higher-income workers to be offered, be eligible for, or enroll in employer-sponsored insurance. Hispanic workers have the lowest rate of coverage, primarily due to their employers not offering coverage. African-American and white workers are equally likely to have offers, but whites have more access to coverage through a spouse. If a firm offered health insurance, take-up rates did not vary by race or ethnicity.
"We need to eradicate and eliminate barriers to health insurance for all individuals, regardless of race," says Dr. Henrie Treadwell, Program Director at the W.K. Kellogg Foundation. "This report shows the importance of offering workers health insurance as a first step in increasing access."
Firm Size Matters More than Industry Type. Workers in larger firms are more likely to be offered, be eligible for, and to enroll in employer-sponsored health insurance, regardless of industry.
Sponsorship Rates Track with Take-Up Rates. Across industries, rates of employer sponsorship of insurance vary more than take-up rates, but the rates are correlated. The findings suggest that workers’ ability and willingness to pay for health insurance coverage are key to a firm’s decision to sponsor a health insurance program.
Policy Implications
Target Low-Income Workers. Policies designed to expand health insurance coverage tend to focus on workers in low-income households, low-wage workers, and small firms. Many low-wage workers, the authors point out, are secondary earners in higher-income households and are already insured. "Targeting subsidy dollars to low-income workers would extend eligibility to a large share of uninsured workers, and would be less likely than targeting low-wage workers to subsidize workers who already have coverage," says health economist Garrett. Targeting workers in small firms is the least likely to reach a high share of uninsured workers.
Tax Credits Should Be Refundable, Applicable to Employer Plans. The authors suggest that employer tax credits are easier to administer than individual tax credits, but are not as likely to expand health insurance coverage. At the same time, individual tax credits would need to be refundable to help low-income workers. If the individual tax credit approach is adopted, subsidies would be more effective if they were applicable to either employer-sponsored or non-group insurance. Overall, health insurance subsidy dollars will go farther if current or new institutions are used to take advantage of administrative, risk pooling, and purchasing economies of scale.
Public Programs Could Help Low-Income Workers. Public program expansions would work better than individual tax credits to reduce the rate of worker uninsurance for low-income workers, unless a tax credit subsidy is nearly equal to the price of an insurance policy. But public program expansions would require a more elaborate eligibility-determination system, either through the tax system or a state welfare agency.
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The Urban Institute is a nonprofit, nonpartisan policy research and education organization that examines the social, economic, and governance challenges facing the nation.
Community Voices: HealthCare for the Underserved is a multi-year initiative of the W.K. Kellogg Foundation targeted at ensuring the survival of safety-net providers and strengthening community support services. The 13 communities involved in Community Voices are: Alameda County/Oakland, California; Albuquerque, New Mexico; Ingham County/Lansing, Michigan; Baltimore, Maryland; California Native Americans (29 tribes); Denver, Colorado; Detroit, Michigan; El Paso, Texas; Miami, Florida; North Carolina; Northern Manhattan, New York; Washington, D.C.; and West Virginia.
To obtain your free copy of "Workers Without Health Insurance: Who Are They and How Can Policy Reach Them?" call 1-800-819-9997 and request item # 479, or download the report from the Community Voices web site at www.communityvoices.org.
Workers' Health Insurance Index
WORKERS WITHOUT HEALTH INSURANCE: WHO ARE THEY? *
Millions of Americans in 1999 without health insurance: 43
Percentage of Americans in 1999 without health insurance: 16
BY FAR BIGGEST GROUP OF UNINSURED WORKERS: CHILDLESS SINGLE WORKERS
Percentage of U.S. population with employment-based health insurance: 62
Percentage of uninsured Americans who work or live with workers: 80
Percentage of uninsured workers who work full-time: 71
Percentage of uninsured workers who work part-time: 29
Percentage of uninsured workers in firms with fewer than ten employees: 25
Percentage of uninsured workers in firms with more than 100 employees: 43
Percentage of uninsured workers who earn less than $7/hr: 43
Percentage of uninsured workers who earn less than $10/hr: 69
Cost of a typical family coverage policy in 2001: $6,800
Annual income of a 4-person family at 200% of the poverty line in 2001: $35,300
Percentage of family’s $35,300 income needed to pay for insurance: 19
Percentage of family’s $35,300 income needed for insurance with $2000 subsidy: 14
Percentage of uninsured workers with low incomes (below 200% of poverty line): 59
Percentage of uninsured workers whose employers don’t sponsor insurance: 59
Percentage of uninsured workers who aren’t eligible for their employers’ plan: 21
Percentage of workers in retail whose employers don’t offer insurance coverage: 61
Percentage of workers in construction whose employers don’t offer: 63
Percentage of workers in manufacturing (durables) whose employers don’t offer: 91
Percentage of workers in professional services whose employers don’t offer: 80
Percentage of workers in personal services whose employers don’t offer: 46
Size of firms least likely to offer health insurance: fewer than 10 employees
Percentage of full-time workers (more than 35 hours) offered coverage: 85
Percentage of part-time workers (20-34 hours) offered coverage: 43
Percentage of part-time workers (less than 20 hours) offered coverage: 20
Percentage of poor workers in single-earner families who decline offer of coverage: 25
Percentage of high income workers in single-earner families who decline offer: 5
Percentage of workers with offers: blacks 77, Hispanics 65, whites 79
Percentage of workers who decline offers: blacks 15, Hispanics 15, whites 15
Percentage of workers with health insurance coverage: blacks 81, Hispanics 67, whites 89
MOST EFFICIENT TARGET OF SUBSIDIES: LOW INCOME WORKERS
LARGEST TARGET GROUP: LOW WAGE WORKERS
EASIEST TO ADMINISTER: EMPLOYER SUBSIDIES
LEAST EFFICIENT SUBSIDY TARGET: SMALL EMPLOYERS
KEY POLICY TRADEOFFS: EFFICIENCY, EFFECTIVENESS, EQUITY, CHOICE, ADMINISTRATIVE EASE
Adapted from Workers Without Health Insurance: Who Are They and How Can Policy Reach Them? Bowen Garrett, Len M. Nichols, and Emily K. Greenman, The Urban Institute, 2001.
To obtain your free copy of "Workers Without Health Insurance: Who Are They and How Can Policy Reach Them?" call 1-800-819-9997 and request item # 479, or download the report from the Community Voices web site at www.communityvoices.org.
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