Coverage

Individuals who have health care coverage tend to use more medical services (NCHS, 2006), receive more preventive care (Faulkner and Schauffler, 1997), are less likely to avoid or delay needed care because of cost, and may have better health outcomes (Ayanian et al., 1993; Ayanian et al., 2000) than patients without coverage. Increasing the proportion of people with adequate protection from financial risk due to health care expenses is a cornerstone for most proposed health policies and therefore a key metric for evaluating them.

Current Levels of Coverage	Coverage Among Working Age Adults
Characteristics of Americans Without Coverage	Coverage Among Adults 65 and Older
Children	References

Current Levels of Coverage Save to My Compare

The majority of Americans under age 65 have access to health care coverage through an employer; however, public sources still pay for nearly half of Americans' medical bills. Most adults age 65 and over are covered through the Medicare program.

Figure 1 shows the proportion of the population with health care coverage and the type of health insurance they have, if any:

Approximately 60 percent of Americans of all ages receive coverage through employers; about 9 percent purchase individual/family policies directly.
In 2007, government plans (of any type) provided insurance for nearly 28 percent of Americans.
Medicare is the most important payer for Americans age 65 and over. In 2006, 34 percent of medical expenses for that age group were paid by private insurance or out of pocket (NCHS, 2007).
A small percentage of the population has health care coverage through the Veterans Administration.
Nearly 11 percent of Americans have both private and public sources of insurance coverage.
About 15 percent of Americans have no health care coverage.

Figure 1. Percentage of the Population with Health Care Coverage, All Ages, 2007

SOURCE: Data are from U.S. Census Bureau and Bureau of Labor Statistics, 2008a NOTES: Respondents are considered to have had a particular type of insurance if they reported having had it for all or part of the calendar year. Estimates of coverage are not mutually exclusive; people can be covered by more than one type of insurance in a given year. People categorized as not covered are those who reported having had no insurance for the entire calendar year. Percentages are rounded. Click to Zoom

Figure 2 shows the types of health insurance coverage that the non–elderly population had in 2007:

In 2007, most working age (18 to 64 years) adults received health insurance coverage through an employer.
The federal government provides subsidies (in the form of tax breaks) to businesses that choose to offer health insurance coverage to their employees.
Working age adults were more likely than children or the elderly to be uninsured. Federal programs such as Medicare cover the elderly; Medicaid and the State Children's Health Insurance Program (SCHIP) provide coverage to children.
Medicaid covers some non–elderly low income individuals who might otherwise be uninsured, including children, their parents, pregnant women, and (one–fifth of) individuals with disabilities.

Figure 2. Health Insurance Coverage of the Non–Elderly (Under 65) Population, 2007

SOURCE: Data are from U.S. Census Bureau and Bureau of Labor Statistics, 2008a NOTES: The uninsured category represents people who were uninsured during all of the relevant calendar year. The Medicaid/other public category includes Medicaid, SCHIP, other state programs, Medicare, and military related coverage. Percentages are rounded. Click to Zoom

Figure 3 charts the number of uninsured and the uninsured rate for the 20 year period from 1987 through 2007:

The uninsured rate rose between 1987 and 2006, save for a two year period of decline (1999 and 2000) and two years of stability (2003 and 2004). In 2007, 15.3 percent of the population was uninsured, down from 15.8 percent in 2006. (DeNavas–Walt, Proctor, and Smith, 2007).
The number of non–elderly uninsured increased from 44.8 million in 2005 to 47.0 million in 2006.
Employer sponsored coverage increased during the mid— and late—1990s (even as the number of uninsured grew), but then began to decline in 2001 (Kaiser and HRET, 2006).

Figure 3. Number Uninsured and the Uninsured Rate, 1987 Through 2007

NOTE: The uninsured category represents people who were uninsured during all of the relevant calendar year. SOURCE: Data are from U.S. Census Bureau and Bureau of Labor Statistics, 1988 to 2008a. NOTES: Respondents were not asked detailed health insurance questions before the 1988 Current Population Survey. For information on recessions, see Appendix A of the 2008 Current Population Survey. The uninsured category represents people who were uninsured during all of the relevant calendar year. ¹ The data for 1996 through 2003 were revised using an approximation method for consistency with the revision to the 2004 and 2005 estimates. ² Implementation of Census 2000 based population controls occurred for the 2000 Annual Social and Economic Supplement, which collected data for 1999. These estimates also reflect the results of follow-up verification questions that were asked of people who responded "no" to all questions about specific types of health insurance coverage in order to verify whether they were actually uninsured. This change increased the number and percentage of people covered by health insurance, bringing the Current Population Survey more in line with estimates from other national surveys. Click to Zoom

Coverage Among Working Age Adults Save to My Compare

Most Americans receive health insurance coverage as an employment benefit. However, work based insurance coverage is neither required of nor guaranteed by employers. In fact, most uninsured adults work full time.

Figure 4 shows the percentage of working age adults with insurance coverage relative to the amount worked during 2006:

Regardless of time worked, most working age adults had health insurance coverage during 2006. The proportion of adults with insurance decreases as the amount of time worked decreases.
Slightly more than one–quarter of adults who did not work were uninsured.

Figure 4. Proportion of Working Age Adults with Insurance Coverage, 2006

SOURCE: Data are from U.S. Census Bureau and Bureau of Labor Statistics, 2007. NOTE: The insured category represents people who reported having had some type of insurance during part or all of the relevant calendar year. Click to Zoom

Employer sponsored (group) insurance is subsidized by federal tax breaks given to companies that offer health insurance to their employees. Because of these subsidies and because of risk pooling (that is, the risk that an individual employee will require substantial health care services is spread across all employees), employer based coverage is substantially less expensive than private coverage purchased by an individual.

Blue collar workers, part time employees, temporary workers, recent hires, and employees in smaller firms are less likely to receive employer sponsored insurance than other workers. In this decade, job based insurance coverage has declined in various ways, such as an increasing reluctance on the part of employers to extend benefits to other family members or to offer retiree health benefits, and increases in cost sharing (Kaiser and HRET, 2008).

One important trend in employer sponsored health insurance is the advent of the low cost economy health insurance product, the high deductible health plan (HDHP), sometimes referred to as "mini–medical" or "limited benefit" plans. High deductible plans have (1) lower premiums, (2) reduced benefits, and/or (3) higher copayments and deductibles.

Concerns have been raised that HDHPs may expose enrollees to financial risk and result in poorer long term health outcomes. These economy insurance plans may not serve the major purpose of insurance: to protect beneficiaries against catastrophic loss. As it stands now, the plans typically shift cost risk from the insurer (employer) back to the consumer (worker) and strengthen incentives to avoid use of health care services. Economy plans may also include significant limitations in outpatient and inpatient coverage as well as modest annual payment caps (e.g., $10,000).

Because economy plans have significantly lower premiums, they may be appealing to healthier workers. As a result, traditional group insurance plans may be left with employees in poorer health, potentially increasing insurance premiums for all enrollees.

The overall proportion of firms that offer health benefits declined between 2000 (69 percent) and 2007 (60 percent), then rose again in 2008 to 63 percent. Firms that do not offer health benefits cite the high cost of premiums as the reason (Kaiser and HRET, 2008). Firm size (especially for smaller firms) is another important consideration.

Figure 5 charts the percentage of firms offering health benefits between 1999 and 2008. During this period, the rate at which firms have offered insurance declined steadily, then rose slightly in 2008:

In 2008, 99 percent of large firms (200 or more workers) offered health benefits, a level that has remained relatively constant for the past decade. However, the percentage of small firms offering health coverage has fallen from 68 percent in 1999 to 62 percent in 2008.
Firms offering health benefits tend to employ higher wage workers (68 percent of higher wage firms versus 40 percent of lower wage firms offer health insurance), and fewer part time workers (67 percent of predominantly full time worker companies offer insurance versus 45 percent of firms that employ a mostly part time workforce). Unionized firms are more likely than nonunion companies to offer health benefits (99 percent versus 60 percent).
Among firms that offer health benefits, about one–quarter offer them to part time workers as well as full time employees. Part time workers in the largest firms (1,000 or more workers) are much more likely to be offered health coverage (45 percent).

Figure 5. Percentage of Firms Offering Health Benefits by Firm Size, 1999—2008

SOURCE: Data are from Kaiser and HRET, 2008. Click to Zoom

Figure 6 shows eligibility, participation, and coverage rates among employees at American companies over the ten year period 1999—2008. Among firms offering health coverage, not all employees are eligible and not all eligible employees decide to participate in the insurance plan. Some workers decline coverage. Others may choose coverage through another source, such as a spouse's employer.

The percentage of workers at small firms who are eligible for insurance was slightly higher in 2007 than that of large firms (81 percent versus 79 percent), but the percentage of eligible small firm workers who elect to take employer sponsored coverage is smaller (80 percent versus 83 percent) than for large firms.
Most employees accept employer sponsored insurance when offered; however, 71 percent of eligible workers at low wage firms accept coverage compared with 81 percent of workers at higher wage firms.
Industries with the highest coverage rates include state and local governments, manufacturing, transportation/communication, and utilities firms; retail firms, service industry businesses, and health care firms have the lowest average coverage rates.
Most employees (75 percent) face an average waiting period of about 2.1 months before elected coverage begins.

Figure 6. Eligibility, Participation, and Coverage Rates Among American Companies Offering Health Benefits, 1999—2008

SOURCE: Data are from Kaiser and HRET, 2008, p.61. Click to Zoom

Employees who have employer sponsored group insurance have seen steady increases in their premiums, at faster rates than increases in inflation or workers' earnings. The average employee premium contribution has more than doubled since 1999, while rates of increase in inflation and earnings fluctuated between 2 percent and 6 percent per year.

Employees enrolled in group insurance share the cost of their health care, primarily through deductibles and copayments for office visits, procedures, and the like. Often the amount of financial risk employees face for out–of–pocket health care expenses is limited by an annual maximum.

Employee cost sharing varies substantially from plan to plan. Plans may use different deductibles for different types of services, such as inpatient care, prescription drugs, and substance abuse and mental health services. Some plans impose a family deductible (or out–of–pocket maximum amount) toward which expenses incurred by any participating family member apply, while others maintain separate deductible amounts for each family member. In determining which expenses to include toward out–of–pocket maximums, plans may include and exclude some services—e.g., prescription drugs—from the out–of–pocket maximums.

With or without a deductible, close to 80 percent of employees face a per visit payment at the point of service for physician office visits, usually a fixed dollar amount ranging from $15 to $25 on average.

The table provides an overview of employee cost sharing in plans of different types during 2008. Across all types of plans, over 70 percent of enrollees have additional cost sharing (separate deductible or copayment, separate coinsurance, or both) for hospital stays and outpatient surgeries.

Average Annual Plan Deductible (in dollars) by Plan Type, 2008
	HMO	PPO	POS	HDHP
Single (overall)	503	560	752	1,812
Small firms	NA	917	960	1,959
Large firms	307	413	461	1,599
Aggregate family deductible	1,053	1,344	1,860	3,559
Small firms	NA	2,367	2,614	3,897
Large firms	626	948	948	3,089
Family per person deductible	NA	514	778	2,334
Small firms	NA	699	NA	NA
Large firms	NA	429	NA	NA

SOURCE: Data are from Kaiser, 2008, charts 654 and 661. NOTES: Small firms have up to 200 workers; large firms 200 or more workers. NA means "not applicable," indicating insufficient data were available. HMO: health maintenance organization, PPO: preferred provider organization, POS: point of service plan, HDHP: high deductible health plan.

Characteristics of Americans Without Coverage Save to My Compare

In 2007, about 45.7 million individuals in the United States were uninsured. They come from every income level, age group, employment status, gender, race, ethnicity, and region of the country. Some groups are more likely than others to be uninsured, but because of their lower numbers in the general population, they do not necessarily make up the largest shares of the uninsured population. For example, Hispanics are more likely to be uninsured than non–Hispanic whites, but there are more non–Hispanic whites that are uninsured.

In general, (younger) adults, males, immigrants, the poor, American Indians/Alaska natives, Hispanics, and individuals living in the South and West are most likely to be uninsured. Nevertheless, because of underlying differences in the larger population, most of the uninsured are workers, are white, are citizens, and are over 30.

During the course of a calendar year (the time frame used to describe insurance status in many surveys), individuals may gain or lose coverage. Data from the 2006 Medical Expenditure Panel Survey (a set of large scale surveys of families and individuals, their medical providers, and employers across the United States) present a dynamic picture of insurance status in the United States. In that year, 68 million non–elderly individuals were uninsured at some point during the year; 50.1 million were uninsured throughout the first half of the year; 37.1 million were uninsured all year (Chu and Rhoades, 2008). The substantially larger proportion of Americans who lacked insurance for some part of that year reflects a level of potential financial risk as the result of a medical emergency that is not reflected in "all year" uninsured statistics. Were a catastrophe to strike at the wrong time, such as during a transition from job to job or some other life event, those individuals and families would be vulnerable.

Family work status, family income, and age. Figure 7 shows the family work status, family income, and age of the uninsured. Uninsured individuals are likely to be employed, young adults, poor or near poor, and childless. Adult men are more likely to be uninsured than adult women: Medicaid provides coverage to some pregnant women and single mothers.

Figure 7. Characteristics of the Uninsured, 2007

SOURCE: KCMU, 2008a. This information was reprinted with permission from The Henry J. Kaiser Family Foundation. The Kaiser Family Foundation is a nonprofit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible information, research, and analysis on health issues. NOTE: The federal poverty level(FPL) was $21,203 for a family of four in 2007 per U.S. Census Bureau, 2007. Click to Zoom

Race, ethnicity and place of birth. Figure 8 shows type of insurance coverage by race and ethnicity:

About one–third of Hispanics and American Indians are uninsured, compared with 12 percent of non–Hispanic whites and 18 percent of Asians.
Of uninsured persons, 78 percent are native or naturalized U.S. citizens.
Although recent immigrants are less likely to be insured, evidence suggests that they are not the primary cause for growth in the uninsured population (Holahan and Cook, 2005).

Figure 8. Insurance Status, by Race/Ethnicity, 2007

SOURCE: KCMU, 2008a. This information was reprinted with permission from the Henry J. Kaiser Family Foundation. The Kaiser Family Foundation is a nonprofit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible information, research, and analysis on health issues. NOTE: The uninsured category represents people who were uninsured during all of the relevant calendar year. Click to Zoom

Household income. Figure 9 presents the uninsured rate by household income. The high cost of health insurance means that lower income groups are more likely to be uninsured. Households with incomes of less than $25,000 are nearly three times as likely to be uninsured the entire year as are households with incomes of $75,000 or more.

Figure 9. Uninsured Rate by Household Income, 2007

SOURCE: Data are from U.S. Census Bureau and Bureau of Labor Statistics, 2007. NOTES: The uninsured category represents people who were uninsured during all of the relevant calendar year. Percentages are rounded. Click to Zoom

Figure 10 shows the relationship between income, as reflected in multiples of the federal poverty level, and type of coverage. Public insurance programs (such as Medicaid) help make up some of the difference in coverage among income groups, but not enough to bring the poor up to the same levels of coverage as higher income groups.

Figure 10. Health Insurance Coverage by Percentage of FPL, 2007

SOURCE: Data are from U.S. Census Bureau and Bureau of Labor Statistics, 2007, p.8. NOTE: FPL was $21,203 for a family of four in 2007 per U.S. Census Bureau, 2007. Click to Zoom

Age. Figure 11 shows the uninsured rate in 2007 by age:

Across all age groups, young adults are the most likely to report having been uninsured.
The majority of the uninsured are under age 35.
Because of public insurance coverage programs, especially Medicare, very few adults 65 and older are uninsured.

Figure 11. Uninsured Rate by Age, 2007

SOURCE: Data are from U.S. Census Bureau and Bureau of Labor Statistics, 2008b. NOTES: The uninsured category represents people who were uninsured during all of the relevant calendar year. Percentages are rounded. Click to Zoom

Coverage Among Adults 65 and Older Save to My Compare

Nearly all adults age 65 and older have health insurance, usually from multiple sources. The vast majority of those 65 and older have some form of public coverage: Medicare, Medicaid, military health care, or some combination of the three. Of these, Medicare is by far the most important, covering 95 percent of seniors. In 2007, about 43 million Americans were enrolled in Medicare, and Medicare expenditures totaled $431.5 billion (Hoffman, Klees, and Curtis, 2008).

Medicare is composed of four "parts": A (hospital insurance), B (medical insurance), C (Medicare Advantage plans), and D (prescription drug plans). The Medicare program includes premiums, deductibles, and copayments.

In addition to public sources of coverage, a substantial majority of seniors (69 percent) have some form of private coverage.

Children Save to My Compare

Children may be insured through private insurance coverage, either by virtue of a parent's employment or, for a small percentage, through direct purchase. Public programs—Medicaid and the State Children's Health Insurance Program (SCHIP)—provided insurance to about 22 million children in the United States in 2006 (KCMU, 2007). Another 9 million children were uninsured, about three–quarters of whom were eligible for Medicaid/SCHIP but not enrolled.

As of the early 1990s, states have been required by federal law to extend Medicaid coverage to children in poor and near poor families (&le 133 percent of FPL for children six and under; &le 100 percent FPL for children six to 18). Many states have expanded coverage to include children in families with higher incomes, with the federal government matching state spending (see Figure 12). SCHIP was established in the late 1990s to provide block grant funding to states to cover children not otherwise eligible for Medicaid, with a limited federal match.

Benefits mandated under Medicaid include a comprehensive set of screening, well child, and acute care services. Benefits under SCHIP can be more limited.

Figure 12. Sources of Insurance Coverage for Children by Income Level, 2007

SOURCE: Data are from KCMU, 2008b, and KCMU and the Urban Institute, 2009. NOTES: The uninsured category represents people who were uninsured during all of the relevant calendar year. Low Income is defined as less than 200 percent of FPL. Click to Zoom

References Save to My Compare

Ayanian JZ, Kohler BA, Abe T, Epstein AM, "The Relation Between Health Insurance Coverage and Clinical Outcomes Among Women with Breast Cancer," New England Journal of Medicine, Vol. 329, No. 5, July 29, 1993, pp. 326—331. As of July 20, 2009: http://content.nejm.org/cgi/content/abstract/329/5/326

Ayanian, JZ, Weissman JS, Schneider EC, Ginsburg JA, Zaslavsky AM, "Unmet Health Needs of Uninsured Adults in the United States," Journal of the American Medical Association, Vol. 284, No. 16, October 25, 2000, pp. 2061—2069. As of July 20, 2009: http://jama.ama-assn.org/cgi/content/abstract/284/16/2061

Chu MC, Rhoades JA, The Uninsured in America, 1996—2007: Estimates for the U.S. Civilian Noninstitutionalized Population Under Age 65, Rockville, Md.: Agency for Healthcare Research and Quality, Statistical Brief 214, July 2008. As of July 20, 2009: http://www.meps.ahrq.gov/mepsweb/data_files/publications/st214/stat214.pdf

DeNavas–Walt C, Proctor BD, Smith J, ,Income, Poverty, and Health Insurance Coverage in the United States: 2006, Washington, D.C.: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, Current Population Reports, P60–233, August 2007, p. 20. July 20, 2009: http://www.census.gov/hhes/www/hlthins/hlthin06.html

Faulkner LA, Schauffler HH, "The Effect of Health Insurance Coverage on the Appropriate Use of Recommended Clinical Preventive Services," American Journal of Preventive Medicine, Vol. 13, No. 6, November—December 1997, pp. 453—458.

Hoffman ED Jr., Klees BS, Curtis CA, Brief Summaries of Medicare and Medicaid: Title XVIII and Title XIX of the Social Security Act as of November 1, 2008, Washington, D.C.: U.S. Department of Health and Human Services, Office of the Actuary, Centers for Medicare & Medicaid Services, 2008. As of July 20, 2009: http://www.cms.hhs.gov/MedicareProgramRatesStats/02_SummaryMedicareMedicaid.asp

Holahan J, Cook A, "Are Immigrants Responsible for Most of the Growth of the Uninsured?" Menlo Park, Calif.: The Henry J. Kaiser Family Foundation and Kaiser Commission on Medicaid and the Uninsured, Issue Paper 7411, October 2005.

The Henry J. Kaiser Family Foundation (Kaiser), Fast Facts: Kaiser Slides: Figures, Tables, and More , Menlo Park, Calif., 2008, charts 654 and 661. As of July 20, 2009: http://facts.kff.org/chart.aspx?ch=654 and http://facts.kff.org/chart.aspx?ch=661

The Henry J. Kaiser Family Foundation (Kaiser) and Health Research & Educational Trust (HRET), Employer Health Benefits 2008 Annual Survey, Menlo Park, Calif.: The Henry J, Kaiser Family Foundation, and Chicago, Ill.: Health Research & Educational Trust, 2008. As of July 21, 2009: http://ehbs.kff.org/?page=abstract&id=1

Kaiser Commission on Medicaid and the Uninsured (KCMU), Health Coverage for Low–Income Children, Menlo Park, Calif.: The Henry J. Kaiser Family Foundation, No. 2144—05, January 2007. As of May 15, 2008: http://www.kff.org/uninsured/upload/2144-05.pdf

Kaiser Commission on Medicaid and the Uninsured (KCMU), The Uninsured: A Primer, Key Facts About Americans Without Health Insurance, Menlo Park, Calif.: The Henry J. Kaiser Family Foundation, October 2008a. As of July 20, 2009: http://www.kff.org/uninsured/upload/7451-04.pdf

Kaiser Commission on Medicaid and the Uninsured (KCMU), Health Coverage of Children: The Role of Medicaid and SCHIP, Menlo Park, Calif.: The Henry J. Kaiser Family Foundation, November 2008b. As of July 20, 2009: http://www.kff.org/uninsured/upload/7698_02.pdf

Kaiser Commission on Medicaid and the Uninsured (KCMU) and Urban Institute, Health Insurance Coverage of America's Children: The Role of Medicaid and SCHIP, Menlo Park, Calif.: The Henry J. Kaiser Family Foundation, January 2009. As of July 20, 2009: http://www.kff.org/uninsured/upload/7609-02.pdf

National Center for Health Statistics (NCHS), Health, United States, 2006, with Chartbook on Trends in the Health of Americans, Hyattsville, Md.: Centers for Disease Control and Prevention, DHHS Publication No. 2006–1232, November 2006. As of July 20, 2009: http://www.cdc.gov/nchs/data/hus/hus06.pdf

National Center for Health Statistics (NCHS), Health, United States, 2007, with Chartbook on Trends in the Health of Americans, Hyattsville, Md.: Centers for Disease Control and Prevention, DHHS Publication No. 2007–1232, November 2007. As of July 20, 2009: http://www.cdc.gov/nchs/data/hus/hus07.pdf

U.S. Census Bureau, Poverty, "Poverty Thresholds for 2007 by Size of Family and Number of Related Children Under 18 Years," Washington, D.C.: U.S. Department of Commerce, U.S. Census Bureau, Housing and Household Economic Statistics Division, 2007. As of July 22, 2009: http://www.census.gov/hhes/www/poverty/threshld/thresh07.html

U.S. Census Bureau and Bureau of Labor Statistics, Current Population Survey: Annual Social and Economic (ASEC) Supplement, Washington, D.C.: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, 1988 to 2008.

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