Tally of Uninsured Americans Likely to Stay High

From the WebMD Archives

March 3, 2000 (Washington) -- About 44 million Americans -- more than 18% of the nonelderly population -- have no health coverage. And even with the enactment of widely touted tax subsidies to boost health coverage, the ranks of the nation's uninsured are unlikely to dip much below where they are now, several experts predicted at a congressional briefing Friday.

Proposals to create individual tax credits or refunds for the purchase of health insurance have become politically popular. Various members of Congress, presidential candidates, and health industry groups have suggested "incremental" tax-based measures. And while these plans may be a more palatable alternative to earlier plans, such as President Clinton's failed attempt last decade to mandate that employers provide or individuals buy coverage, they may have little positive impact. Knocking down the numbers of the uninsured may be an intractable problem.

At the briefing, held by the Kaiser Family Foundation and the Alliance for Health Reform, Kaiser's Larry Levitt noted that these programs' "popularity has exploded -- they have their advocates throughout the political spectrum."

In this election year, purporting to address the needs of those without insurance has become a take-all-comers political bandwagon. Even "Harry and Louise" -- the fictional couple that the Health Insurance Association of America dreamed up to sink President Clinton's universal coverage proposal in the early 1990s -- are now about helping the uninsured.

But according to Jack Meyer, PhD, president of the nonprofit Economic and Social Research Institute, "Tax-related reforms are not likely to substantially improve the cost-effectiveness of care, promote quality of services, or encourage health promotion. Nor are they likely to move us close to the goal of universal health coverage."

Similarly, Jonathan Gruber, PhD, a Massachusetts Institute of Technology economics professor, doubts the outcomes of such proposals. "Even very generous tax policies could not cover more than a sizable minority of the uninsured population." He said that a generous -- $13 billion annual -- program would cover just 4 million of the uninsured, leaving 40 million without coverage. Gruber co-authored a piece on this topic in the current issue of the policy journal Health Affairs.


Why are results so tough under a tax scheme? According to Gruber, many already-insured individuals would likely take the new benefit, increasing the cost of the program. And Employee Benefits Research Institute (EBRI) official Paul Fronstin, PhD, tells WebMD that tax-based plans would have only a small impact, since individuals would face the hurdle of still having to shell out money for part of their own coverage.

Fronstin noted that although the federal CHIP insurance program is free for lower-income children, "They're having trouble giving it away." More than 10 million children lack health insurance, but about half of them are eligible for free federal coverage.

No matter what policymakers try, whittling down the numbers of those without coverage is a bear of a challenge. With 18% of the nonelderly now uninsured, "The best we're going to do is about 15%," said Fronstin.

But Marilyn Moon, PhD, a senior fellow at the nonprofit Urban Institute, is more optimistic that federal policy can beat down the numbers. "It's not going to go to zero, and it's not going to be easy to get it to 10%, but I do think we could do better than 15%," she tells WebMD.

A report issued earlier last month by the Institute for the Future and the Robert Wood Johnson Foundation gave a middle-of-the-road forecast that 48 million Americans would be uninsured by 2010, the same percentage of the nonelderly population as today. The report's alternative blue-sky prediction was for 30 million uninsured -- 11.5% of the nonelderly populace -- while its pessimistic alternative estimated that 65 million -- 25% -- would be without insurance.

While getting coverage for the uninsured is a complex nut to crack, coverage appears strong for the rest of the population. The country's robust economy is keeping many employers from dropping health insurance plans.

EBRI reported that the proportion of employed workers with health coverage has risen for the fifth straight year: Just under 65% of nonelderly Americans had coverage under an employer plan, the institute said.

"Employers are responding to the tight labor market," Fronstin noted, although he expressed "concern" that medical inflation is on the rise.


But Moon tells WebMD, "I'm not cheered that there's only been modest improvement in health insurance coverage. Times are awfully good."

Employers and health plans argue that enactment of the "patients' bill of rights" could throw more than a million Americans off of employer coverage; the Congressional Budget Office estimates that the bill passed by the House would increase insurance premiums by more than 4%.

But Fronstin tells WebMD that this doomsday scenario is unlikely, with businesses desperate for workers, they are unlikely to discontinue coverage even if it became more expensive. Unemployment, he notes, is currently just 4%.

The briefing Friday was held by the Kaiser Family Foundation and the Alliance for Health Reform, nonprofit policy groups.

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