An Unhealthy Trend in Health Insurance and Also in the Individual Market

[courtesy of California Progress Report]

By Hanh Kim Quach
Health Care Policy Coordinator
Health Access California

75 million adults -- that's 42% of working age adults in the US -- had no insurance or really bad insurance (the kind that makes you pay up the nose anytime you sneeze) in 2007.

That's up from 35% of working age adults that were uninsured or underinsured in 2003, the first time Health Affairs did this analysis. A new analysis -- out today!-- updates the study from five years ago.

Among the findings:

• 25 million people who were technically "insured'' actually have really crappy insurance (that amounts to one-fifth of the entire "insured'' population)
• The number of adults earning between $40k and $60k who were underinsured nearly tripled from 5% to 13%.
• The number of adults earning more than $100k and were underinsured (meaning that they spent more than 10% of their income on out-of-pocket medical expenses) increased from 1% to 7%.

The series of studies is important because until recently, most analyses only tracked the number of people without coverage and how lack of coverage impacts a person's ability to stay healthy. Just as important now, though, is this tracking the number of people with inadequate insurance. High deductibles, high co-pays, high co-insurance and high out-of-pocket costs cause patients to behave in similar ways to a person who is uninsured -- they forgo care because of the expense.

Insurance companies like to argue that these low-quality, low-premium plans are at least a backstop to keep people from going into bankruptcy. But as our previous studies have shown, people don't have much in the way of assets -- and a $5,000 deductible would wipe out the savings of 40% of Americans. From our perspective, being underinsured means you're paying premiums to be functionally uninsured.

The Individual Market

As we continue to struggle with how to get more people coverage, I'd suggest a look at this Kaiser Family Foundation report from February. The study looks at people who can't get public coverage and aren't offered insurance through their jobs.

Among the findings: