A Report from Families USA
One Out Of Three: Kids Without Health Insurance 1995-1996
NOTE: This report contains tables and pie-charts that are not posted in this version. To receive a print copy of the report, contact Families USA at 202-628-3030.
When children fail to receive necessary health care, their lives can be affected for years to come. To be sure of receiving the preventive and acute care required for healthy development, children should be covered by health insurance. Yet a large and growing number of children is without such insurance. Over the two year period 1995 1996, an estimated 23 million children went without health insurance for one or more months. This means that one out of three childrenwere uninsured for a month or more during 1995 and 1996.
Uninsured children are more likely to be without insurance for a substantial period of time rather than a brief interlude. Nearly half are uninsured for at least 12 months and many of them are uninsured for two full years. Most children without insurance are from working families. The overwhelming majority of children uninsured for a month or more are from families where the head of household works and a large portion of them work full time. The problem of uninsurance is not confined to children in low income families. More than half of all uninsured children are from families with moderate incomes.
These are among the findings of a new analysis of data from the U.S. Census Bureau. This report provides an updated estimate of the number of children uninsured for one month or longer during 1995 and 1996, using data from the Census Bureau's Current Population Survey in combination with data from another Census instrument, the Survey of Income and Program Participation (SIPP). The report also provides the first state by state estimates of the number and proportion of children without health insurance for one month or longer during 1995 and 1996. Finally, the report provides the first analysis of the length of time children go without insurance coverage and the characteristics of these uninsured children, based on the latest available data from the SIPP.
In 1995 1996, one out of three children under the age of 18 went without health insurance for one or more months over the two year period. Approximately 23.1 million children, out of a total of 70.8 million children in the United States, went without health insurance for all or part of 1995 1996.
The ten states with the highest percentages of children uninsured for all or part of 1995 1996 were: Texas (46 percent), New Mexico (43 percent), Louisiana (43 percent), Arkansas (42 percent), Mississippi (41 percent, District of Columbia (39 percent), Alabama (38 percent), Arizona (38 percent), Nevada (37 percent) and California (37 percent).
The ten states with the highest number of children without health insurance for all or part of 1995 1996 were: California (3.4 million); Texas (2.6 million); New York (1.5 million); Florida (1.3 million); Illinois (972,000); Pennsylvania (867,000); Ohio (773,000); Michigan (670,000); Georgia (664,000); and New Jersey (553,000).
The latest SIPP data currently available provide significant information about children without health insurance during a two year period. These data show the following:
Previously released data demonstrate that the percentage of children without health insurance coverage has increased significantly in recent years as children have lost private health insurance coverage. In particular, the portion of America's children with employment based health insurance coverage has dropped significantly.
Several factors account for the decline in employment based health insurance coverage for children. As employers have required employees to pay larger shares of premiums, many workers have been unable to afford insurance. In addition, structural economic changes have increased the number of jobs that do not provide health insurance. A higher proportion of Americans now work as contractors or as temporary or part time workers, positions that do not typically bring with them employer based health insurance. A recent report prepared for the American Hospital Association shows that the decline in employer based coverage disproportionately has affected workers' dependents.
As private coverage of children has decreased, an increase in the number of young children covered by Medicaid has partly offset the loss of employer based coverage. In a series of steps starting in the late 1980s and continuing into the 1990s, Medicaid eligibility was expanded nationally to cover additional lower income children besides those who already qualified because they received welfare.
However, increases in children's coverage through Medicaid have not resulted in an overall increase in the percentage of children covered by health insurance. This is due, in part, to the fact that almost three million children who are eligible for Medicaid do not receive coverage but remain uninsured as a result of poor outreach and other barriers. However, the primary reason for increasing levels of uninsurance among children is that many children have been losing private coverage but remain ineligible for Medicaid.
For this report, we developed estimates of: 1) the characteristics of children who were uninsured for one month or longer over a two year period; 2) the characteristics of children who remained uninsured for the full two year period; and 3) the number of children in each state who lacked insurance for one or more months over a two year period.
The analysis of the characteristics of uninsured children was based on data from the Census Bureau's Survey of Income and Program Participation (SIPP). The longitudinal SIPP contains the most extensive information to date about children's health insurance coverage and their demographic and economic characteristics on a month by month basis. For this analysis, we examined SIPP data about children under age 18 without health insurance for one month or longer over a two year period from February 1, 1991 to January 31, 1993. This is the most recent two year period available for analysis. The 1991 1993 SIPP contains data on the characteristics of approximately 44,000 individualsC9,500 of whom are children. For children without health insurance for one or more months during this period, we examined their duration without insurance, their race ethnic background, and their family income as well as the educational, employment, and health insurance status of the head of household.
The state by state estimates of uninsured children are based on the 1991 1993 SIPP as well as the March 1996 Current Population Survey (CPS). With its larger sample of approximately 130,000 individuals of whom approximately 37,000 are children the CPS was used to generate state level estimates of the number of children uninsured for one month or longer at some point over the two year period, 1995 to 1996. The technical appendix provides additional information on the methodology.
FINDINGS: THE NUMBER OF UNINSURED CHILDREN
In 1995 to 1996, an estimated one out of three children under 18 years of age went without health insurance for one month or longer. Approximately 23.1 million out of 70.8 million children were uninsured for all or part of the 1995 1996 period.
The Proportion of Children With Gaps in Health
Insurance Varies From State to State
The proportion of children with gaps in health insurance varies significantly from state to state due to differences in state economies and residents' income, the prevalence of jobs that offer employer based coverage, the scope of public insurance programs (especially Medicaid), and the existence of other state health reforms.
Texas had the highest proportion of children (46 percent) without health insurance at some point during the 24 month period and Minnesota had the lowest proportion (22 percent).
The highest proportions of uninsured children were found in southern and southwestern states. The following ten states had the highest percentage of children who experienced gaps in their health insurance during 1995 1996: Texas (46 percent); New Mexico (43 percent); Louisiana (43 percent); Arkansas (42 percent); Mississippi (41); District of Columbia (39 percent); Alabama (38 percent); Arizona (38 percent); Nevada (37 percent); and California (37 percent).
The ten states with the highest number of children with gaps in health insurance over the 24 month period were: California (3.4 million); Texas (2.6 million); New York (1.5 million); Florida (1.3 million); Illinois (972,000); Pennsylvania (867,000); Ohio (773,000); Michigan (670,000); Georgia (664,000); and New Jersey (553,000).
FINDINGS: THE CHARACTERISTICS OF UNINSURED CHILDREN
The Census Bureau's Survey of Income Program and Participation (SIPP) conducted from February 1, 1991 to January 31, 1993Cthe latest two year period for which data are available provides useful information about the duration that children are without health insurance as well as the characteristics of those children and their families. The children affected by a lack of health insurance are likely to be without insurance for a significant period of time and are in working families. Almost Half Are Uninsured for One Year or Longer
Approximately half (47 percent) of the children uninsured during the two year survey period were uninsured for one year or longer. One out of seven (15 percent) were uninsured throughout the two year survey period. In contrast, only 7 percent of the children experiencing a gap in health insurance coverage were uninsured for less than three months, and fewer than one out of three (31 percent) experienced a gap of insurance less than one half year (see Figure 1).
Most Uninsured Children Live in Working Families
The uninsured child population was comprised primarily of children whose parents worked. Nine out of ten children (89 percent) who lacked insurance for one or more months lived in households where the head of household worked during all or part of the 24 month period (see Figure 2). Among children uninsured for the full two years, the percentage of household heads employed during all or part of the 24 month period was approximately the sameC91 percent. Almost two out of five household heads (38 percent) for children uninsured throughout the 24 month period were employed full time over the entire 24 months (see Appendix B).
Employment Status of Head of Household for Children Who Were Uninsured One Month or More Over The Two Year Period
Stacey's Working Mother
Cannot Insure Her Family
Stacey (not her real name) was eight years old when she broke her arm during school recess. The fracture was so severe that Stacey needed surgery to treat it, but the surgery would have cost at least $7,000. Although Stacey's mother worked full time, her job did not offer health insurance and she could not afford to purchase individual coverage. As a single parent, Stacey's mother simply could not afford surgery for her daughter's broken arm. The doctor in the emergency room who treated Stacey set the arm, doing the best he could. But non surgical treatment was not enough. Stacey now has to live with an arm that is crooked.
Source: Children NOW, California
Most Uninsured Children's Parents Were Also Uninsured
Most of the parents of uninsured children were uninsured themselves at some point during the two year period. Approximately 85 percent of the parents whose children were uninsured for one month or longer were not covered by health insurance themselves at some point over the 24 month period. Higher rates of uninsurance existed for the parents of children who were uninsured for the full 24 month period: more than nine out of ten parents (93 percent) of chronically uninsured children were uninsured themselves at some point over the two years.
Most of the uninsured parents experienced spells of uninsurance that were the same length as, or longer than, their child's spell of uninsurance. Half of parents (50 percent) had an uninsured spell the same length as their child's and one out of five (21 percent) had an uninsured spell that was longer (see Figure 3). The parents of children who lacked health insurance for the full 24 month period were at risk of a long uninsured period themselves: almost seven out of ten of these parents (67 percent) went without health insurance for the full 24 month period (see Figure 3).
For almost four out of five children (78 percent) with gaps in insurance coverage, neither parent was covered by an employer provided health insurance plan at the time of the child's uninsurance spell (see Appendix A). Other research has shown a sharp decline in the number of working families covered by employer based insurance over the last two decades.6 This decline is due largely to the shift in employment to sectors that offer little or no insurance coverage, and the decrease in the share of premiums paid by employers who do provide health insurance.
In recent years, jobs have moved out of the manufacturing sector, where employers provided relatively generous health insurance coverage for both workers and their families, to the service sector, where health insurance is less likely to be offered especially health insurance with generous employer premium coverage for family plans. As a result, there has been a sharp decrease in the number of children covered by private, employment based insurance and an increase in uninsured parents who work for businesses that do not offer affordable and, in many cases, any health benefits.
In addition, many working parents are periodically unemployed and uninsured. A third of the unemployed lack insurance coverage.7 When workers lose their jobs, many have the right under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to pay the total premium on their own and to remain in the employer's group, generally for up to 18 months. However, many unemployed workers are unable to afford the premiums. Studies show that only one out of five people eligible for COBRA benefits elect such coverage.
Daniel's Family Cannot Afford COBRA Coverage
Daniel, one of five children, was three years old when he started complaining about a pain in the right side of his abdomen. Four months earlier, Daniel's father had lost his job with the State of Utah and with it, the family's health insurance. Unable to afford family health insurance coverage or visits to a doctor, Daniel's parents were relieved when their son's stomach pains abated. One month later, Daniel's stomach ache turned into a life threatening emergency and the child was diagnosed with a congenital hernia in serious danger of rupturing. Luckily, surgeons performed emergency surgery and Daniel is healthy today. However, this emergency probably could have been averted by a physician visit had the family been covered by health insurance and Daniel's parents would not have inherited the large, unaffordable medical bills they face today.
Source: Utah Issues, Salt Lake City, Utah
A Large Proportion of Children From
Moderate Income Families Are Uninsured
Three out of five (60 percent) of the children experiencing gaps in health insurance coverage over a two year period lived in families with annual incomes of $15,000 or higher in 1991 dollars ($17,280 or higher in 1996 dollars). More than one out of three (34 percent) had annual incomes exceeding $25,000 in 1991 dollars ($28,800 in 1996 dollars). In comparison, fewer than one out of four (24 percent) lived in families with annual incomes below $10,000 in 1991 dollars ($11,520 in 1996 dollars) (see Figure 4).
Children Uninsured for One Month or More, by Annual Family Income
A large proportion of children from moderate income families were uninsured for one month or longer during the 24 month period. More than half the children (50 percent) with family incomes between $15,000 and $25,000 in 1991 dollars ($17,280 to $28,800 in 1996 dollars) were uninsured. Among children with family incomes of $25,000 or more in 1991 dollars ($28,800 or more in 1996 dollars), almost one out of six (16 percent) lacked health insurance (see Appendix A).
Not surprisingly, during the precise period children were uninsured, their family incomes tended to be lower than their family incomes throughout the year. This would certainly be expected for a family losing health insurance due to the temporary unemployment of the head of household or due to a sudden loss of income that makes premiums unaffordable. Thus, more than half of children (56 percent) with uninsured spells of one month or longer lived in families with average monthly incomes of less than $1500 in 1991 dollars ($1728 in 1996 dollars) (see Appendix A).
Many Children Whose Parents Had
High School Degrees or Higher Are Uninsured
Seven out of ten (70 percent) of the children without health insurance for one or more months in the two year period were in families whose head of household graduated from high school or went on to receive a college education. Only one out of eight (12 percent) uninsured children lived in a family whose head of household had no high school education, and approximately one out of six (18 percent) lived in a family whose head of household had some high school, but did not complete a high school education (see Figure 5).
The Majority of Uninsured Children are Non Hispanic White
Non Hispanic white children made up a majority of the children (55 percent) without health insurance for one month or longer over the two year period. Even among children uninsured for the full 24 months, more than half (53 percent) were white. For children without health insurance for one month or longer, 19 percent were Black, 22 percent were Hispanic, and 5 percent were in other non Hispanic racial groups (see Figure 6).
Although minority children did not dominate the population of uninsured children, they were disproportionately represented among children without health insurance for one or more months. Almost four out of ten black children (38 percent) and more than half of Hispanic children (53 percent) were uninsured for one month or longer during the 24 month period, compared to one out of four (25 percent) non Hispanic white children who were uninsured for one month or longer (see Figure 6).
LACK OF INSURANCE COVERAGE LIMITS CHILDREN'S ACCESS TO HEALTH CARE SERVICES
Gaps in insurance coverage limit children's access to health care services. Children have unique developmental needs that require ongoing well child visits, diagnostic screening, and preventive services such as immunizations to ensure that they develop into healthy adults. Unfortunately, uninsured children often do not get the care they need.
- Research has shown that uninsured children receive fewer health care services than insured children do. Uninsured children have fewer physician visits per year, are less likely to receive adequate preventive services and immunizations, and are less likely to be seen by physicians when they are ill:
- Uninsured children often do not see doctors for conditions that require treatment and that could cause long term problems. For example, uninsured children are less likely than children with health insurance to receive care from a doctor for conditions like acute or recurrent ear aches and asthma.
- Compared to children with health insurance, uninsured children who experience injuries even serious injuriesCare less likely to receive medical attention. Those children without insurance coverage are only 73 percent as likely to have their injuries treated by a medical provider.
- When they are hospitalized for similar problems, uninsured children fare worse in hospitals than insured children fare, and they are more likely to die. One study found that the in hospital death rate was 1.46 times higher among uninsured, white children and 1.88 times higher among uninsured, black children when compared to privately insured children.
- When preschool children experience a gap in their health insurance, they often lose their regular health care provider at a time when continuity of care is especially critical to their healthy development. According to one study, preschool children who go without health insurance for more than six months are at increased risk of having more than one health care site.13
- Compared to insured children from white non-poor families, uninsured children are twice as likely to be inadequately immunized.
Maria Suffers Hearing Loss
When Maria (not her real name) entered a new school as a third grader, her teacher believed she was performing below her potential. A health examination arranged by the school's Healthy Start program revealed that Maria had suffered multiple ear infections probably over a period of several years. Maria's father ran a small nursery business and could not afford health insurance. Without insurance to pay for her care, Maria's ear infections were not treated. As a result, scar tissue built up within her ears. Maria became deaf in one ear and lost some hearing in the other. It took a year and a half to equip Maria with hearing aids.
Source: Alberta Schroder, Children Now, California
Recent research by Paul Newacheck and his colleagues reported that lack of insurance coverage was the most significant barrier to gaining access to primary care for children. This study, based on the l993 National Health Interview Survey, found that while poverty and minority status posed significant barriers to gaining access to primary care, the most important barrier was lack of insurance coverage.
This research found that among children in excellent, very good, or good health, uninsured children used only 57 percent as many physician services as did insured children from non poor, white families. In addition, this study reported that, compared to children from non-poor, white, insured families:
Uninsured children were eight times more likely to lack a usual source of care (24 percent for uninsured children vs. three percent for insured children from non poor, white families).
Children without health insurance were nearly four times as likely to go without at least one needed service such as medical care, dental care, prescriptions, eyeglasses, or mental health care.
Uninsured children were more likely to delay or go without needed medical care because of financial barriers (15.9 percent for uninsured children vs. 2.9 percent for insured children from non poor, white families).
Recent changes in the provision and financing of health care are likely to compound the difficulties uninsured children face in gaining access to health care. Previously, providers were able to recoup some of the costs of un-reimbursed care provided to children and families by "cost shifting" that is, by charging higher rates to those who had insurance. Now, however, both public and private payers of health care are taking aggressive steps to curb rising costs, often by turning to managed care organizations that negotiate tight contracts with doctors and hospitals. As managed care organizations have ratcheted down hospital costs, hospitals have reduced the amount of uncompensated care provided to the uninsured. In the future, it will become even more difficult for uninsured children to get the health care they need.
Will the Health Insurance Portability and Accountability Act Decrease the Number of Uninsured Children?
The Health Insurance Portability and Accountability Act of l996, signed into law by President Clinton on August 21, l996, was designed to assist Americans with chronic health problems or preexisting conditions who change or lose jobs, who work in small firms, or who are self employed. Unfortunately, these health reforms probably will not make much difference in the number of uninsured children. Here is why:
Job Changers: As a result of these reforms, workers whose family members have health conditions will not face waiting periods for insurance when they change jobs as long as they were previously insured for a year. If their new employers offer group coverage, premiums for job changers with pre existing conditions cannot be higher than premiums for other employees. If their new employers do not offer group coverage, previously insured workers can buy individual coverage without facing waiting periods for pre existing conditions but nothing guarantees that this individual coverage will be affordable. Job changers (and their families) who were not previously insured for a year and job changers who cannot afford premiums will not benefit.
People Who Lose Jobs: People who lose jobs or who go to jobs that offer no insurance can purchase individual policies under the reforms if they were previously insured for 18 months. However, they must first exhaust COBRA benefits; after that, premiums for individual policies for people in poor health might be twice as costly as premiums for people in good health. Since only about one out of five people eligible for COBRA benefits purchase coverage now, it is unlikely that many persons who lose jobs will be able to maintain insurance as a result of the newly enacted reforms.
Workers in Small Firms: As a result of reforms, insurance companies must now sell policies to employers with small firms (two to 50 workers) and cannot charge more because a worker or family member is in poor health. However, since insurers can still charge companies higher premiums if they file many claims, it is unclear how many additional small companies will offer group insurance because of this reform. Similar small group reforms have already been enacted in a number of states without a significant rise in small businesses opting to add health coverage.
Self employed Workers: Self employed workers will be offered larger tax deductions for health insurance in l997. This reform will make it possible for some self employed workers to purchase health insurance for themselves and their families. However, it will probably make only a small dent in the number of uninsured children.
This report has shown that millions of children go without health insurance for significant periods of time and that many of these children are chronically uninsured. The potential losses connected to children's uninsured spells are great. If a child develops a chronic health problem while uninsured, it can affect that child's health and well being for decades to come. Failure to provide continuous health insurance coverage to America's children compromises their access to health care. Well child care, preventive services, and diagnostic screenings are crucial health care services to ensure children's healthy development.
In the years ahead, the number of children with gaps in health insurance coverage is likely to continue to increase. The continued decline in employment related benefits will result in ever larger numbers of children who go without health insurance for significant periods of time. The increase in the number of young children covered by Medicaid may partly offset the loss of employer based coverage for this age group. But it is unlikely to stem the growing tide of children without health insurance Cand, hence, the number of children without health coverage is likely to grow.
1. John Sheils and Lisa Alecxih, Recent Trends in Employer Health Coverage and Benefits. (Washington, DC : Lewin Group, Inc. for the American Hospital Association, 1996).
3. Starting in 1990, Medicaid expansions required all states to provide Medicaid coverage to pregnant women and children up to age six if their family incomes are less than 133 percent of the federal poverty level. In addition, states must cover children born after September 30, 1983 with family incomes below the poverty level. These expansions are intended to cover all poor children under age 19 by the year 2002.
4. General Accounting Office, Health Insurance for Children: Private Insurance Coverage Continues to Deteriorate (GAO/HEHS 96 129, June 1996).
5. Paul W. Newacheck, Dana C. Hughes, and Miriam Cisternas, " Children and Health Insurance: An Overview of Recent Trends," Health Affairs, Vol. 14, No. 1, Spring 1995, 244:54.
6. Davis, Karen, "Uninsured in an Era of Managed Care," 1996 AHSR Presidential Address, Health Services Research, August 2, 1996
7.Davis, "Uninsured in an Era of Managed Care."
8. Claxton, G., Reform of the Individual Health Insurance Market. (New York: The Commonwealth Fund, 1996).
9. Newacheck et al., "Children and Health Insurance: An Overview of Recent Trends " ; Eugene Lewit and Linda Schuurmann Baker, "Health Insurance Coverage," The Future of Children, Vol. 5, No. 3, Winter l995, 1:13; and Alan C. Monheit and Peter J. Cunningham, " Children Without Health Insurance," The Future of Children, Vol. 2, No. 2, Winter 1992, 154:70.
10.Jeffrey J. Stoddard, Robert St. Peter, and Paul Newacheck, "Health Insurance Status and Ambulatory Care for Children," New England Journal of Medicine, Vol. 330, No. 20, May 19, 1994, 1421:1425.
11.Mary D. Overpeck and Jonathan B. Kotch, "The Effect of U.S. Children's Access to Care on Medical Attention for Injuries," American Journal of Public Health, Vol. 85, No. 3, 1995, 402:404.
12. Jack Hadley, Earl P. Steinberg, and Judith Feder, "Comparison of Uninsured and Privately Insured Hospital Patients: Condition on Admission, Resource Use, and Outcome," Journal of the American Medical Association, Vol. 265, No. 3, January 16, 1991, 374:379.
13. Michael D. Kogan, Greg R. Alexander, Martha A. Teitelbaum, et al., "The Effect of Gaps in Health Insurance on Continuity of a Regular Source of Care Among Preschool Aged Children in the United States," Journal of the American Medical Association, Vol. 274, No. 18, November 8, 1995.
14. Paul W. Newacheck, Dana C. Hughes, and Jeffrey J. Stoddard, "Children's Access to Care: Differences by Race, Income, and Insurance Status," Pediatrics, Vol. 97, No. 1, January 1996, 26:32. Since the period studied, Congress has created the Vaccines for Children (VFC) program, which offers free vaccine to public and private providers to serve eligible children, including the uninsured. Despite significant progress, a report released in February, 1997, estimated that more than one million children in the United States still have not been fully immunized with the most critical vaccnes. United States Department of Health and Human Services Press Release, National 1995 Interim Immunization Goals Met, But Commitment Still Needed to Reach Year 2000 Goals (February 27, 1997).
15. Paul W. Newacheck, Jeffrey J. Stoddard, Dana C. Hughes, and Michelle Pearl, "Children's Access to Health Care: The Role of Social and Economic Factors," forthcoming in Ruth E. K. Stein, editor. Health Care for Children: What's Right, What's Wrong, What's Next. (New York: United Hospital Fund, 1997).
16. Prospective Payment Assessment Commission (PPAC), Medicare and the American Health Care System: Report to Congress. (Washington, DC: PPRC, June 1996), p. 48 and American Hospital Association data cited by Jim Montague and Hilarie Pitman, "Currents," Hospitals and Health Networks, June 5, 1996, p. 10.
17. Katherine Swartz, "Dynamics of People Without Health Insurance," Journal of the American Medical Association, Vol. 271, No. 1, January 5, 1994, 64:66.
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