The Uninsured: An Unsolvable Dilemma?

The uninsured have hit the top of the national policy agenda more than once since the early 1990’s. In 1991 Harris Wofford was appointed and then elected U.S. Senator from Pennsylvania. Wofford ran on a platform touting the need for universal health insurance, garnering significant support not only for his campaign but also for his contention that the United States had an obligation to ensure that every individual had access to necessary health care. Since that time, nearly all candidates for state and national offices have identified the problem of the uninsured as a priority area and pledged to reduce the number of uninsured Americans. In 1993, President Clinton made a proposal to Congress for health care reform designed to provide universal coverage for all Americans.

Simultaneously, private foundations and the Federal government supported research and demonstrations to better understand the demographics and needs of the uninsured population, as well as to develop and assess effective ways to provide coverage. As early as 1986,The Robert Wood Johnson Foundation (RWJF) authorized the Health Care for the Uninsured Program to help expand coverage for workers in small businesses. RWJF continues to support the State Coverage Initiatives program, which works with states to plan, execute, and maintain health insurance expansions, as well as to improve the availability and affordability of health care coverage.(1) Over the last three years, the Health Resources and Services Administration awarded nearly $40 million in grants to 40 states, one territory, and the District of Columbia to develop plans for providing their uninsured citizens access to affordable health insurance.(2) In March 2003, RWJF, in conjunction with more than 100 supporting organizations, conducted Cover The Uninsured Week, a campaign to raise awareness about the plight of the nation’s uninsured through more than 500 events in communities across the country.(3) Just last month, John Sheils and Randall Haught of The Lewin Group authored a report, as part of the RWJF-funded Covering America project., that analyzes 10 diverse proposals to insure more Americans and explains the costs and trade-offs associated with each of the proposals.(4)

Despite the efforts described above and many others, the number of Americans without health insurance continues to rise. While we have learned more about the problem, the changing economy and labor market have also shifted. The majority of the early demonstrations and much of the research were based on the understanding that the uninsured were workers, and they were disproportionately concentrated in small businesses.(5) Early this fall the Census Bureau reported that between 2001 and 2002 the number of uninsured rose by 2.4 million to 43.6 million,(6) the largest increase in over a decade.(7) And, now we have learned that the uninsured are not only in small businesses: the Commonwealth Fund released a report documenting that 26 percent of the nation’s uninsured worked for firms with 500 or more employers or were dependents of those workers.(8) The most recent issue of Health Affairs features findings from a study reporting that 85 million Americans had no health insurance at some point between 1996 and 1999--more than double the number uninsured at any one point or in any one year during this period. That's also nearly double the 43.6 million Americans recently estimated by the Census Bureau.(9)

It is clear that the problem of the uninsured continues to grow. Efforts to date have been insufficient, and the debate will continue as to how best to address the health care needs of the U.S. population. Going forward, it will continue to be important to identify the root causes resulting in an increasing number of uninsured Americans, as well as to continue to develop policies and interventions designed to address the problem.

HCFO findings briefs and reports related to the uninsured:

"Health Plan Good 'Catch' for Fishing Industry," AcademyHealth, Vol. 6, Issue 5, October 2003.

"Community Characteristics Unable to Explain Disparities in Purchase of Individual Insurance by Minorities,” AcademyHealth, Vol. 5, Issue 1, January 2002.

Alteras, Tanya T. "Understanding the Dynamics of 'Crowd-out': Defining Public/Private Coverage Substitution for Policy and Research," AcademyHealth, June 2001.

HCFO has funded a number of projects that directly inform policy related to uninsured Americans:

Title: The Dynamics of Health Insurance Coverage: 1996 to 2000
Grantee Institution: The Urban Institute
Principal Investigator: Linda Blumberg, Ph.D.
Grant Period: September 2003—April 2004

The researchers will examine the dynamics of health insurance for children and adults under age 65 from 1996 to 2000, a dynamic period characterized by the implementation of national welfare reform, SCHIP, and an economic boom. They will document the patterns of insurance coverage and public program eligibility, estimate the impact of the implementation of SCHIP on insurance coverage for eligible children and previously Medicaid eligible children, and assess the extent to which the economic expansion affected the insurance coverage of previously uninsured adults. The objective of this project is to inform the design of more effective strategies to maintain or increase insurance coverage and to understand better the determinants of participation and crowd-out that can be useful when considering coverage expansions. The findings will also help to better predict the implications of reductions in coverage resulting from states’ efforts to balance their budgets or in the economic context of a recession.

Title: Effects of the Balanced Budget Act and Market Forces on the Health Safety Net
Grantee Institution: Virginia Commonwealth University
Principal Investigator: Gloria Bazzoli, Ph.D.
Grant Period: September 2001—February 2004

How has the Balanced Budget Act of 1997 and other major trends (i.e., growth in the number of uninsured, growth in private managed care, and Medicaid managed care) affected the US hospital safety net? Researchers at Virginia Commonwealth University are examining the structural, operational, and outcome-related impacts of the changing environment. Specifically, they are studying four research questions: 1) How are recent changes in hospital reimbursement through BBA 97 and the Balance Budget Refinement Act of 1999 (BBRA) interacting with other market and policy forces to affect the role and involvement of hospitals in local health safety nets? 2) How are current financial pressures affecting the operational decisions of safety net hospitals related to patient care staffing and the intensity of services provided? 3) How are current financial pressures and operational decisions in response to these pressures affecting the quality of patient care within safety net hospitals? 4) As BBA and BBRA provisions are reassessed and revised over the next two years, what potential effects would these revisions have on hospital involvement in safety net care, their operational decisions, and ultimately the quality of care that patients receive? The objective of the project is to provide information to policymakers and hospital administrators about the effects on the safety net of changes in reimbursement to help them formulate policy that addresses potential unintentional consequences of the BBA.

Title: Changes in Physicians’ Decisions to Treat Medicaid Patients and the Uninsured
Grantee Institution: Health Research and Educational Trust
Principal Investigator: Phillip R. Kletke, Ph.D.
Grant Period: December 2001—May 2003

What are the factors in physicians’ decisions to treat Medicaid and uninsured patients, and how have these factors and decisions changed over time? Specifically, the researchers are looking at the following questions: 1) Have the determinants of physician participation in Medicaid changed since the mid-1980s? 2) Have the factors influencing physicians’ decisions to treat uninsured patients changed in recent years? 3) Which physicians have discretion about whether they accept underserved patients and how does that affect the number of patients they treat? 4) To what extent are Medicaid and uninsured patients concentrated into the practices of a few physicians? As part of these analyses, the research team is looking at the proportion of physicians treating Medicaid and uninsured patients, including how that number has changed over time. They also are looking at the effects of the changing health care market (i.e. growth of managed care and changes in physician organization) on physicians’ decisions. The objective of the project is to provide policymakers with more information about the factors that influence physicians’ decisions to treat underserved populations.

Title: How Managed Care Growth Has Affected Health Departments’ and Physicians’ Ability to Provide Indigent Care
Grantee Institution: University of Pittsburgh
Principal Investigator: Christopher Keane, Sc.D.
Grant Period: January 2002—March 2003

To what extent have increases in managed care affected the provision of care for the uninsured by local health departments (LHDs) and physicians? Researchers at the University of Pittsburgh are analyzing whether managed care has: 1) diverted Medicaid revenues away from LHDs, reducing their cross-subsidization and provision of care for the uninsured; 2) decreased the Medicaid revenue of doctors employed by organizations with a mission to serve the uninsured, and decreased these physicians’ charity care; 3) decreased physicians’ autonomy, leading to decreased charity care; 4) decreased LHDs’ ability to ensure access; and 5) reduced trust in medical providers among the uninsured, leading to lower utilization. They are using two rounds of the CTS Household and Physician Surveys, InterStudy data, American Hospital Association data, the Area Resource File, and a representative survey of 240 LHDs in his analyses. The project is exploring why high levels of managed care penetration are associated with reduced access among the uninsured, and is developing policy implications from the study’s findings, describing unforeseen consequences of recent policies, and assessing implications for future policy.

Title: Studies of the Working Uninsured, Their Dependents and Insurance Reform on Their Behalf
Grantee Institution: The Urban Institute
Principal Investigator: Linda Blumberg, Ph.D.
Grant Period: June 2000—July 2002

What are the effects of certain insurance market reforms that were designed to expand coverage? The researchers at the Urban Institute conducted a series of 5 different analyses about the working uninsured and these effects using the Current Population Survey (CPS), the National Survey of America’s Families (NSAF), and the National Health Interview Survey. In particular, they attempted to answer the following five questions: 1) Who are the working uninsured? 2) Why do employer-sponsored coverage rates vary across the 50 states? 3) Have health insurance market reforms affected the composition of insured risk pools? 4) Did HIPAA have any effect in the small group market? and 5) Why do so many workers in large firms lack health insurance? The objective of these studies is to provide a better understanding of the working uninsured to better inform the policy debate about coverage expansions and identify those interventions most likely to work.

Title: The Fishing Partnership Health Plan: A Model for Reducing the Numbers of Working Uninsured
Grantee Institution: Boston University
Principal Investigator: Stephen M. Davidson, Ph.D.
Grant Period: July 2000—June 2003

What effect has the establishment of the Fishing Partnership Health Plan (FPHP), a health plan developed in Massachusetts to provide subsidized coverage to uninsured commercial fisherman, many of whom operate as small business owners or employees, had on this community? The plan - developed and implemented by Caritas Christi Health Care System, the Massachusetts Fisherman’s Partnership, and Tufts Health Plan - began offering services in December 1997. As of September 30, 1999, it had 683 subscribers with 1437 covered lives. Coverage is subsidized by state and federal sources, and the largest premium subsidy available is 46%. The researchers are: 1) determining the utilization and costs of FPHP as compared to a control group of insured persons matched on several characteristics; 2) identifying factors associated with enrolling or deciding not to enroll; and 3) examining the process of developing the FPHP in order to identify critical steps, issues, and roles of key players in order to determine the feasibility of implementing a similar model with other uninsured working populations. The objective of this study is to provide policymakers with a better understanding of whether the FPHP model should be considered as a model for other uninsured groups.

Title: The Effects of the New York Health Care Reform Act of 1996 on Health Services Accessibility and Efficiency
Grantee Institution: Rutgers University
Principal Investigator: Joel C. Cantor, Sc.D.
Grant Period: November 1997—July 2001

What is the impact of the New York Health Care Reform Act (NYHCRA) of 1996 (implemented in January 1997) on access to and efficiency of health services? NYHCRA replaced the regulatory control of hospital rates with negotiated rates driven by market forces and established public goods pools to finance health care for uninsured and low income New Yorkers, support GME, and fund other specific health care initiatives. The researchers investigated effects of NYHCRA on the delivery of care to low-income populations, access to care for vulnerable populations, and the efficiency of hospitals. This study was conducted in close cooperation with the New York State Department of Health and the United Hospital Fund, organizations which, with HANYS, comprise the New York State NYHCRA Study Group. The objective of the study was to inform the policy debate in New York in 1999 when NYHCRA expires, as well as to assist other states in developing health care financing systems that seek to finance public goods in an increasingly competitive health care market.

Title: Uninsured in America: Individual and Community Factors
Grantee Institution: University of Washington
Principal Investigator: Barry Saver, M.D.
Grant Period: March 1999—August 2000

Does an individual’s community have an impact on the decision to purchase health insurance in the private market? A team of University of Washington researchers examined whether community-level characteristics, such as unequal income distribution, segregation in housing, and availability of safety net services, affect the decision to purchase private health insurance, as well as access to care of uninsured persons. Access was measured using estimates of services available to uninsured or vulnerable populations in the community (e.g., the community's "safety net"), as well as whether the availability of safety net services influences low-income individuals' and families' decisions about whether or not to purchase individual insurance. In addition, the researchers estimated the probability of purchasing individual insurance, delaying or not obtaining care, utilizing outpatient services, and having a regular source of care. They used the Community Tracking Study Household Survey, along with data from HCFA, the American Hospital Association, the Census Bureau, the Area Resource File, the Urban Institute's "Assessing the New Federalism" project, and George Washington University data on the percent of medically underserved persons served by federal and state funds or programs. The project’s objectives were to: 1) assess how individual, community, and state-level factors affect the decision to remain uninsured or to purchase individual health insurance and whether those factors explain lower rates of individual insurance purchased by minorities; and 2) describe access problems experienced by the uninsured.

Publications from this grant.

Title: Research on the Effect of Community Variability on Financing Strategy Effectiveness
Grantee Institution: Washington State University
Principal Investigator: Michael Hendryx, Ph.D.
Grant Period: March 1999—August 2000

How does a community’s social capital, level of income inequality, and financing and organizational arrangements affect access to health care, satisfaction with care, out-of-pocket costs, and health status? To examine the role of these community characteristics researchers at Washington State University tested three hypotheses: 1) social capital and income inequality variables are more powerful predictors of health status, access to care, cost, and satisfaction with care than type of insurance coverage, physician supply, or managed care penetration; 2) for those with a given type of insurance status (including uninsured), community characteristics, including social capital explains significant variability in health status, access to care, costs, and satisfaction with care; and 3) social capital mediates the relationship between independent variables (income inequality, type of insurance coverage, physician supply, and managed care penetration) and dependent variables (access, satisfaction, cost, and health status). They merged the Community Tracking Study Household Survey with data from the U.S. Census, the National Media Marketing database of Social Capital Indicators, interviews with public health department officials in selected cities, the National Directory of Managed Care Organizations, local and state medical societies’ data on physician supply, and FBI Uniform Crime Reports. The objective of this study was to test the hypothesis that in communities with high social capital, the effects of income inequality, insurance coverage, and managed care penetration on dependent variables will be weak, while communities with low social capital will have relatively stronger relationships between the two sets of variables.

Publications from this grant.

Title: The Effect of Expanding Medicaid Coverage to Poor Uninsured Women on Maternal and Infant Health Outcomes
Grantee Institution: Harvard Medical School
Principal Investigator: Arnold M. Epstein, M.D.
Grant Period: March 1992—February 1996

Have the recent Medicaid eligibility expansions improved pregnancy outcomes for low-income women? Harvard Medical School evaluated the impact of these expansions on the utilization of prenatal services, health outcomes of the mothers and their infants, incidence of Caesarian sections, and length of hospital stay in two states -- California and South Carolina. The researchers used linked hospital discharge and vital statistics data to compare these factors before and after the expansions for the previously-uninsured women and infants with those who have private insurance coverage.

Publications from this grant.

Title: Health Care Utilization Among the Previously Uninsured
Grantee Institution: University of Southern Maine
Principal Investigator: Elizabeth H. Kilbreth
Grant Period: November 1991—March 1995

Are there differences in the patterns of use of health services and enrollment/disenrollment between previously-uninsured enrollees in state-sponsored insurance demonstrations and commercially-enrolled individuals in the same health systems? The objective of the study of demonstrations in Maine and Washington was to aid policymakers, insurers, and program planners in developing cost-effective programs for the uninsured. This study, conducted by the University of Southern Maine, compared health status, demographic characteristics, and health care use among demonstration and commercially enrolled populations. It also evaluated the effect of prior insurance status and plan cost sharing features on the use of health services and disenrollment.

Title: Effects of Competition and Rate Regulation on Access to Physician Services and Uncompensated Care
Grantee Institution: Western Consortium of Public Health/University of California
Principal Investigator: Glenn A. Melnick, Ph.D.
Grant Period: November 1990—April 1994

This project extended a previous analysis of the impact of the New Jersey Uncompensated Care Trust Fund on access to and use of hospital services by the uninsured, and of the impact of reduced hospital financial status on the provision of uncompensated care in California. The New Jersey portion of the study examined whether observed differences in the type and quantity of services received by the uninsured were attributable to physician factors. Investigators examined whether: (1) uninsured patients receive care from different physicians than patients covered by Medicaid and private insurance; (2) patients from different payer groups are treated differently by the same physician; and (3) what role the individual physician plays in explaining differences in costs among similar patients from different payer groups. The California portion of the study assessed the effects of the recently-observed reduced financial status of hospitals associated with increased competition in the state on the provision of uncompensated care.

Publications from this grant.

Title: Impact of Various Health System Reform Options on the Distribution of Health Care Costs Across All Payers
Grantee Institution: The Urban Institute
Principal Investigator: John F. Holahan, Ph.D.
Grant Period: November 1990—December 1993

Developing a better (and more timely) tool for assessing the impact of proposed changes in health care financing on all segments of the population was the goal of this Urban Institute study. The project built upon the Institute's TRIM2 model, which simulates the effects of tax and government programs on family income, by adding the ability to simulate the expenses of private health insurance and out-of-pocket expenses. In addition, cost shifting among public and private payers, including the burden of uncompensated hospital care, was simulated. The expanded TRIM2 model was then used to analyze how costs are redistributed among payers and the impact on the number of uninsured and underinsured associated with several different strategies to restructure health care financing.

Title: The Dynamics of Spells Without Health Insurance
Grantee Institution: The Urban Institute
Principal Investigator: Katherine Swartz, Ph.D.
Grant Period: February 1991—December 1992

The duration of spells without health insurance and the factors associated with both chronic and short-term uninsured spells were the focus of this study. The study used a population-based longitudinal data base to: 1) analyze uninsured spells experienced by children, 2) analyze adults who experience multiple spells, and 3) analyze how individuals conclude uninsured spells.

Title: Effects of a Statewide Perinatal Program for the Uninsured
Grantee Institution: Harvard Medical School
Principal Investigator: Arnold M. Epstein, M.D.
Grant Period: August 1990—November 1992

When a state expands Medicaid, does coverage always extend to low-income pregnant women? This Harvard Medical School study sought to measure whether Massachusetts' Healthy Start Program, a statewide perinatal program to provide health care to pregnant women with family incomes from 185% of poverty (the Medicaid eligibility cut-off) to 200% of poverty, reduced preventable morbidity and mortality by comparing hospital data from 1984 (one year before Healthy Start's initiation) and 1987 (two years after initiation).

Footnotes:

1 www.statecoverage.net

2 www.statecoverage.net/hrsa.htm

3 rwjf.org/news/releaseDetail.jsp
?id=1046708993087&contentGroup=rwjfrelease

4 rwjf.org/research/researchByArea.jsp?
title=Health+Insurance+Coverage&id=000001&detailID=1156

5 Helms, W. David, Anne K. Gauthier, and Daniel M. Campion, “Mending the Flaws in the Small-Group Market,” Health Affairs, 11:2, Summer 1992, p. 8.

6 www.census.gov/Press-Release/www/2003/cb03-154.html

7 www.kff.org/content/2003/4142/4142.pdf

8 Glied, Sherry, Ph.D., Jeanne M. Lambrew, Ph.D., and Sarah Little, “The Growing Share of Uninsured Workers employed by Large Firms,” Briefing Note, The Commonwealth Fund, Pub. #672, October 2003.

9 Short, Pamela Farley and Deborah R. Graefe, “Battery-Powered Health Insurance? Stability in Coverage of the Uninsured,” Health Affairs, November/December 2003, pp. 244.