Many High Earners Among The 45 Million Uninsured

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New figures from the U.S. Census Bureau show that 16% of the 45 million U.S. residents who lacked health coverage in 2003 had annual household incomes over $75,000 per year.

The number of high-income uninsured U.S. residents grew 4.5% between 2002 and 2003, to 7.6 million. That compares with an increase of 3%, to 37.4 million, in the number of uninsured with annual household incomes under $75,000.

The census results could help health insurance company and agent groups defend proposals to offer different solutions for low-income, moderate-income and high-income uninsured people, rather than setting up a single, government-run program for all uninsured U.S. residents.

But Hanns Kuttner, a senior economist at the Economic Research Institute on the Uninsured, Ann Arbor, Mich., warns against assuming that the census figures prove the existence of a big, untapped market for private individual health coverage.

“Whats unknown is how long people are without health insurance,” Kuttner says.

Anecdotal evidence and some surveys suggest that many high-income uninsured people are people who are moving quickly from one group health plan to another, Kuttner says.

The federal government and state governments have worked hard in recent years to expand coverage for some low-income U.S. residents, such as children.

Although the percentage of U.S. residents with individual or employer-sponsored health coverage fell to 68.6% in 2003, from 69.6% in 2002, expansion of government insurance programs held down the increase in the overall uninsured rate, which rose to 15.6% in 2003, up from 15.2% a year earlier.

Experts note that high-income residents may have many reasons for lacking health coverage.

One reason is that some “high-income” U.S. residents feel as if they are just getting by. An annual income of $75,000 may not go very far for a family living in New York, San Francisco or other communities with high costs of living.

Other high-income people may do without health coverage because they are “between jobs,” are too sick to qualify for coverage, or belong to religions that discourage the use of conventional health care.

America’s Health Insurance Plans, Washington, says 66% of likely voters surveyed in 17 key presidential “battleground” states earlier this year favored a tailored approach to helping different types of uninsured people. Only 27% favored a single program to cover all of the uninsured.

AHIP is recommending that the government expand and improve government health programs to help low-income people, improve special “risk pool” programs to help people with health problems, and use tax incentives and direct subsidies to help healthy, relatively high-income uninsured people buy private health coverage.

The National Association of Health Underwriters, Arlington, Va., also is supporting a combination of expanded risk pool programs for people with health problems and tax incentives for other uninsured people.

“Refundable tax credits are a simple and realistic way to extend private health insurance coverage to uninsured individuals and their families who are in most need of assistance,” says Janet Trautwein, NAHU vice president of government affairs. “We strongly believe that the tax credit should be made available in both the individual market as well as through the employer-based health insurance system.”

Tax incentives and programs such as the new health savings account program could help reduce the number of high-income uninsured Americans by “increasing their taste” for health coverage, Kuttner notes.

But he says public and private organizations might have better luck with expanding and promoting temporary health insurance programs to reach the large number of high-income people suffering from a temporary lack of health coverage.


Reproduced from National Underwriter Edition, September 9, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.