The latest government statistics estimate that 47 million Americans do not have health insurance coverage. According to the Kaiser Family Foundation, 54% of those Americans are in working families.
These are the working uninsured and are often in part-time and hourly jobs where they don’t have access to a major medical plan through their employer or spouse. Many are employed in high-turnover industries such as restaurants, retail and hospitality.
Numerous employers are turning to limited-benefit health plans, typically 100% employee-paid, to provide affordable health insurance to their uninsured workers. Premiums for such a plan often start at one or two hours’ pay per week, making access to health insurance a reality for part-time employees making $8 to $12 per hour.
Producers selling these limited-benefit plans need to understand how underwriters assess the risk for working uninsured in a group. These attributes are typically completely different from the population that has access to traditional major medical coverage. For underwriters, it is important to identify these risks so that the group can be assigned the best classification possible.
A matter of priority
The health insurance industry often makes an incorrect assumption that everyone knows the importance of healthy living and the consequences of poor lifestyle choices. This may be true for those with traditional major medical coverage, who have had ready access to the health care system. However, for the working uninsured, even if their employer offers a limited-benefit plan, their ability to get access to health care often ends up being a matter of what they can afford.
CIGNA market research completed in 2008 found 82% of the working uninsured felt that good health insurance is too expensive. More than half of that 82% had a household income of $25,000 or below.
A significant finding for underwriting such groups is that this same study found 71% of the working uninsured often skipped routine doctor visits because of the cost, even though 61% of the population admitted they frequently worry that an accident or illness could cause major financial trouble. This situation obviously leads to a higher health risk classification.
Often, enrolling in a health insurance plan is not as high a priority for the working uninsured as it is for the working population in general. It is key for underwriters to remember that unlike salaried or more highly compensated employees with traditional major medical coverage, the working uninsured are making only $8 to $12 per hour. This income range means that other pressing financial obligations are a higher priority than “optional” expenses like health insurance. CIGNA research found that health insurance was 8th on the list of financial priorities among the working uninsured, ranking behind rent-mortgage, groceries, utilities, gas, car insurance and vehicle maintenance.
What can this tell us about the working uninsured? By placing health insurance further down their list of financial priorities, their ability to receive regular health care is impaired. Access to regular health care could help them take the steps necessary to lead a healthy life and avoid catastrophic illnesses in the future.
A chronic characteristic