Reducing Uninsurance and Underinsurance in America

Big Picture

Uninsured Americans are those who lack health insurance. Underinsurance, similarly, is inadequate health coverage, often because the insurance is prohibitively expensive due to high deductibles, out-of-pocket payments or premiums. As of 2018, 12% of Americans are uninsured, and 29% of these insured individuals are also underinsured.

Graphic from: Commonwealth Fund Biennial Health Insurance Surveys (2010, 2012, 2014, 2016, 2018, 2020). Source: Collins, S.R., et al. “U.S. Health Insurance Coverage in 2020: A Looming Crisis in Affordability - Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2020). https://doi.org/10.26099/6aj3-n655. This figure illustrates the prevalence of uninsurance and underinsurance from 2010-2020 among working-age adults in the U.S. As of 2020, 13% of Americans aged 19-64 were uninsured, and 21% were underinsured.

Operative Definitions

1. Uninsurance: The absence of health insurance. An uninsured person is one without any health insurance coverage.

2. Underinsurance: The state of having health insurance, but this coverage is inadequate due to its high cost.

3. Deductible: The amount of money individuals must pay for health services before health insurance begins paying for their care.

4. Premium: An amount paid in regular installments, often monthly, to receive insurance coverage.

5. Copayment: A predetermined and typically flat fee an individual pays for health care services. The co-payment is paid in addition to an individual’s premium and deductible. For example, some health insurance plans require a $20 copayment for each doctor’s visit.

6. Gig economy: An economy that operates flexibly as businesses hire short-term employees to perform individual jobs, assignments, or tasks (nicknamed gigs.)

7. Gig workers: Employees such as freelancers, short-term employees and independent contractors that perform nontraditional, temporary jobs. They are paid per job or task rather than for the time worked. Consequently, gig workers may complete many tasks or take several jobs in a short time frame, sometimes overlapping gigs to increase revenue.

Important Facts and Statistics

1. Hispanic and Black Americans are significantly less likely to be insured than White Americans. Low- and middle-income individuals are also less likely to have health coverage than their high-income counterparts.

2. Underinsured and uninsured Americans are at greater risk of experiencing medical debt or medical bankruptcy compared to those with adequate health insurance.

3. Policy changes within the last decade, including implementing the Affordable Care Act (2010), have reduced the prevalence of uninsurance but not underinsurance. From 2010 to 2018, the rate of uninsurance in the U.S. fell from 20% to 12%. However, underinsured Americans rose from 23% to 26% between 2014 and 2018.

Four-Point Plan

1) Generate a minimum benefit package for all insurance plans, private and public.

Many individuals are underinsured because certain health services they need, such as vision, dental and gender-affirming care, are not covered by their private or public insurance plans. As such, these Americans must pay out of pocket. Creating a minimum benefit package that all insurance plans must cover can reduce the prevalence of underinsurance.

2) Expand access to short-term, limited-duration health insurance plans for Americans with coverage gaps.

Making short-term insurance plans more affordable, plentiful and accessible can improve insurance coverage for many. Examples include Americans in between jobs, gig workers or poor Americans whose income fluctuates, so they sometimes qualify for Medicaid but not always. Other Americans qualify as underinsured because they have coverage gaps; they may have insurance coverage during certain parts of the year but not others.

3) Eliminate the Medicaid eligibility gap.

The Medicaid eligibility gap affects Americans whose incomes are too high to qualify for marketplace assistance under the Affordable Care Act (ACA) but whose home states have not adopted Medicaid expansion under the ACA. As of 2021, 12 U.S. states had yet to expand Medicaid, leaving millions of their residents unable to access either Medicaid or aid from the ACA. By expanding Medicaid across the U.S. and amending the ACA to cover more low-income Americans, more Americans would have access to adequate health coverage.

4) Expand access to employer-sponsored health insurance for part-time workers, gig workers and employees of small businesses.

The ACA requires businesses with 50 or more employees to provide employer-sponsored health insurance, but companies are not required to cover part-time employees or gig workers. Furthermore, employees of small companies are excluded from coverage. State or national policies may reduce rates of uninsurance and underinsurance by (1) requiring employers to provide health coverage to part-time employees who work a minimum number of hours a week, (2) improving freelancers’ access to short-term or private insurance and (3) requiring more small businesses, such as those with 20 or more employees, to provide coverage to their workers.

Why This Initiative is Important

Americans with poor or no health coverage often have more severe or complex health problems that reduce the individual quality of life, worsen population health and lead to higher national healthcare spending. For instance, because of the high cost of healthcare, uninsured and underinsured Americans are less likely to attend doctor’s appointments or receive preventive cancer screenings. As a result, chronic diseases like cancer and acute illnesses like pneumonia are more common among the uninsured and underinsured. Furthermore, because Americans without proper health coverage delay healthcare, these health conditions are often diagnosed later in life, making them more fatal and expensive to treat.

Acknowledgments

The opinions expressed in this article are those of the individual author.

The following student(s) worked on this nonpartisan proposal: Diane Bao, University of Texas Health Science Center School of Public Health at Austin.

Sources

Blumberg, Linda, et al. “Comparing Health Insurance Reform Options: From ‘Building on the ACA’ to Single Payer.” The Commonwealth Fund, 2019 Oct. 16 https://www.commonwealthfund.org/publications/ issue-briefs/2019/oct/comparing-health-insurance-reform-options-building-on-aca-to-single-payer. Accessed 20 June 2022.

Dickerson, Jane, & Jessie Hastings Conta. “Billing Demystification and the Impact on Uninsured and Underinsured Individuals Seeking Lab Testing.” The Journal of Applied Laboratory Medicine, vol. 6, no. 1, 2021, pp. 327-9. doi:10.1093/jalm/jfaa141. Accessed 7 June 2022.

“Underinsured Rate Rose from 2014-2018, with Greatest Growth Among People in Employer Health Plans.” The Commonwealth Fund, 7 Feb. 2019, www.commonwealthfund.org/press-release/2019/underinsured-rate-rose-2014-2018-greatest-growth-among-people-employer-health. Accessed 1 June 2022.

Zhao, Guixiang, et al. “Health Insurance Status and Clinical Cancer Screenings Among U.S. Adults.” American Journal of Preventive Medicine, vol. 52, no. 1, 2018, pp. e11-e19. doi:10.1016/j.amepre.2017.08.024. Accessed 8 June 2022.