Myths Of The Uninsured

The plight of the nation's 44 million uninsured demonstrates--once again--that nothing in health care is as simple as it seems. Many Americans consider the medically uninsured to be a scandal demanding attention in the 2000 presidential campaign. Bill Bradley already has a plan aiming at universal coverage for an estimated cost of $65 billion annually. But, paradoxically, some of today's uninsured already qualify for government coverage, and even providing it to everyone might not result in dramatic improvements in people's health. How can this be? Our discussion of the uninsured is encrusted in myths. One is that health insurance is necessary to get health care. It isn't. Average health spending on the uninsured actually amounts to about 60 percent of spending on the insured, reports economist Sherry Glied of Columbia University. Some of the uninsured pay themselves; many receive free care that is subsidized by doctors and hospitals--or passed along to others in higher insurance premiums.

It's also widely believed that stingy businesses have eroded insurance by refusing to cover workers. Not really. Between 1987 and 1993, employer-based coverage did drop, from 62 percent of the population to 57 percent. But since then, it's rebounded to 62 percent. Meanwhile, the uninsured population has grown. It was 31 million (13 percent of all Americans) in 1987 and 40 million (15 percent) in 1993 before reaching last year's 44 million (16 percent).

Shrinking government coverage is one cause. The largest loss involves Medicaid: the federal-state program for the nonelderly poor. This is somewhat mysterious, because beginning in the 1980s, Congress made more children eligible for Medicaid. Sure enough, Medicaid coverage grew from 8.4 percent of the population in 1987 to 12.1 percent in 1994. But since then, it's dropped to 10 percent.

Welfare reform may partly explain the decline. Women on welfare and their children automatically qualified for Medicaid. "You went into an office, and you were told you were eligible," says Linda Blumberg of the Urban Institute. But since Congress overhauled Aid to Families With Dependent Children in 1996, welfare rolls have dropped 40 percent. More mothers work at jobs without insurance; yet, many remain eligible for Medicaid because their incomes are low. But (the theory goes) they don't sign up, either because they don't know they're eligible or because it's too much trouble.

Similar problems afflict CHIP (Children's Health Insurance Program). Passed by Congress in 1997, it gave states added funds to expand children's coverage. As a result, perhaps a third to half of the 11 million uninsured children already qualify for government coverage under CHIP or Medicaid. They simply aren't enrolled.

Declining insurance coverage also has another major cause: immigration. It is no accident that two states with very high rates of the uninsured are Texas (25 percent uninsured) and California (22.1 percent), which have huge numbers of immigrants. Many are low-skilled and poorly educated; they get jobs without coverage. Or they can't--or won't--sign up for government insurance. "The language and cultural barriers are enormous," says Leonard Schaeffer, the head of WellPoint Health Network, a large health-maintenance organization. "A lot of people don't want to be identified... They don't want to be in someone's computer."

But suppose--for argument's sake--that everyone gets insurance. Would people's health improve? For many uninsured, the answer is no, because they're already healthy. Two fifths of the uninsured are between 18 and 35. For most of them, insurance would protect against unexpected medical calamity. Children are an additional quarter of the uninsured. Most are fairly healthy; childhood illnesses are typically neither chronic nor critical. The real question is what happens to people with serious ailments. We don't know. No one doubts that insurance would prompt today's uninsured to visit doctors and hospitals more often. But how much this extra care would translate into better health is unclear.

On this subject, the scholarly research disagrees. A recent study from the National Bureau of Economic Research found small effects on children's health of Medicaid's expanded eligibility. A huge field trial between 1974 and 1982 by RAND concluded that more generous insurance conferred benefits only on the poorest and sickest people (about 4 percent of the population), in the form of better control of high blood pressure, for example. On the other hand, a 1993 study claimed that the uninsured face a higher risk of premature death. And a study of pregnant women in Florida found that Medicaid's expansion slightly reduced low-birth-weight infants.

In general, more insurance seems to improve Americans' health only modestly. The apparent explanation is that people's background and behavior--their genetic factors, lifestyles, diets--count for more than medicine in determining health. For the poor, this is disturbing. They are more likely than the middle class to be overweight, to smoke and to drink heavily. Among women, mothers with less than a high-school education are 10 times more likely to smoke during pregnancy than mothers with four years of college (smoking is a risk factor for low-birth-weight infants). Among adults, obesity contributes to heart disease and diabetes.

Here is the nub of the matter. Insurance coverage can be expanded, though doing so involves dilemmas. Already, a fifth of the uninsured refuse coverage from employers, mainly because it seems too expensive. The costlier private insurance becomes--because, say, government requires coverage of certain treatments--the fewer workers will buy it. Government insurance can fill the void, though this squeezes other programs. But even universal insurance is no panacea, because the real problem is not the uninsured but the poor health of the poor. The two problems aren't the same.