The Uninsured in the United States:

Public Health’s Response and Responsibility

Mary E. Homan, MA

H. Douglas Adams, PhD

Spring 2007

Saint Louis University

School of Public Health

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For the duration of President Bush’s tenure in office, the public and private sector

has been consistently reminded of the draining cost of healthcare to insurers, the insured,

and to those who do business with both. We hear tales of small-business owners

suffering the burden of cost to cover employee health insurance. We hear of middle-class

families and working poor struggling to pay healthcare premiums, co-pays, and other

health-related costs. We hear about the uninsured and the growing faction of

underinsured Americans who cannot pay for chronic prescription medication or to take a

child to see a specialist.

However, not all the evidence is as anecdotal of a family member unable to afford

prescriptions or an impoverished mother not being able to establish prenatal visits. The

literature suggests and policymakers concur that lack of access to healthcare is beyond

troubling; it is a crisis. The National Academies (which include the National Academy of

Sciences, the National Academy of Engineering, the Institute of Medicine, and the

National Research Council) reported in September 2006 that “the percentage of

Americans without health insurance in 2005 rose to 15.9 percent, 46.6 million people,

according to the U.S. Census Bureau. The number of uninsured children also increased,

for the first time since 1998, to 8.3 million.”(1) The Institute of Medicine estimates that

approximately 18,000 Americans die prematurely each year because they lack health

insurance.

Recognizing such a crisis, this issue paper will seek to parse out the underlying

issue of lack of healthcare coverage as well as the challenges to addressing the issue.

Third, this paper will articulate the public health community’s response to the crisis,

taking into particular consideration the tenuous relationship between notions of justice
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versus notions of fairness especially when public health must make recommendations to

policymakers. Finally, this paper will seek to recommend not an outlined procedure or

legislation as that is beyond the scope of the paper but rather what should be the

objectives of such legislation. In analyzing the issue of uninsured and uninsurability, this

paper will operate out of the four-principles approach to bioethics developed by

Beauchamp and Childress(2) in the 1970s, recognizes four key principles that arose from

reflections on common morality and the medical tradition. Accordingly, the four

principles, autonomy, nonmaleficence, beneficence, and justice, provide a simple,

accessible, and culturally neutral approach to thinking about ethical issues in

healthcare.(3)

The Crisis of Lack of Healthcare Coverage

The single most influential factor contributing to the lack of insurance coverage is

poverty. More than 30% of those at or below the poverty level had no insurance

coverage, a rate double that for the total population. However, it should be noted that

many argue that the current and official poverty measure(4)(5) in the United States is

flawed and does not adequately inform policy-makers or the public about who is poor and

who is not poor, according to a national research panel led by Robert Michael, the

Eliakim Hastings Moore Distinguished Service Professor in the Irving B. Harris Graduate

School of Public Policy Studies.(6) One study points out that persons who border the

poverty line (between 100 and 125% of the poverty line) faced an uninsured rate of

28%.(7) It is this pervasive influence of poverty on the uninsured rate that is so

compelling. A review of other factors contributing to a lack of insurance demonstrates

Homan, ME 4

that for almost every variable influencing the uninsured rate, the addition of poverty

further increases the rate of the uninsured.(8)

The State of Missouri faces similar challenges. The Missouri Foundation for

Health reports that in 2005, between 635,000 and 707,000 Missouri residents were

without health insurance. In 2004 dollars, the total national value of health lost in a single

year because of lack of insurance is estimated at $104 billion, which represents more than

two times the estimated $48 billion cost of covering all of the nation’s uninsured.(9)

Economically speaking, the more people are ill, the more work is missed, the less pay is

earned and the lower taxes are gathered.

Women and in particular pregnant women find themselves in a very difficult spot

with healthcare coverage. The number of women in the United States who are uninsured

grew 3 times faster than the number of men without health insurance during the late

1990s and early 2000s.(10) In 2003, it was estimated that of the 45 million Americans

(15.6% of the total population) without health insurance for the entire year, 21.2 million

were women (14.4% of all women).(11, 12) This represents an increase from 2002 when

it was estimated that of the 43.6 million Americans (15.2% of the total population)

without health insurance for the entire year, 20.2 million were women (13.9% of all

women).(13) Approximately 13% of all pregnant women are uninsured.(14) The

following diagram from the Institute of Medicine illustrates pregnant women and infants’

lack of coverage.
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The challenges to addressing healthcare coverage

It should be noted that because someone is uninsured or underinsured does not

mean that they are Medicare/Medicaid eligible. Medicare was established as a federal

health insurance program in 1965 under the Social Security Act. This act provided a

hospital insurance program for the with a supplementary medical benefits program. This

expanded program of medical assistance was to increase benefits under the Old-Age,

Survivors, and Disability Insurance System and to improve the Federal-State public

assistance programs. Whereas, Medicaid is a state administered program and each state

sets its own guidelines regarding eligibility and services. Medicaid is a program of health

coverage for certain people with low incomes or very high medical bills where eligibility
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for depends on age, disability or family status and on an individual’s (or family’s) income

and resources. Although the Federal government establishes general guidelines for the

program, the Medicaid program requirements are actually established by each State.

Whether or not a person is eligible for Medicaid will depend on the State where he or she

lives.(15)

The Missouri Foundation for Health reported in 2005 that Missouri Medicaid

currently covers over 540,000 low-income children and more than 200,000 low-income

adults in families with children. The majority of covered adults in families with children

are women. Children represent the largest demographic group served by Missouri

Medicaid, with nearly 56 percent of all Missouri Medicaid consumers being age 18 or

younger. (16) Missouri Medicaid also covers approximately 74,000 Missourians age 65

and over as well as 140,000 residents who are blind or disabled.

Between 2000 and 2004 Missouri experienced a sharp economic decline.

Missouri’s seasonally adjusted employment topped out at 2.886 million in December of

2000 and then hit a low of 2.827 million in August of 2003 for a job loss of 59,000.

Employment has since climbed to 2.903 million for a job gain of 76,000 jobs off of the

low. Despite this increase in jobs, it should be noted that in the most recent recession,

Missouri had a 2% decline in employment compared to a national decline of only 1.5%.

Furthermore, despite the fact that Missouri employment is up 2.7% off of the low in

August of 2003, the nation as a whole has experienced an increase of 6.5% in its total

employment since coming off of its employment trough in January of 2002.(17)

During this period of time, the number of people below 200 percent of the federal

poverty level (FPL) increased by 330,000 (194,000 adults and 136,000 children). The
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rate of employer-sponsored insurance (ESI) fell from 71.9% to 64.2% while Medicaid,

SCHIP, and state-sponsored insurance only increasing 3.8%.(18) The Missouri

Foundation for Health reports that a loss of Medicaid coverage because of the 2005

cutbacks in eligibility will likely translate into increases in the number of uninsured

Missourians. The decline in Employer-Sponsored Insurance (ESI) is likely to continue.

Increases in health care costs and thus insurance premiums are likely to continue to grow

faster than workers’ earnings. The decline in ESI will be further exacerbated if

employment losses in large firms and the shift in employment from high-ESI industries to

low-ESI industries continue. The increased numbers of uninsured will place heavy

pressures on safety net providers throughout Missouri.(18)

Many cannot afford the health premiums of large insurance companies typically

offered by employers. The Kaiser Family Foundation reports that the average annual

premium for an individual was $4,242, while family coverage cost an average of

$11,480. The 2006 poverty threshold for a family of four in the United States was

$20,000.(19) That means over half of the family income would be going towards health

insurance. The US Census Bureau reported in 2004, over 13% of Missourians lived in

poverty. Therefore, at minimum 13% of Missouri residents would have no way of paying

for employer health insurance.

President Bush’s healthcare reform plan from the 2007 State of the Union

Address encourages a “tax-credit” for businesses for employee health insurance. Under

this new plan, the President's proposal “levels the playing field for Americans who

purchase health insurance on their own rather than through their employers, providing a

substantial tax benefit for all those who now have health insurance purchased on the
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individual market.”(20) The President’s plan “lowers taxes for all currently uninsured

Americans who decide to purchase health insurance.”(20) The plan begs the following

questions: Shouldn’t all people have health insurance? Why should a low-income family,

who statistically is at greater risk for workplace injury, chronic workplace disease, and

other diseases and illness derivative of lower socio-economic status, be forced to hand

over almost one-fourth of their family household income (under the new plan, workers

would receive a tax deduction – $7,500 for singles, $15,000 for couples and families)

because their income would be taxed at $35,000 instead of $20,000.(21) These

unreasonably high costs don’t only affect persons of lower-income status. Middle-class

families and working adults will also face an increase in costs especially when searching

for companies willing to cover high-risk occupations (factory line jobs, construction, etc.)

that previously were not as high when employers purchased an employee package.

The other major challenge to uninsured persons aside from lacking healthcare

coverage is going without needed medical services. Uninsured families report the most

financial difficulties accessing care: nearly 25 percent of low-income uninsured families

reported forgone care, and almost 20 percent of uninsured families across all income

groups did so.(22) The Commonwealth Fund found that 54 percent of underinsured

people went without at least one of four needed medical services because of cost—twice

the rate of those with adequate insurance.(23) A 2005 Kaiser study found that the care-

seeking behavior of those with private coverage and medical debt was more like the

uninsured than the insured without medical debt: about 28 percent of both the insured

with medical debt and the uninsured postponed care because of costs, compared to six

percent of the privately insured without medical debt.(24) Kathleen Stoll, health policy
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director at the Families USA consumer advocacy group, said 10.7 million insured

Americans spend more than a quarter of their annual paychecks on health care.(25)

In 1999, the Missouri pool’s average yearly premium for individual coverage was

$4,920 (the highest of all pool states), which is about 12.2 percent of the state’s median

household income. Also, Missouri’s quoted rate relative to pool rate is upwards of 300%.

Therefore the premium cap as a percentage of the average comparable plan is 150-200%.

For mental health benefits, Missouri has $25,000 lifetime maximum on benefits allowing

for 30 inpatient days per year, and $3,000 per year for outpatient services.(26)

The following table illustrates reasons why families forgo medical care.
Homan, ME 10

Responses from the Public Health Community

Diane Rowland, executive vice president of the Kaiser Family Foundation

believes that "States that are using Medicaid to broaden health care coverage are using it

as a foundation to build upon for low-income people, which frees up other ways to make

insurance more affordable.” However, as recent as 12 April 2007, the Missouri Senate

passed legislation(27) that would move the state's Medicaid patients into three health

plans, two of which would be administered by managed-care companies. The new benefit

packages would replace the state's existing Medicaid program by 2013. Some critics

argue that Missouri ended Medicaid coverage prior to this bill. Timothy McBride, PhD,

Director, Division of Health Policy and Professor, Department of Health Management

and Policy at Saint Louis University School of Public Health recounts that, “they

[Missouri General Assembly] voted in 2005 to end Medicaid as we know it in Missouri.

This [MO HealthNet] would be its replacement.”(28)

In replacing Medicaid with MO HealthNet, Missouri is taking advantage of new

federal rules, which took effect last year, that allow states to modify their Medicaid

programs on their own rather than through the burdensome process of petitioning the

federal government for approval.(29) SB577 repeals the June 30, 2008 expiration date

for Missouri’s Medicaid program. The bill establishes a pay-for-performance system for

doctors and other medical providers. It also introduces healthy lifestyle choice incentives

that work on a debit card system where one is credited for signing health improvement

plans and making healthy lifestyle choices. These credits could be spent on co-payments,

over-the-counter medications, vitamins, and other health-related services. Women age 18

Homan, ME 11

and older who earn up to 185% FPL ($18,889/yr single woman) can access various

women’s health and family planning services but they cannot have access to employer-

sponsored health insurance.(30)

Amy Blouin, executive director for the Missouri Budget Project blasts the

changes in a letter to the editor. She writes that MO HealthNet does not move Missouri

towards universal coverage “by not restoring health coverage to the more than 300,000

low-income Missourians whose Medicaid health insurance was cut or decreased over the

past several years. Nor does HealthNet help the more than 700,000 uninsured

Missourians.”(31) Other democrat senators agree that a restoration of previous Medicaid

cuts is necessary because to not bring “the tens of thousands of people back into

Medicaid is burdensome to hospitals that treat the uninsured in emergency rooms.

Democrats also say the move ensures that Missouri will lose hundreds of millions of

dollars in matching federal funds to other states.”(32)

Another bill receiving significant attention addresses insurance portability in

compliance with HIPAA.(33) Rep. Sam Page of the 82nd District feels this bill shows a

movement to protecting high-risk individuals who move from one group health insurance

to another.(28) One insurance broker, Rick Gary, CEO, Equos Financial Group, LLP

points out that the bill is an attempt to make Missouri more compliant with an already

existing statute particularly in cases of pre-existing conditions. Rick Gary suggests that

those who are opposing the bill because it does not impact those who are uninsured.(28)

It only addresses people who have health insurance currently. It does, however, address

high-risk (risk will be assessed by members) individuals and that care is retained for that

30% risk. This means people who typically paid 300% of premiums would pay 150%
Homan, ME 12

instead. Another opposition comes from insurance companies because the bill does not

address group termination (how can they selectively eliminate group they don’t want to

cover; this bill prohibits group health providers to terminate group at will). This bill

protects people who move from one company to another especially a smaller company

because once a person is dropped from group health coverage, obtaining individual

insurance is problematic.

Fellows from the Brookings Institution believe that individual health plans could

work if the individual health plan market were not such a disaster.(21) Much of the mess,

they write, is due to inadequate pooling of risks. Pooling risks means grouping people

with high and low expected health outlays. Pooling makes health insurance affordable

for the average person. The workplace serves that function – not ideally but adequately.

Individual health plans cannot serve this function. They also write that the bigger

problem with the Bush plan is that it would not ensure that people would be able to find

insurance at a reasonable price.

President Bush’s insistence on privatizing a public good puts millions of healthy

and ill Americans at risk. It places the burden of finding an affordable insurance plan

with adequate coverage on the shoulders of families who are barely making it through the

month. The new plan will force insurers to question every procedure, every office visit,

more so than before. Families will be forced to endure higher co-pays and longer wait

times because so many families will not be able to afford private insurance. With this

plan, less money will go to services such as Medicare and Medicaid which will endanger

seniors, the disable, and the poor.

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Recommendations for Policy Objectives

As discussed in the introduction, this paper will seek to recommend not an

outlined procedure or legislation as that is beyond the scope of the paper but rather what

should be the objectives of such legislation. In naming objectives and goals, it is

pertinent that legislatures and public health practitioners operate out of a sense of justice.

Beauchamp and Childress concede that justice is often equated with fairness or

equality.(2) Another way to look at justice is from the perspective of the common good

and acting in good stewardship. David Hollenbach explains that the common good is the

good of being a community where people work and make choices together about the

“direction in which our lives are going to go together.”(34) “The common good is

understood as the social conditions that allow people to reach their full human potential

and to realize their human dignity.” The promotion of the common good involves the

principles already considered: respecting human dignity, protecting the poor and

vulnerable, calling for full and active community participation and practicing good

stewardship. Ideally, the common good enables each and every human person to achieve

his or her human development more fully. The principle of common good is the total of

social living, not just the sum of individual goods.

In order to establish a universal healthcare system that benefits all, administrators,

policymakers, and the general public (to name a few) must operate out of a sense of

social justice and from the operating principle of the common good. We might attempt a

cost-benefit analysis pertaining to prenatal women that might prove when women receive

prenatal visits they are at a lesser risk of delivery problems as well as a greater chance of

appropriate birth weights, etc. Limiting services based on cost alone needs to be
Homan, ME 14

eliminated. Insurance brokers in conjunction with clients need to seek out both academic

and practioners’ professional expertise based on longitudinal studies and clinical

evidence of what needs ought to be addressed and covered. To operate within a common

good mentality means looking outside of a sheer political or business model.

The Institute of Medicine’s Committee on the Consequences of Uninsurance

identified five key principles(35) for guiding policy development. The first principle is

listed as the most fundamental however the remaining four receive no specific priority.

These guiding principles are as follows:

1. Healthcare coverage should be universal.

2. Healthcare coverage should be continuous.
3. Healthcare coverage should be affordable for individuals and families.
4. The health insurance strategy should be affordable and sustainable for society.
5. Health insurance should enhance health and well-being by promoting access to
high-quality care that is effective, efficient, safe, timely, patient-centered, and
equitable.
Policymakers at the national level have a particular responsibility in coming to embrace

these five principles because not only is healthcare law established here but also

insurance laws, public health initiatives and funding as well as any amount of lobbying

transpiring to pass or earmark funds in legislation. Holding policymakers and policy

enforcers to a greater sense of accountability is also in the hands of the general public.

We can particularly exercise this in our voting rights so that we are electing officials who

don’t just have one special interest group in mind but truly operate out of a sense of

responsibility to the common good and in line with this paper, operate out of the five

guiding principles put forth by the Institute of Medicine. Once such a precedent is set,

we may move to enhanced and ultimately universal healthcare insurance coverage for

every resident in the United States.

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