BOX ES.1 Preview of Selected Committee Findings

Here is a preview of the Committee’s most important findings concerning the impact on the family of not having health insurance and the health effects on children, pregnant women and infants of being uninsured. Chapters 1 through 7 include background and discussion of these and other Committee findings. The following Executive Summary provides an overview of the full report.

Insurance Coverage of Families

  • If parents have health insurance, children are likely to be covered as well.

  • In one-fifth of the more than 38 million families that include children, there are one or more family members uninsured.1

  • Many uninsured children are eligible for, but not enrolled in, public programs. More than half of the 8 million children who remain uninsured are eligible for Medicaid or State Children’s Health Insurance Program (SCHIP) coverage.

  • Family insurance coverage is strongly and positively related to income. Just 59 percent of families with children and with income less than 50 percent of the federal poverty level (FPL) have all members covered, compared with 90 percent of families whose income is above 200 percent of FPL.

Insurance Transitions over the Family Life Cycle

  • The structure of public health insurance programs and the cutoff age for dependents’ eligibility in private insurance plans make it more likely that dependent children will become uninsured as they grow up.

  • The link between health insurance and employment for most families creates many opportunities for loss of coverage. In order to obtain or maintain coverage, family work choices may be constrained. Work choices for families enrolled in public insurance programs may also be constrained because of the income ceilings for eligibility.

  • Marriage increases the chances of having employment-based health insurance for the whole family. Getting separated, divorced, or being widowed may increase the risk that family members lose their employment-based coverage.

Financial Characteristics and Behavior of Uninsured Families

  • Families with at least one uninsured member are predominantly lowerincome families.

  • Most uninsured families would not have sufficient funds in their budget to purchase health insurance without a substantial premium subsidy.

  • On average, families with some or all members uninsured spend less on health care in absolute dollars and they use fewer services than do families with all members covered by private insurance. Paradoxically, families with uninsured members are more likely to have high health expenditures as a proportion of family income than are insured families.

1  

The CPS data used in this report considers a person to be uninsured if they are without coverage for a full year or more.



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Health Insurance is a Family Matter BOX ES.1 Preview of Selected Committee Findings Here is a preview of the Committee’s most important findings concerning the impact on the family of not having health insurance and the health effects on children, pregnant women and infants of being uninsured. Chapters 1 through 7 include background and discussion of these and other Committee findings. The following Executive Summary provides an overview of the full report. Insurance Coverage of Families If parents have health insurance, children are likely to be covered as well. In one-fifth of the more than 38 million families that include children, there are one or more family members uninsured.1 Many uninsured children are eligible for, but not enrolled in, public programs. More than half of the 8 million children who remain uninsured are eligible for Medicaid or State Children’s Health Insurance Program (SCHIP) coverage. Family insurance coverage is strongly and positively related to income. Just 59 percent of families with children and with income less than 50 percent of the federal poverty level (FPL) have all members covered, compared with 90 percent of families whose income is above 200 percent of FPL. Insurance Transitions over the Family Life Cycle The structure of public health insurance programs and the cutoff age for dependents’ eligibility in private insurance plans make it more likely that dependent children will become uninsured as they grow up. The link between health insurance and employment for most families creates many opportunities for loss of coverage. In order to obtain or maintain coverage, family work choices may be constrained. Work choices for families enrolled in public insurance programs may also be constrained because of the income ceilings for eligibility. Marriage increases the chances of having employment-based health insurance for the whole family. Getting separated, divorced, or being widowed may increase the risk that family members lose their employment-based coverage. Financial Characteristics and Behavior of Uninsured Families Families with at least one uninsured member are predominantly lowerincome families. Most uninsured families would not have sufficient funds in their budget to purchase health insurance without a substantial premium subsidy. On average, families with some or all members uninsured spend less on health care in absolute dollars and they use fewer services than do families with all members covered by private insurance. Paradoxically, families with uninsured members are more likely to have high health expenditures as a proportion of family income than are insured families. 1   The CPS data used in this report considers a person to be uninsured if they are without coverage for a full year or more.

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Health Insurance is a Family Matter Among families with no health insurance the entire year and incomes below the poverty level, more than one in four have out-of-pocket expenses that exceed 5 percent of income; 4 percent of all uninsured families have expenses that exceed 20 percent of annual income. Family Well-Being and Health Insurance Extension of publicly supported health insurance to low-income uninsured parents is associated with increased enrollment among children. Uninsured parents have poorer health, have poorer access to the health care system, are less satisfied with the care they receive when they gain access, and are more likely to have negative experiences around bill collection compared with insured parents. The health of one family member can affect the health and well-being of other family members. In particular, the health of parents can play an important role in the well-being of their children. Health-Related Outcomes for Children, Pregnant Women, and Newborns Uninsured children have less access to health care, are less likely to have a regular source of primary care, and use medical and dental care less often compared with children who have insurance. Children with gaps in health insurance coverage have worse access than do those with continuous coverage. Previously uninsured children experience significant increases in both access to and more appropriate use of health care services following their enrollment in state-sponsored health insurance expansions. Lower-income, minority, non-citizen, or uninsured children consistently have worse access and utilization than do children with none of these characteristics. These factors overlap to a large extent. However, each exerts its own independent effect on access and utilization. Uninsured children often receive care late in the development of a health problem or do not receive any care. As a result, they are at higher risk for hospitalization for conditions amenable to timely outpatient care and for missed diagnoses of serious and even life-threatening conditions. Undiagnosed and untreated conditions that are amenable to control, cure, or prevention can affect children’s functioning and opportunities over the course of their lives. Such conditions include iron deficiency anemia, otitis media, asthma, and attention deficit–hyperactivity disorder. Uninsured women receive fewer prenatal care services than their insured counterparts and report greater difficulty in obtaining the care that they believe they need. Studies find large differences in use between privately insured and uninsured women and smaller differences between uninsured and publicly insured women. Uninsured women and their newborns receive, on average, less prenatal care and fewer expensive perinatal services. Uninsured newborns are more likely to have low birthweight and to die than are insured newborns. Uninsured women are more likely to have poor outcomes during pregnancy and delivery than are women with insurance. Studies have not demonstrated an improvement in maternal outcomes related to health insurance alone.

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Health Insurance is a Family Matter Executive Summary A FAMILY PERSPECTIVE In America the family is the basic social unit. Strong families are essential to America’s future. We all share an interest in the collective well-being of our national community and in providing the conditions for families to succeed in raising the next generation. This report views the consequences of having more than 38 million people in the country lacking health insurance from the perspective of families, in contrast to most research, which examines the impact on individuals. The vast majority of uninsured individuals live in families. Having one or more uninsured individuals in a family can have an impact, even if some or all of the remaining members of the family have health insurance. In its previous report, Care Without Coverage: Too Little, Too Late, the Institute of Medicine’s (IOM) Committee on the Consequences of Uninsurance concluded that being uninsured can adversely affect an individual adult’s health. In this report the Committee examines two sets of literature, one concerning the relationship between health insurance status and the health of pregnant women, infants, and children and the other on whether having an uninsured member in the family can have a deleterious effect on the family as a whole.1 The Committee acknowledges that it may take more than simply providing insurance coverage to have a positive health impact. Health insurance is, however, an important factor in reducing barriers to care. The Committee addresses these questions: 1   The Committee’s rigorous evaluation of the literature encompassed a wide range of research; its findings are based on the most methodologically sound studies; and results reported are generally significant at the p = 0.05 or better, unless otherwise specified.

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Health Insurance is a Family Matter How does the presence of an uninsured family member affect the health of the rest of the family? Even if only one member of the family is uninsured, could that affect the family’s finances and economic stability? Because parents act as the health care seekers and decision makers for their children, does being uninsured affect their functioning in that capacity? What if their children have no health coverage? Because a family’s health and insurance needs tend to change as its members reach maturity and grow older, how well do the current insurance mechanisms and programs match those needs? Our nation encompasses a rich variety of family structures that reflect how individuals view themselves, the people they live with, and their emotional, social and economic interrelationships. The Committee purposely chooses to view families as self-defined responsibility units whose members’ lives are emotionally and economically entwined. It recognizes that the concept is broadly encompassing, not neat and uniform, but it reflects reality. A person’s own definition of family does not necessarily correspond to the definition of family used by employment-based insurance plans for coverage eligibility. As a result, some self-defined family members may not qualify for coverage. In addition, most of the publicly financed health insurance programs provide coverage for individuals rather than for families as a whole, although people generally function economically and socially as part of a family unit. This mismatch between insurers’ eligibility criteria and a family’s definition of itself affects the coverage patterns of families and, ultimately, the family’s well-being. The mismatch and resulting uninsurance within the family also have important implications for the public debate about expanding coverage. The source of health insurance available to families directly affects whether all members are covered. Employment-based plans are more likely to offer coverage for the entire family than are other types of insurance. The Committee concludes that if all family members are covered, the chances increase that they will get the health care they need in a timely fashion and that the costs of those services would likely have a less destabilizing impact on the family’s finances than if some or all members are uninsured. The Committee also concludes that the health of children and their long-term development would likely be enhanced if the children are covered by insurance. Box ES.1 presents the Committee’s specific findings regarding the nature of the consequences of uninsurance on families. COVERAGE PATTERNS OF FAMILIES AND THEIR SIGNIFICANCE There are 85 million families in the United States, and 17 million of them— about one in five—have one or more members who are uninsured. The more than 38 million uninsured people nationally live with roughly 20 million insured family members, which means that 58 million lives may be affected by the conse-

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Health Insurance is a Family Matter quences of uninsurance. There are more than 38 million families with minor children; 20 percent do not have all their members insured.2 Employment-based insurance is the most common type of coverage. Usually workers purchase coverage when it is offered on the job and buy additional coverage for their dependent family members if they consider it affordable and alternative coverage does not exist. Thus, when parents are insured, whether they are in single- or two-parent families, more than 95 percent of the time all their children are also covered. Among the almost 20 percent of families with some or all members lacking coverage, specific social and demographic characteristics are more common, including lower income, single parenthood, racial and ethnic minority status, and immigrant status. Family insurance coverage is strongly related to family income; families with lower incomes are less likely to be fully insured. Similarly, single-parent families are less likely to have all members covered than are two-parent families (71 percent compared with 85 percent). Lower-income parents are more likely to lack coverage than are their children, because public programs provide coverage for children up to higher family income levels than they do for adults. Nonetheless, many children remain uninsured although they are eligible for public programs. Of the estimated 8 million uninsured children in 2000, most are eligible for Medicaid and SCHIP, but not enrolled (Urban Institute, 2002a). The proportion of uninsured children who are eligible for public programs will likely continue to decrease, if enrollments continue increasing. There are 9.1 million uninsured parents (Lambrew, 2001b). One-third of these uninsured parents have incomes below the federal poverty level (FPL) and another third have incomes between 100 percent and 200 percent FPL.3 The fact that many of the parents are uninsured is significant because parents obtain health care for their children. Even if their children may be eligible for coverage or are actually enrolled, children are dependent upon their parents’ enrolling them in public programs and taking them for treatment. The parents’ decisions on whether, when, and from whom to seek care for their children may be influenced by their own experiences with and knowledge of the health system. When states have expanded Medicaid coverage broadly to include low-income parents as well as their children, the enrollment of eligible children has increased more than it has in 2   Committee analyses are based on tabulations of the Census Bureau’s 2001 Current Population Survey public use file designed to aggregate data by family units prepared by Matthew Broaddus, Center on Budget and Policy Priorities. Families with heads under age 65 are included as well as children under age 18. 3   For 2000, the FPL is $11,250 for a family of two and $14,150 for a family of three. See Appendix D, Table D.1.

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Health Insurance is a Family Matter states without broader parental coverage (Ku and Broaddus, 2000; Dubay and Kenney, 2002). Parents’ lack of knowledge about the programs and their confusion about eligibility, which traditionally are barriers to the enrollment of eligible children, are lower when parents themselves enroll. A parent’s own use of health services is a strong predictor of their children’s use. Uninsured parents are more likely to have negative experiences with the health system than are those with insurance, and this may affect their perception of the value of health care and their willingness to take their children for needed care. Parents without coverage are more likely to report that they are in poorer health than are privately insured parents; they have more trouble gaining access to care when they need it, and more often lack a regular source of care. In addition, as the Committee concluded in Care Without Coverage: Too Little, Too Late, uninsured adults are more likely to delay seeking care for themselves and to suffer poorer health and even premature death than are their insured counterparts. INSURANCE TRANSITIONS OVER THE FAMILY LIFE CYCLE The current patchwork of insurance programs in the United States makes it common for family members to experience periods of uninsurance. Americans take health insurance into account when making decisions about jobs and work and report that their choices are constrained by coverage considerations. As children grow up they are increasingly likely to be uninsured because public programs tend to have more generous family income limits for younger children than for older children and both public and employment-based coverage for children usually ends around their nineteenth birthday. While teenagers or those graduating from college may be ready to go to work, they are less likely than their older coworkers to find jobs that include health benefits or to earn enough to purchase insurance independently (IOM, 2001; Quinn et al., 2000). At an age when serious injuries are most common, some young adults may assume their health needs will not be large or may find health insurance unaffordable, although independently-purchased plans are generally less expensive for them than for older persons. The predominance of employment-based coverage in this country means that families may lose their health insurance when working parents change jobs, are laid off or die. When an older worker carrying employment-based coverage for a younger spouse and dependents reaches age 65, retires, and qualifies for Medicare, the other family members may be left without any health coverage. Alternatively, the parents’ choices about work may be constrained by the need to obtain and maintain health benefits with the job (sometimes referred to as job lock). While having two parents in the family increases the chances of having employment-based coverage for the whole family, it does not preclude dependents’ losing coverage upon separation, divorce, or death of the parent carrying the insurance. Many life transitions, whether resulting from age, employment or a change in marital status, are unavoidable or unpredictable and result in loss of coverage.

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Health Insurance is a Family Matter FINANCIAL CHARACTERISTICS AND BEHAVIOR OF UNINSURED FAMILIES Even in the healthiest of families, if one member has an accident the resulting medical bills can affect the economic stability of the whole family. The impact depends, in part, on whether the injured person was insured, the size of the bills, and the family’s income and other resources. Families with at least one member lacking insurance predominantly have lower incomes (below 200 percent FPL). Not surprisingly, families with uninsured members also have few if any assets and are unlikely to be able to borrow to pay their medical bills. Often they do not have the budgetary resources to purchase health insurance without a premium subsidy, given the relatively high cost of family coverage outside of group plans. The annual out-of-pocket expenses for health care for an uninsured family on average are less in actual dollars and less relative to their income than those expenses for families with coverage. Uninsured families do not have the expense of insurance premiums and are less likely to use any health care services; but those who do generally use fewer services. Paradoxically, uninsured families are also more likely than insured ones to face health costs that are high relative to their income. At the low end of the spectrum, families without health insurance are more likely to have no health care expenses than are families with health insurance because they are fortunate enough to be healthy or they forgo needed care. In the middle of the spectrum, the average annual out-of-pocket expense for families without health insurance is less than that of families with coverage. However, at the high end of the spectrum, families without health insurance are more likely to have health expenses that exceed 5 or 10 percent of their income than are families with health insurance. For all family types and for single adults, the burden of out-of-pocket expenditures rises as incomes fall. The burden is also greater for uninsured families with members in poorer health compared to those with better health status. More than half of all working-age adults uninsured now or in the recent past report difficulties paying medical bills, compared with less than a quarter of insured adults (Duchon et al., 2001). How do families cope with the burden of medical bills? Some families delay payment and may be dunned by collections agents. Among all working-age adults with medical bill problems, almost 60 percent are currently or were recently uninsured. Of those with severe bill problems and in those uninsured groups, two-thirds report borrowing from family or a friend and a quarter got a loan or mortgage on their home in order to pay (Duchon et al., 2001). Some families resort to declaring bankruptcy and put their future credit rating in jeopardy. Medical bills are a factor in nearly half of all bankruptcy filings. However, it is not known whether bankruptcy is more likely for uninsured families than for those with coverage. When a family is uninsured, has very limited income, and cannot pay all its medical bills, the financial burden falls on the providers of services and on the broader community, which offer various supports. These supports include charity

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Health Insurance is a Family Matter care, the use of sliding fee schedules based on family income, and the availability of safety-net providers. While uninsured families absorb more than 40 percent of the costs for their medical services on average, the proportion varies widely, depending on the type of service used. For example, prescription costs are unlikely to have subsidies or external support, and families pay 88 percent of that expense. Because of the availability of various subsidies for the care that hospitals provide uninsured people, families ultimately bear only about 7 percent of these expenses. It is difficult to determine the sources of the various supports available to those who cannot afford to pay for their care, who bears the burden financially, and whether free or reduced-cost care is fairly and equitably distributed to needy families and individuals. Some of these issues will be examined in more detail in the Committee’s following reports on community-wide effects and societal costs of uninsured populations. HEALTH INTERACTIONS WITHIN THE FAMILY The health of one member of the family can affect the health of the other members and of the unit as a whole. Particularly for children, their early development is dependent on the health and well-being of their parents. Children’s early development can have lifelong consequences for them (Shonkoff and Phillips, 2000). Public health insurance programs have expanded coverage to children, but insuring children alone may not be enough. This is because parents are a key part of the process of obtaining health care for their children. The Committee’s analyses show that in families with some members uninsured, parents are more likely than the children to lack coverage. The Committee’s previous report shows that uninsured adults are more likely to have poorer health, to receive delayed diagnoses and treatments and to die prematurely. Lowerincome parents not only are more likely to be uninsured, but also are more likely to suffer from poorer health compared with wealthier parents. This report presents evidence that parents in poorer physical or mental health have greater difficulty fulfilling their parental roles and responsibilities than do healthy parents. Studies that relate these family circumstances to insurance status do not yet exist. Family stress, found more frequently in lower-income families than in those with higher incomes, is associated with higher levels of behavioral, emotional, and physical health problems for the children. While there are many contributing factors to the level of stress within the family, uncertainty about health care may be one of them. Research to further clarify the relationships between health insurance, family health, and emotional well-being is needed. HEALTH-RELATED OUTCOMES FOR CHILDREN, PREGNANT WOMEN, AND NEWBORNS It is important to examine the relationship between the insurance status of children and pregnant women, their use of health care, and ultimately their health

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Health Insurance is a Family Matter outcomes. Uninsured families are parsimonious in their use of health services. Uninsured adults are more likely to report going without care that they feel is needed than are insured adults. Not surprisingly, delaying treatment and not using services can adversely affect health, even though they avoid costs in the short term. The Committee has reviewed the extensive body of research on the relationship between health insurance and access, use, and outcomes for children, pregnant women, and newborns and concludes that having health insurance coverage improves these health-related outcomes. This conclusion is based on both individual and population-level studies. However, insurance does not guarantee appropriate use of health services and is only one of many factors affecting health, along with poverty, diet, exercise, smoking, and other behavioral factors. Health insurance promotes children’s use of routine and appropriate care and facilitates a regular source of care, or “medical home.” Well-child care and a regular care provider are very important for monitoring childrens’ development and detecting potential problems early before they can cause long-term health consequences. Uninsured children use medical and dental services less frequently than do insured children, even after taking into account differences in family income, race and ethnicity, and health status. Children with gaps in health insurance coverage are less likely to have a regular source of care and are less likely to see a health care provider when their parents believe they need one than are children with continuous coverage. Children who are both uninsured and poor or uninsured and a member of a racial or ethnic minority or immigrant group have added difficulties in gaining access to and using primary care services. Although these factors frequently overlap, each independently adds to a child’s likelihood of reduced access and use. Uninsured children with special health needs are particularly disadvantaged since they need considerably more than routine care. Uninsured children with special health needs are less likely to have a usual source of care, less likely to have seen a doctor in the previous year, and less likely to get needed medical, mental health, dental, prescriptions, or vision care than are their insured counterparts. Adolescents as a group are particularly at risk of not having a regular source of care or any physician visits in the past year. They have the highest uninsured rate of all children even though their need for some kinds of health care services, such as mental health screening and treatment for drinking and other risky behaviors, increases in their late teenage years. Because uninsured children are more likely to receive no or delayed care, they are at greater risk of hospitalization for conditions that could have been treated on an outpatient basis. Health conditions that are readily treatable and that could affect a child’s long-term development and life chances if untreated, may be more likely to go undetected when children are not insured. Conditions such as asthma, iron deficiency anemia, and middle-ear infections, if left untreated or improperly controlled, can affect mental development and school performance, language development, and hearing. Although long-term studies linking insurance status to these conditions and later life outcomes have not been conducted, the

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Health Insurance is a Family Matter lack of routine care that would detect these conditions in uninsured children remains a concern. Being uninsured may affect the health of pregnant women, the care that they receive, and birth outcomes. Uninsured women have greater difficulty in getting the care that they believe they need than do insured women. The differences in the use of medical care between uninsured women and those who are privately insured are larger than those between uninsured and publicly insured women. Uninsured women and their newborns receive, on average, less prenatal care and fewer expensive perinatal services, such as cesarean sections. Sick newborns who are uninsured average shorter hospital stays. Uninsured newborns are more likely to have poorer health outcomes than are insured newborns, such as low birth-weight, which is a risk factor for developmental problems. Uninsured babies are also more likely to die prematurely. However, evidence of improvements in low birth-weight for newborns based on population studies of Medicaid expansions is not definitive. While uninsured women more frequently have poor outcomes during pregnancy and delivery than do insured women, insurance coverage alone may not be enough to improve maternal outcomes. CONCLUSIONS The Committee demonstrated in Coverage Matters (IOM, 2001) that the uninsured population includes people from all social and economic groups. The uninsured are, however, predominantly in working families, and two-thirds are from families that have incomes below 200 percent of the federal poverty level. Care Without Coverage (IOM, 2002a) concluded that adults without coverage do not get the care they need and are more likely to suffer poor health and premature death than are insured adults. The consequences of being uninsured are certainly significant for the individual. Now Health Insurance Is a Family Matter documents that having one or more uninsured members within the family can have adverse consequences for the whole family. The Committee concludes that the financial, physical, and emotional well-being of all members of the family may be in jeopardy if any individual within the family lacks coverage. In the United States there are more than 38 million uninsured individuals and an additional 20 million insured individuals who live in a family with one or more persons who lack health insurance. This means that approximately 58 million people, fully one-fifth of the U.S. population, is affected by lack of health insurance.

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Health Insurance is a Family Matter NOTES