AMERICA’S UNINSURED CRISIS

CONSEQUENCES FOR HEALTH AND HEALTH CARE

Committee on Health Insurance Status and Its Consequences

Board on Health Care Services

INSTITUTE OF MEDICINE OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS

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AMERICA’S UNINSURED CRISIS CONSEQUENCES FOR HEALTH AND HEALTH CARE Committee on Health Insurance Status and Its Consequences Board on Health Care Services

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THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by Contract No. 63982 between the National Academy of Sciences and the Robert Wood Johnson Foundation. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project. Library of Congress Cataloging-in-Publication Data America’s uninsured crisis : consequences for health and health care / Committee on Health Insurance Status and Its Consequences, Board on Health Care Services, Insti- tute of Medicine of the National Academies. p. ; cm. Includes bibliographical references. ISBN 978-0-309-12789-9 (pbk.) 1. Medically uninsured persons—United States. I. Institute of Medicine (U.S.). Com- mittee on the Consequences of Uninsurance. [DNLM: 1. Insurance, Health—trends—United States. 2. Medically Uninsured —United States. 3. Health Services Accessibility—economics—United States. W 250 AA1 A5125 2009] RA413.7.U53A44 2009 362.1′04250973—dc22 2009016561 Additional copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334- 3313 (in the Washington metropolitan area); Internet, http://www.nap.edu. For more information about the Institute of Medicine, visit the IOM home page at: www.iom.edu. Copyright 2009 by the National Academy of Sciences. All rights reserved. Printed in the United States of America The serpent has been a symbol of long life, healing, and knowledge among almost all cultures and religions since the beginning of recorded history. The serpent adopted as a logotype by the Institute of Medicine is a relief carving from ancient Greece, now held by the Staatliche Museen in Berlin. Suggested citation: IOM (Institute of Medicine). 2009. America’s Uninsured Crisis: Consequences for Health and Health Care. Washington, DC: The National Academies Press.

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“Knowing is not enough; we must apply. Willing is not enough; we must do.” — Goethe Advising the Nation. Improving Health.

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Acad- emy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding en- gineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineer- ing programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is presi- dent of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Insti- tute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sci- ences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Coun- cil is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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COMMITTEE ON HEALTH INSuRANCE STATuS AND ITS CONSEquENCES LAWRENCE S. LEWIN (Chair), Executive Consultant, Chevy Chase, MD JACk EbELER (Vice Chair), Consultant, Reston, VA JOHN Z. AyANIAN, Professor of Medicine and Health Care Policy, Harvard Medical School, Department of Health Care Policy, Boston, MA kATHERINE bAICkER, Professor of Health Economics, Harvard University School of Public Health, Boston, MA CHRISTINE FERguSON, Research Professor, George Washington University School of Public Health and Health Services, Washington, DC RObERT S. gALvIN, Director, Global Health, General Electric, Fairfield, CT PAuL gINSbuRg, President, Center for Studying Health System Change, Washington, DC LEON L. HALEy, JR., Deputy Senior Vice-President Medical Affairs and Chief of Emergency Medicine, Grady Health System, and Associate Professor and Vice Chair, Clinical Affairs at Grady Department of Emergency Medicine, Emory University School of Medicine, Atlanta, GA CATHERINE McLAugHLIN, Senior Fellow, Mathematica Policy Research, Inc., and Professor, Health Management and Policy, University of Michigan School of Public Health, Ann Arbor JAMES J. MONgAN, President and CEO, Partners HealthCare System, Boston, MA RObERT D. REISCHAuER, President, The Urban Institute, Washington, DC WILLIAM J. SCANLON, Senior Policy Advisor, Health Policy R&D, Oak Hill, VA ANTONIA vILLARRuEL, Professor and Associate Dean for Research at the University of Michigan School of Nursing, Ann Arbor LAWRENCE WALLACk, Dean, College of Urban and Public Affairs, Professor of Public Health, Portland State University, Portland, OR Study Staff JILL EDEN, Study Director LEA gREENSTEIN, Research Associate 

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ADAM SCHICkEDANZ, Intern (July 2008 through November 2008) JOI WASHINgTON, Senior Program Assistant (through November 2008) ASHLEy McWILLIAMS, Senior Program Assistant (November 2008 through January 2009) ALLISON McFALL, Senior Program Assistant (starting January 2009) REDA uRMANAvICIuTE, Administrative Assistant ROgER HERDMAN, Director, Board on Health Care Services Consultants EMbRy HOWELL, Principal Research Associate, The Urban Institute kERRy kEMP, Senior Editorial Consultant and Writer gENEvIEvE kENNEy, Principal Research Associate, Health Economist, The Urban Institute J. MICHAEL McWILLIAMS, Assistant Professor, Department of Health Care Policy, Harvard Medical School JOSé PAgáN, Professor, Department of Economics & Finance, University of Texas-Pan American MARk PAuLy, Bendheim Professor, Health Care Systems Department, The Wharton School University of Pennsylvania i

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Reviewers This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: gEORgES bENJAMIN, American Public Health Association SHEILA buRkE, Malcolm Weiner Center for Social Policy, John F. Kennedy School of Government, Harvard University MARSHALL H. CHIN, Department of Medicine, University of Chicago MARy SuE COLEMAN, University of Michigan SHERRy gLIED, Department of Health Policy and Management, Mailman School of Public Health, Columbia University NEAL HALFON, Center for Healthier Children, Families & Communities, University of California, Los Angeles kAREN IgNAgNI, America’s Health Insurance Plans ii

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iii AMERICA’S UNINSURED CRISIS ARTHuR L. kELLERMANN, Emory University School of Medicine ERIC b. LARSON, Group Health, Center for Health Studies MARTIN JOSE SEPuLvEDA, International Business Machines Corporation Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations nor did they see the final draft of the report before its release. The review of this report was overseen by DON EugENE DETMER, American Medical Informatics, and PATRICIA M. DANZON, Health Care Management Department, The Wharton School, University of Pennsylvania. Appointed by the National Research Council and the Institute of Medicine, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully con- sidered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

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Foreword The absence of health insurance is hazardous to your health. The Insti- tute of Medicine (IOM) reviewed these hazards in a comprehensive six-part series of reports earlier in this decade. We return now to the issue, once again with the support of the Robert Wood Johnson Foundation, because as dire as were the consequences defined in our previous work, the situa- tion is even more grim today. The costs of health care continue to escalate at rates well above wage or general economic growth and consume an ever increasing share of the American economy. As a result, health insurance becomes less affordable to a growing proportion of the population. The economy is now severely weakened, and even as the federal government takes steps to provide insurance to more children and to some who are unemployed, the gaps in health insurance in the United States call for a comprehensive solution. The IOM has long recommended systemic health reforms coupled with comprehensive health insurance. Here, we report new, rigorous, and per- suasive evidence that the lack of health insurance is injurious to health. This core finding applies to individuals of all ages. Gaining access to coverage improves health outcomes especially for those with chronic disease. Some evidence suggests that living in a community with large numbers of the uninsured may impair the quality of health care even for those individuals who have insurance. The members of the committee that produced this report are dis- tinguished individuals with diverse and pertinent expertise. Ably led by Lawrence S. Lewin, chair, and Jack Ebeler, vice chair, the committee worked diligently to critically assess the evidence about the value of health insur- ix

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x FOREWORD ance. They were assisted greatly by excellent commissioned work by Embry Howell, Genevieve Kenney, Michael McWilliams, José Pagán, and Mark Pauly, and by the dedicated support of the IOM study team led by Jill Eden. For their important contributions, we thank all these individuals. Our thanks also go to the Robert Wood Johnson Foundation for its gener- ous support. We present this report in the earnest hope that it will contribute to comprehensive health insurance coverage in a new and successful effort to reform health care in America. Harvey V. Fineberg, M.D., Ph.D. President, Institute of Medicine February 2009

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Preface Some issues, like the problems of the uninsured in the United States, are with us for so long that we end up adapting to them as a seemingly inevitable chronic condition of our health care system. We become inured to another annual report on the number of people without health insur- ance coverage, and another report on the consequences—consequences that are often obscured for many of us and easiest to ignore. And we become cynical about yet another set of recommendations, and another debate on what to do. That cycle must be broken. The lack of health insurance coverage for tens of millions of Americans cannot be ignored and should not be a chronic underpinning of American health care—it is in fact treatable and indeed preventable. The Institute of Medicine (IOM) has spoken to this issue before. From 2000 to 2004, the IOM’s Committee on the Consequences of Uninsurance issued a landmark series of six reports that reviewed and reported on the evidence on the effects of the lack of health insurance coverage. It confirmed that uninsured people, children as well as adults, suffer worse health and die sooner than those with insurance. It further identified consequences for families, communities, and the economy as a whole. The final report in the series, published in 2004, went on to set out a vision and principles for cov- erage, and made two recommendations for action: that the President and Congress develop a strategy to achieve universal coverage by 2010, and in the interim, that federal and state governments provide resources sufficient for Medicaid and State Children’s Health Insurance Program coverage. xi

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xii PREFACE As of early 2009, no action has been taken. The IOM and the Robert Wood Johnson Foundation established another IOM panel to examine this critical issue because they concluded that sole reliance on the earlier IOM series of reports on the consequences of uninsurance would not meet the needs of the public and policy makers for an informed debate in 2009 and beyond. This panel, the Committee on Health Insurance Status and Its Consequences, was charged with identifying new insights not known or appreciated in the literature since the previous reports were published. The committee found that private, employment-based coverage has continued to decline since the last report, and the number of uninsured has grown. All indicators point to a continuation of those trends, in light of health care cost growth that continues to exceed economic and wage growth, all of which is exacerbated by the economic recession the nation is now confronting. We found that the literature on health consequences is more robust than that available to the previous committee—lack of insur- ance coverage does have health consequences, and there is new literature to confirm an important but previously unanswered question: newly pro- viding coverage to the previously uninsured does in fact improve things. Communities—including the insured population—may also be vulnerable to the deleterious effects of uninsurance. Upon reviewing this evidence, we, like our predecessor committee, felt compelled to make a recommendation that is included in detail in the re- port: simply stated, we recommend with the strongest urgency we can con- vey that the President and Congress take action on coverage and costs. Given the cycle of reports and inaction noted above, we grappled with a question that will be raised by many readers: what good is another report that coverage matters, and another recommendation for action? We, like many others, searched for some way we could identify a key finding, or describe the results in such a dramatic fashion, that it would break the cycle of inaction and compel action. But there isn’t. So why report again? The committee believes that the lack of action, frustrating though it is, cannot mean that we set the issue aside—because the consequences of inaction for the health of the uninsured are real. Instead, in light of the IOM mission as advisor to the nation to improve health, we call for renewed attention to the population without health insurance. There are many reasons that this debate is complicated and difficult to resolve, with legitimate, competing arguments from political and economic perspectives about whether and how to proceed. The one argument that the committee finds has no place whatsoever in a legitimate debate about this subject is that the lack of coverage doesn’t matter for health. It does. We would like to thank our committee for its insights and deliberations

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xiii PREFACE within an unusually short time frame; the researchers and other experts whose work we used; and the staff of the Board on Health Care Services who prepared the report. Our most ardent wish is that this is the final IOM report calling for action, and that the next IOM work in this area will com- ment on the implementation of exciting new directions for the nation. Lawrence S. Lewin, Chair Jack Ebeler, Vice Chair

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Acknowledgments The committee and staff are indebted to a number of individuals and organizations for their contributions to this report. We extend thanks to the following individuals who were essential sources of information, generously giving their time and knowledge to further the committee’s efforts. Jessica S. banthin, Director of Modeling and Simulation, Center for Financing, Access and Cost Trends (CFACT), Agency for Healthcare Research and Quality (AHRQ) Robert blendon, Professor, Department of Health Policy and Management, Harvard School of Public Health and Kennedy School of Government David blumenthal, Director, Institute for Health Policy, Massachusetts General Hospital, Partners HealthCare System, Inc. Joel Cohen, Director, Division of Social and Economic Research, CFACT, AHRQ Steve Cohen, Director, CFACT, AHRQ Philip Cooper, Senior Economist, CFACT, AHRQ Peter Cunningham, Senior Health Researcher, Center for Studying Health System Change Michelle M. Doty, Director of Survey Research, The Commonwealth Fund Paul Fronstin, Senior Research Associate, Employee Benefit Research Institute x

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xi ACKNOWLEDGMENTS Elise gould, Economist, Economic Policy Institute Jack Hadley, Professor and Senior Health Services Researcher, Department of Health Administration and Policy, George Mason University Sabrina k. H. How, Senior Research Associate, The Commonwealth Fund Arthur L. kellermann, School of Medicine, Emory University Ronda kotelchuck, Executive Director, Primary Care Development Corporation Carol Meyer, Interim Chief Network Officer, Los Angeles County Department of Health Services Wilhelmine Miller, Associate Research Professor, The George Washington University School of Public Health and Health Services David M. Mirvis, Professor, Department of Preventive Medicine, University of Tennessee Health Science Center Len Nichols, Director, Health Policy Program, New America Foundation Felix L. Nuñez, Vice President of Clinical Services, Community Clinic Association of Los Angeles County Matt Rutledge, Graduate Student Instructor, University of Michigan Steven Schroeder, Distinguished Professor of Health and Health Care, Director, The Smoking Cessation Leadership Center, Department of Medicine, University of California, San Francisco kenneth Thorpe, Robert W. Woodruff Professor and Chair, Department of Health Policy Management Emory University, Rollins School of Public Health Reed Tuckson, Senior Vice President, Consumer Health and Medical Care Advancement, UnitedHealth Group Don voth, Executive Director, Memphis & Shelby County Mental Health Summit Funding for this study was provided by the Robert Wood Johnson Foundation (RWJF). The committee appreciates the opportunity and sup- port extended by RWJF for the development of this report. Andrew Hyman was a superb project officer. Finally, many within the Institute of Medicine were helpful to the study staff. The staff would especially like to thank Clyde Behney, Patrick Burke, Bronwyn Schrecker Jamrok, William McLeod, Janice Mehler, Abbey Meltzer, Lauren Tobias, and Jackie Turner.

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Contents SUMMARY 1 1 INTRODUCTION 13 Objective of the Study, 15 What Is the Purpose of Health Insurance?, 15 Previous IOM Reports on Uninsurance, 16 Scope and Methods of the Study, 18 Organization of the Report, 20 References, 21 2 CAUGHT IN A DOWNWARD SPIRAL 25 Snapshot of Trends in Health Insurance Coverage, 26 The Forces Behind the Downward Spiral in Health Insurance Coverage, 32 Limitations of the Nongroup Health Insurance Market, 37 Economic Pressures Threatening Public Coverage Expansions, 41 Conclusion, 44 References, 45 3 COVERAGE MATTERS 49 Conceptual Framework, 51 Method of the Review, 52 Findings, 57 Conclusion, 81 References, 83 xii

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xiii CONTENTS 4 COMMUNITIES AT RISK 91 Context for Assessing Community-Level Consequences of Uninsurance, 94 How the Insured Population in a Community May Be Affected by High Rates of Uninsurance, 97 Vulnerabilities in Local Health Care Delivery, 103 Conclusion, 108 References, 109 5 SUMMARY OF FINDINGS AND RECOMMENDATION 113 Committee’s Resolution and Recommendation, 114 Summary of Findings, 115 Conclusion, 117 Reference, 117 APPENDIXES A Executive Summary of the 2004 IOM Report Insuring America’s 119 Health: Principles and Recommendations B Statistics on the Nonelderly U.S. Population Without Health Insurance, 2007 135 C State Regulations Promoting Access to Individual Health Insurance Policies, 2007 139 D Recent Studies of the Impacts of Health Insurance for Children: Summary Tables 143 E Recent Studies of the Impacts of Health Insurance for Adults: Summary Table 197 F Committee Biographies 207

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List of Boxes, Figures, and Tables Summary Boxes S-1 Previous IOM Findings on the Consequences of Uninsurance, 2004, 2 S-2 Charge to the IOM Committee on Health Insurance Status and Its Consequences, 3 S-3 Key Findings on Trends in Health Insurance Coverage, 6 S-4 Key Findings on the Health Effects of Uninsurance, 8 S-5 Key Findings on the Consequences of High Community Uninsurance for People with Health Insurance, 10 Chapter 1 Boxes 1-1 The IOM’s Past Findings and Recommendations Regarding Health Insurance Coverage in the United States, 2001-2004, 17 1-2 Charge to the IOM Committee on Health Insurance Status and Its Consequences, 18 Figure 1-1 Comparison in the percentage of nonelderly adults without health insurance, by state, 1999-2000 and 2006-2007, 14 xix

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xx LIST OF BOXES, FIGURES, AND TABLES Chapter 2 Box 2-1 Estimates of the Uninsured U.S. Population from Leading Federal Surveys, 29 Figures 2-1 Percentage of U.S. children under age 18 with employment- based coverage, Medicaid or SCHIP coverage, and uninsured, 2000-2007, 27 2-2 Percentage of U.S. adults ages 18-64 with employment-based coverage, Medicaid or SCHIP coverage, and uninsured, 2000- 2007, 28 2-3 Average annual premiums for single and family employer- sponsored coverage, 1999-2008, 34 2-4 States moving toward comprehensive health care reform, 43 Tables 2-1 Number and Rate of Uninsurance Among Children and Adults, 2007, 30 2-2 Comparison of the Uninsured and General U.S. Population Under Age 65 by Selected Categories, 2005, 31 2-3 Changes in the Number and Percentage of Uninsured People in the Nonelderly U.S. Population by Age Group, 2000-2007, 34 2-4 Percentage of Private Sector U.S. Workers with Access to and Coverage by Their Employers’ Health Insurance, by Occupation, Firm Size, and Industry, 2000-2007, 38 2-5 States Expanding Publicly Subsidized Coverage to Children or Adults, 2006-2007, 42 Chapter 3 Boxes 3-1 Key Concepts in Assessing Evidence on the Health Consequences of Uninsurance, 54 3-2 Literature Search Strategy, 56 3-3 Ginny: A Girl with Special Health Care Needs Who Died When She Lost Her Health Insurance Coverage, 63 3-4 Sheila: Unable to Obtain Breast Cancer Treatment After She Lost Her Health Insurance, 78 3-5 Summary of the Evidence on the Health Effects of Uninsurance for Children and Adults, 82

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xxi LIST OF BOXES, FIGURES, AND TABLES Figure 3-1 Conceptual framework and focus of the chapter, 52 Tables 3-1 Prevalence of Serious Medical Conditions Among Uninsured Adults Ages 19-64, 2005, 64 3-2 Comparison of the Use of Health Care Services by Insured and Uninsured Adults with Serious Medical Conditions, 2005, 66 3-3 Overview of Studies of the Impact of Health Insurance on Adults’ Access to Health Care Services and Health Outcomes, 2002-2008, 70 3-4 Recent Research Findings on the Harmful Effects of Uninsurance for Adults with Selected Acute Conditions and Chronic Disease, 75 Chapter 4 Boxes 4-1 The IOM’s Previous Findings on the Community Effects of Uninsurance, 2003, 93 4-2 What Is a Community?, 94 4-3 Challenges at Grady Memorial Hospital in Atlanta, 95 4-4 Uninsurance Rates Among Communities in the 2003 Community Tracking Study (CTS), 100 4-5 Denver Hospitals Relocating to More Affluent Areas, 105 Figures 4-1 Percentage of the nonelderly U.S. population without health insurance, by county, 2005, 96 4-2 Variation in uninsurance rates among communities within Los Angeles County, 2003, 97 Table 4-1 Estimated Impact of Living in a Higher Uninsurance Community for Working-Age, Privately Insured Adults, 101

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