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America’s Uninsured Crisis: Consequences for Health and Health Care Summary1 From 2001 to 2004, the Institute of Medicine (IOM) issued a comprehensive series of six reports that reviewed and reported on the evidence on how children, adults, families, and communities are affected by the lack of health insurance.2 The committee reported that the evidence showed that not having health insurance is harmful to the health and overall well-being of both children and adults (Box S-1). In addition, the committee established principles for expanding coverage for all and recommended in the 2004 report Insuring America’s Health that the President and Congress act by 2010 to achieve universal coverage, noting: “The benefits of universal coverage would enrich all Americans, whether accounted for in terms of improved health and longer life spans, greater economic productivity, financial security, or the stabilization of communities’ health care systems.” It is now 5 years since the IOM made its recommendation, and there has still been no comprehensive national effort to achieve coverage for all Americans. In 2007, 45.7 million people in the United States—17.2 percent of the nonelderly U.S. population—were without health insurance. A severely weakened economy, rising health care and health insurance costs, growing unemployment, and declining employment-based health insurance coverage are all evidence that the U.S. health insurance system is in a state 1 This summary does not include references. Citations for the findings presented in the summary appear in the subsequent chapters of the full report. 2 For copies of the previous IOM report series on the consequences of uninsurance, please visit www.nap.edu.
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America’s Uninsured Crisis: Consequences for Health and Health Care BOX S-1 Previous IOM Findings on the Consequences of Uninsurance, 2004 The clinical literature overwhelmingly shows that uninsured people, children as well as adults, suffer worse health and die sooner than those with insurance. Families with even one member who is uninsured lose peace of mind and can become burdened with enormous medical bills. Uninsurance at the community level is associated with financial instability for health care providers and institutions, reduced hospital services and capacity, and significant cuts in public health programs, which may diminish access to certain types of care for all residents, even those who have coverage. The economic vitality of the nation is limited by productivity lost as a result of the poorer health and premature death or disability of uninsured workers. of crisis. There is no evidence to suggest that the trends driving loss of insurance coverage will reverse without concerted action. With a new administration and a new Congress in 2009, many citizens, policy makers, and opinion leaders anticipate renewed energy and interest in finding a way to reverse declines in health insurance coverage and, ultimately, to expand coverage to all in the United States. It is in this context that the Robert Wood Johnson Foundation asked the IOM to conduct the present study. In response to the Foundation’s request, the IOM appointed the Committee on Health Insurance Status and Its Consequences in April 2008. The committee’s charge was to review and evaluate the research evidence on the health and other consequences of uninsurance that has emerged since the IOM’s earlier series of reports that might help inform the health care reform efforts in 2009 (Box S-2). Whereas the previous IOM studies on uninsurance were broad and comprehensive in scope, the present study focuses more narrowly on the following critical questions: (1) What are the dynamics driving downward trends in health insurance coverage? (2) Is being uninsured harmful to the health of children and adults? (3) Are insured people affected by high rates of uninsurance in their communities? FINDINGS In executing its charge, the committee has studied the research literature since 2002 and applied rigorous scientific criteria to set the record straight on the issue of health insurance coverage. The committee reports findings in three key areas: (1) trends in health insurance coverage and forces driving
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America’s Uninsured Crisis: Consequences for Health and Health Care BOX S-2 Charge to the IOM Committee on Health Insurance Status and Its Consequences The overarching objective of this study is to help inform the health reform policy debate as it unfolds in 2009. The committee will assess the research evidence—that has emerged since the IOM’s 2001 to 2004 series of reports on uninsurance—on the consequences of uninsurance. Rather than performing a comprehensive review, the committee is charged with reviewing the literature to identify new insights not yet known or appreciated when the IOM’s earlier reports were developed. The search for new evidence will include the published literature on the consequences of uninsurance for individuals, families, communities, specific population groups, and safety net and other providers. The consequences may be related to health outcomes, such as morbidity and mortality; access to health care services; and economic impacts such as affordability of health coverage and its associated financing burden. them, (2) the health consequences of uninsurance for children and adults, and (3) the implications of high community-level rates of uninsurance on people with health insurance in those communities. The committee’s findings are summarized below. Caught in a Downward Spiral: Health Insurance Coverage Is Declining and Will Continue to Decline The fear of being without health insurance coverage is a growing strain on American families’ sense of health and well-being. Concerns about losing health insurance coverage are well founded. In 2007, 5.9 million more people were uninsured than when the IOM issued its initial report on uninsurance. The uninsured included 8.1 million children and 36.8 million adults ages 18 to 64. In 2007, nearly 1 in 10 children and 1 in 5 nonelderly adults in the United States were without health insurance.3 Over the last decade, health insurance coverage has declined and will continue to decline. The cost of health care is driving the downward trend in both the private and public sectors. Health care costs and insurance premiums are growing at rates greater than the U.S. economy and family incomes. From 2001 to 2006, U.S. per capita health care spending grew by 47 percent compared to the 34 percent increase in gross domestic prod- 3 The vast majority of the population age 65 and older has health insurance coverage through Medicare or other sources. For that reason, this study focuses on uninsurance among children and nonelderly adults.
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America’s Uninsured Crisis: Consequences for Health and Health Care uct. This trend shows no signs of abating. According to the Centers for Medicare & Medicaid Services, total U.S. health care spending may nearly double between 2008 and 2017. The rapid growth in health care costs is making it increasingly difficult for U.S. employers to offer health insurance coverage to their workers. In addition, many employers have replaced permanent, full-time jobs with contract, part-time, and temporary positions that do not come with health benefits. And, early retirees are less likely to be offered retiree health insurance benefits than in the past. Furthermore, even when employers are able to offer health insurance to their employees, increasing numbers of employees are declining these offers because they cannot afford the premiums. Between 1999 and 2008, the average annual employee premium contribution for family coverage rose from $1,543 to $3,354, far outpacing the growth in family incomes. High premium costs are especially burdensome to lower wage workers, who are finding it more and more difficult to take up offers of coverage from their employers. Individuals without employer-sponsored health insurance who are not eligible for public insurance must rely on a limited nongroup health insurance market to obtain coverage. The premium costs for nongroup coverage can be exceedingly high and individual subscribers must pay the entire cost without a contribution from an employer. In most states, the insurer may deny coverage completely, impose either a permanent or temporary preexisting condition limitation on coverage, or charge a higher premium based on health status, occupation, and other personal characteristics. Some state and federal regulations have been put in place to help promote access to nongroup coverage, but current data limitations frustrate research that might illuminate the impact of the regulations. It is possible that additional millions of low-income Americans would be uninsured today were it not for recent state and federal efforts to expand coverage. States and the federal government have substantially increased health coverage among low-income children and, to a lesser degree, among adults in the last decade, by expanding eligibility, conducting outreach to people already eligible, and expediting enrollment in Medicaid and State Children’s Health Insurance Program (SCHIP) programs. Given the severity of the current economic crisis, however, some states will be unable to sustain these expansions—just at the time that increasing numbers of Americans are losing their jobs, their employer-sponsored health coverage, or both. The committee’s key findings on recent trends in health insurance coverage are summarized in Box S-3. In sum, health insurance coverage in the United States is declining and the situation will get worse. The crisis is
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America’s Uninsured Crisis: Consequences for Health and Health Care engulfing employer-sponsored insurance, the cornerstone of private health coverage, and also threatens expansions in public coverage. Coverage Matters: Health Insurance Is Integral to Personal Well-Being and Health4 When policy makers and researchers consider potential solutions to the problem of uninsurance in the United States, the question of whether health insurance matters to health is often an issue. This question is far more than an academic concern. It is crucial that U.S. health care policy be informed with current and valid evidence on the consequences of uninsurance for health care and health outcomes, especially for the 45.7 million individuals without health insurance. The committee found that the new research evidence on the consequences of health insurance for children and adults is of higher quality and stronger than ever before. This robust body of evidence demonstrates substantial health benefits of health insurance coverage. Important insights into how children benefit when they acquire health insurance are provided by well-designed evaluations of enrollment in Medicaid and SCHIP programs. With health insurance, it is clear that children gain access to a usual source of care; well-child care and immunizations to prevent future illness and monitor developmental milestones; prescription medications; appropriate care for asthma; and basic dental services. With health insurance, serious childhood health problems are more likely to be identified early, and children with special health care needs are more likely to have access to specialists. With health insurance, children have fewer avoidable hospitalizations, improved asthma outcomes, and fewer missed days of school. For adults, there are serious harms and sometimes grave consequences to being without health insurance. Men and women without insurance are much less likely to receive clinical preventive services that have the potential to reduce unnecessary morbidity and premature death. Chronically ill adults delay or forgo visits with physicians and clinically effective therapies, including prescription medications. Uninsured adults are more likely to be diagnosed with later stage cancers that are detectable by preventive screening or by contact with a clinician who can assess worrisome symptoms. Without health insurance, adults are more likely to die from trauma 4 The findings on the health consequences of uninsurance are based on two background papers commissioned by the IOM committee: (1) Health Consequences of Uninsurance Among Adults in the United States: An Update by J. Michael McWilliams, M.D., Ph.D., Harvard Medical School, and (2) Health and Access Consequences of Uninsurance Among Children in the United States: An Update by Genevieve M. Kenney, Ph.D., and Embry Howell, Ph.D., The Urban Institute.
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America’s Uninsured Crisis: Consequences for Health and Health Care BOX S-3 Key Findings on Trends in Health Insurance Coverage Health insurance coverage has declined over the last decade despite increases in public program coverage and will continue to decline. There is no evidence to suggest that the trends driving loss of insurance coverage will reverse without concerted action. High and rising health care costs threaten not only employer-sponsored coverage, but also recent expansions in public coverage. Private Health Insurance The rising cost of health care is driving the decline in private health insurance coverage. Health care costs and insurance premiums are growing substantially faster than the economy and family incomes. As the costs of health care increase, the importance and value of coverage increases for individuals, while at the same time it becomes less affordable. Employment has shifted away from industries with traditionally high rates of coverage to jobs with historically lower rates of coverage. In some industries, employers have relied more heavily on jobs without health benefits, such as part-time and shorter-term employment and contract and temporary jobs. Fewer workers, particularly among those with lower wages, are being offered employer-sponsored coverage and fewer among them can afford the premiums. And, early retirees are less likely to be offered retiree health insurance benefits than in the past. Nongroup Insurance For many without employer-sponsored group coverage, nongroup health insurance coverage is prohibitively expensive or unavailable. Access to nongroup coverage is highly dependent on individual circumstances and geographic location. People with preexisting health conditions who lose employer-sponsored insurance face significant barriers to coverage, including unaffordable premiums. Public Health Insurance Long-term fiscal pressures on the federal budget threaten to undermine bedrock state and federal health care programs. With a severely weakened economy and rising health care costs, some states will not be able to sustain their recent expansions of public programs for low-income children and adults. Increases in unemployment will further fuel the decline in the number of people with employer-sponsored coverage and put additional stress on state Medicaid and SCHIP programs.
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America’s Uninsured Crisis: Consequences for Health and Health Care or other serious acute conditions, such as heart attacks or strokes. Adults with cancer, cardiovascular disease, serious injury, stroke, respiratory failure, chronic obstructive pulmonary disease or asthma exacerbation, hip fracture, seizures, and serious injury are more likely to suffer poorer health outcomes, greater limitations in quality of life, and premature death if they lack health insurance. New evidence demonstrates that gaining health insurance ameliorates many of these problems. The committee’s key findings on the health consequences of uninsurance are summarized in Box S-4. In sum, despite the availability of some safety net services, there is a chasm between health care needs and access to effective health care services for uninsured children and adults. Health insurance coverage in the United States is integral to individuals’ personal well-being and health. Communities at Risk: High Levels of Uninsurance in Communities May Undermine Health Care for the Insured Population Many of America’s towns and cities have high concentrations of children and adults under age 65 who lack health insurance. Thus, the question arises: What are the implications of high rates of uninsurance for affected communities and for insured people in those communities?5 It has been estimated that the annual cost of health services provided to uninsured people in the United States will total about $86 billion in 2008. Uninsured patients will pay approximately $30 billion for these services out of pocket and receive the other $56 billion worth of services as uncompensated care.6 An estimated $43 billion (75 percent) of the $56 billion will be covered through various government subsidies. But government subsidies for uncompensated care are not necessarily distributed to health care providers in proportion to the uncompensated care they provide. Many hospitals and other local providers bear a disproportionate and substantial financial burden. The extent to which hospitals’ unreimbursed costs are absorbed by hospitals or passed on in the form of higher charges to insured patients (as many believe to be the case) has not been adequately documented and should be the subject of further research. There are stark differences in uninsurance rates across states, counties, and even zip codes within counties. Yet the problem of uninsurance may not affect all communities in the same way, even when rates of uninsurance are comparable. The dynamics are complex and not well understood. When a community has a high rate of uninsurance and subsidies fall short 5 In the discussion in this report, the term community refers to a group of people who (1) live in a particular geographic area, and (2) have access to a common set of health resources. 6 Uncompensated care is defined as all care not paid for out of pocket by the uninsured.
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America’s Uninsured Crisis: Consequences for Health and Health Care BOX S-4 Key Findings on the Health Effects of Uninsurance Children benefit considerably from health insurance, as demonstrated by recent evaluations of enrollment in Medicaid and SCHIP programs: When previously uninsured children acquire insurance, their access to health care services, including ambulatory care, preventive health care (e.g., immunizations), prescription medications, and dental care improves. When previously uninsured children who are well or have special health needs acquire insurance, they are less likely to experience unmet health care needs. Uninsured children with special health care needs are much more likely to have an unmet health need than their counterparts with insurance. When previously uninsured children acquire insurance, they receive more timely diagnosis of serious health conditions, experience fewer avoidable hospitalizations, have improved asthma outcomes, and miss fewer days of school. Adults benefit substantially from health insurance for preventive care when they are well and for early diagnosis and treatment when they are sick or injured: Without health insurance, men and women are less likely to receive effective clinical preventive services. Without health insurance, chronically ill adults are much more likely to delay or forgo needed health care and medications. Without health insurance, adults with cardiovascular disease or cardiac risk factors are less likely to be aware of their conditions, their conditions are less likely to be well controlled, and they experience worse health outcomes. Without health insurance, adults are more likely to be diagnosed with later-stage breast, colorectal, or other cancers that are detectable by screening or symptom assessment by a clinician. As a consequence, when uninsured adults are diagnosed with such cancers, they are more likely to die or suffer poorer health outcomes. Without health insurance, adults with serious conditions, such as cardiovascular disease or trauma, have higher mortality. The benefits of health insurance have been clearly demonstrated through recent studies of the experiences of previously uninsured adults after they acquire Medicare coverage at age 65. These studies demonstrate when previously uninsured adults gain Medicare coverage: Their access to physician services and hospital care, particularly for adults with cardiovascular disease or diabetes, improves. Their use of effective clinical preventive services increases. They experience substantially improved trends in health and functional status. Their risk of death when hospitalized for serious conditions declines.
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America’s Uninsured Crisis: Consequences for Health and Health Care of costs, the financial impact on providers may be large enough to affect the availability and quality of local health care services for everyone, even for the people who have health insurance. Recent empirical analyses of the spillover effects of community uninsurance, including a study commissioned by the committee,7 suggest that when local rates of uninsurance are relatively high, insured adults are more likely to have difficulties obtaining needed health care and physicians may be more likely to believe that they are unable to make clinical decisions in the best interest of the patient without losing income. The specific contribution of uninsurance to these problems is not known, but widespread problems in health care delivery in local communities, including disparities in the supply of physician services and other health care resources, may be exacerbated by the burden of uninsurance and have potentially grave implications for the quality and timeliness of care not only for people who lack health insurance, but also for people who have health insurance in those communities. The committee’s key findings on the community-level consequences of uninsurance are summarized in Box S-5. In sum, local health care delivery appears to be vulnerable to the financial pressures associated with high community-level uninsurance rates. Analyses commissioned by the committee and other recent research strongly suggest that when community-level uninsurance rates are relatively high, insured adults are more likely to have difficulties obtaining needed health care. RECOMMENDATION OF THE COMMITTEE The committee’s findings demonstrate that the body of evidence on the health consequences of health insurance is stronger than ever before. There is a compelling case for urgent action. Simply stated: health insurance coverage matters. Expanding health coverage to all Americans is essential and should be done as quickly as possible. The President, Congress, and other leaders in the public and private sectors should act immediately to ensure that all individuals have health insurance. Without such action, preventable suffering due to the lack of health insurance promises to get worse rather than better. The committee recommends that the President work with Congress and other public and private sector leaders on an urgent basis to achieve 7 Mark Pauly, Ph.D., and José Pagán, Ph.D., conducted original analyses of the effects of uninsurance on privately insured persons and local communities at the committee’s request. The complete text of the commissioned analysis is available on the IOM website for the Health Insurance Status and Its Consequences project at http://www.iom.edu/CMS/3809/54070.aspx.
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America’s Uninsured Crisis: Consequences for Health and Health Care BOX S-5 Key Findings on the Consequences of High Community Uninsurance for People with Health Insurance Local health care delivery appears to be vulnerable to the financial pressures associated with higher uninsurance. Analyses commissioned by the committee and other recent research strongly suggest that when community-level uninsurance rates are relatively high, insured adults are more likely to have difficulties obtaining needed health care and physicians are more likely to believe that they are unable to make clinical decisions in the best interest of the patient without losing income. The empirical evidence indicates that higher community uninsurance is negatively associated with several well-validated indicators of access to and satisfaction with health care for privately insured adults, including: Having a place to go when sick, having a doctor’s visit, visiting a doctor for routine preventive care, and seeing a specialist when needed. Satisfaction with the choice of primary care physician, being very satisfied with health care received during the last 12 months, trust that one’s doctors put medical needs above all other considerations, and being very satisfied with the choice of specialist. The Center for Studying Health System Change has documented growing economic disparities among U.S. communities with respect to geographic distribution of health care services, including new diagnostic and therapeutic techniques and technologies. The precise contribution of uninsurance to this dynamic is neither well understood nor readily measured. However, widespread problems in local health care delivery—not necessarily attributable to uninsurance—can be intensified by higher uninsurance rates. For example: Providers and capital investment tend to locate in well-insured areas (and away from communities with high uninsurance). It is common for hospitals and clinics to focus major investments in more affluent locations with well-insured populations. Newer facilities with the most up-to-date technologies are a magnet for physician and other health care providers—this poses additional obstacles for financially stressed hospitals trying to recruit on-call specialists in high uninsurance areas. A number of hospital-based emergency care problems have serious implications for the quality and timeliness of care for insured as well as uninsured patients, including limits on inpatient bed capacity, outpatient emergency services, and timeliness of trauma care.
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America’s Uninsured Crisis: Consequences for Health and Health Care health insurance coverage for everyone and, in order to make that coverage sustainable, to reduce the costs of health care and the rate of increase in per capita health care spending. There always has been, and will continue to be, uncertainty and disagreement about the best way to address major issues of public policy. The issue of cost, in particular, is daunting. But the nation has successfully addressed other complex issues that are intertwined with deeply held interests and ideologies. There is never a perfect opportunity for reform. This is the time to act, emboldened by the knowledge and compassion of a society that truly cares about its members and that has a history of tackling difficult problems. Paying for health insurance coverage for all Americans will be expensive. The committee believes that steps to reduce the costs of health care and the rate of increase in per capita health care spending are of paramount importance if coverage for all is to be achieved and sustained. The committee does not believe that action should be delayed pending the development of a long-term solution to curbing underlying health care costs. Given the demonstrated harms of not having health insurance for children and adults, the committee believes that action to achieve coverage for all should proceed immediately, coupled with concerted attention to the long-term underlying trends in health care costs to assure sustainability of the system for all. Health insurance coverage is integral to personal well-being and health. Despite the availability of some safety net services, there is a chasm between health care needs and access to effective health care services for uninsured children, adolescents, and adults. The committee agrees with the conclusion of our colleagues in the 2004 IOM report Insuring America’s Health: “…health insurance contributes essentially to obtaining the kind and quality of health care that can express the equality and dignity of every person. Unless we can ensure coverage for all, we fail as a nation to deliver the great promise of our health care system, as well as of the values we live by as a society. It is time for our nation to extend coverage to everyone.”
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