Americans health insurance coverage 1980-91

by Katharine R Levit Gary L Olin andSuzanne W Letsch

The authors ofthis article have used Current Population Surveys to summarize public and private health insurance trends in the United States over the last 12 years Key findings include the declining percentage ofthe nonmiddotelderly population with employer-sponsored coverage and increasing numbers oflow- and middle-

income uninsured That is in a period offast-rising health care costs the poor and the near-poor in working families have been losing coveragefor health care and facing increasing risks of inadequate care and financial loss These data highlight health care access and financing problems now facing the Nation

Highlights

This article provides an overview of trends in public and private health insurance coverage over the last decade with special emphasis on age income employment and regional characteristics of insured and uninsured populations Our data source the March Current Population Survey (CPS) by the US Bureau of the Census contains information on health insurance coverage for the non-institutionalized population These data are frequently cited in discussions of the size of the uninsured population in the United States but they are rarely used to show trends in insurance coverage such as those the United States has experienced over the last 12 years Key findings include

bull Income is the single most important factor in a nonshyelderly familys decision to purchase health insurance From the 1980 to the 1991 CPS the percent of the non-elderly population in poverty increased and the percent with insurance coverage decreased

bull For the elderly income in relation to the poverty level rose with a substantially larger proportion of the elderly in the highest income category For the elderly income did not significantly affect insurance coverage and the likelihood of being uninsured was low regardless of income level

bull The data confirm that children in families with incomes slightly above the Federal poverty level fell through the Medicaid safety net more often than did children in families that were poor Children in the near-poor income group were most likely of all income groups to be uninsured

bull Holding a full-time job for the entire year did not guarantee health insurance coverage In the 1991 CPS 187 million members of families headed by full-time full-year workers were uninsured up 181 percent from levels reported in the 1988 CPS In contrast the total number of uninsured persons increased 119 percent from 1988 to 1991 indicating that relatively more full-time full-year workers were becoming uninsured

bull From CPS survey years 1988 to 1991 industrial composition of the United States shifted toward service industries in which the provision of employer-

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sponsored insurance is less likely to be found Simultaneously the percentage of workers offered andor able to afford insurance through their employment declined in almost every industrial sector Together these industry changes produced a 5-percent decline in the number of workers owning coverage through employment compared with those who would have owned policies in the absence of those shifts

bull Selected industries subsidized the provision of employer-sponsored health insurance to workers in other sectors by providing dependent coverage to employees in other industries Sectors such as mining manufacturing and transportation communications and public utilities were found to cross-subsidize industries such as agriculture forestry and fisheries construction retail trade services and the self-employed

bull Large regional differences exist in the percentage of the population that is uninsured In 199190 percent of the population in New England lacked health insurance coverage while more than twice that percentage were uninsured in the West South Central States

Background

Since at least 1980 the United States has faced the twin problems of increasing numbers of uninsured and rising health costs The problems are closely intertwined Options for covering growing numbers of uninsured have become an increasingly important issue to policymakers and individuals as health costs have grown rapidly over the last decade and are projected to continue rising in the foreseeable future These costs consume a large share of the Nations outputshy122 percent of gross national product in calendar year 1990 (Levit et al 1991)-and limit national expenditures on other goods The uninsured are affected because lack of health insurance may create a financial barrier to health care-more than 34 million individuals were without insurance in the 1991 CPS Costs also affect the insured because health insurance for a vast majority of the non-elderly-63 percent in the 1991 CPS-is closely tied to employment and rising employer-sponsored private health insurance costs (Levit and Cowan 1991) have the potential to reduce the size of wages and other fringe benefits For other insured continually rising costs may make insurance

Health Care FloaocDJ ReviewFall 1992Volume 14 Number l 31

unaffordable forcing them into the ranks of the uninsured

Issues such as these are creating national debate about the state of the Nations health care system and are producing wide-ranging proposals for access and financing reform The data presented in this article identify trends and potential problem areas that should be considered in developing solutions to health care access and financing problems

Current Population Survey

For the past 50 years the US Bureau of the Census has conducted the CPS each month to collect statistics on employment and unemployment for the Nation The surveyed population is constructed as a national probability sample of approximately 57000 households covering 158000 non-institutionalized persons in 1991 Households interviewed are selected on the basis of residence to represent the Nation as a whole individual States and other specified areas (US Bureau of the Census 1985 1991)

The survey asks extensive questions about occupation industry work hours hourly earnings income family structure education and a variety of demographic characteristics In addition the March supplement annually queries people about their health insurance coverage Because of the CPS strength in describing work force characteristics it is one of the best sources for identifying work-related characteristics of the owner of an employer-sponsored group health insurance policy as well as of uninsured workers

The CPS health insurance questions generally solicit information on the same categories of health insurance over time However changes in the questionnaire and in imputation and processing techniques had an impact on responses collected in specific years The most significant changes in private health insurance questions introduced in the 1988 CPS produced inconsistencies in trends of insurance coverage infonnation available from the CPS Awareness of these changes which are described later allows the analyst to appropriately extract and use trends in insurance sources and coverage over time

The 1988 revisions to the CPS questions primarily affected the comprehensiveness of information on plan owners and sources of insurance coverage for children young adults and retirees in several ways First policy owners were asked about only one health insurance plan even though they could own two or more plans This made counts of private health insurance policies owned by individuals less complete than in earlier years

Second more employer-sponsored plans were identified beginning with the 1988 CPS because all adults age 15 years or over rather than only employed persons were asked about employer-sponsored health insurance plans This change identified coverage through former employers for persons owning retirement health insurance coverage and their dependents or for other non-workers and their dependents with extended coverage for separated employees

Third by asking all persons 15 years of age or over about health insurance coverage additional adult dependents (primarily age 22 or over) could identify coverage Prior to 1988 this group would only be asked if they were policy owners and who was covered by their policies they could not directly identify themselves as a covered dependent Persons in this group would also not be assigned coverage as a dependent child because the US Bureau of the Census imputation rules did not pennit CPS to show coverage of children age 22 or over

Fourth information on the insurance coverage of children under 15 years of age became more comprehensive by adding questions about outsideshyhousehold sources of insurance coverage for this age group The survey directly solicited information on insurance coverage and ownership from persons age 15 years or over but used rules to impute insurance coverage for children and other dependents based on broad responses concerning who was covered If a policy owner indicated that his or her insurance plan covered children for example the US Bureau of the Census imputed coverage to all never-married children under age 22 even though some of them were working and covered under their own policies or were uninsured Beginning in the 1988 CPS direct questions about childrens insurance coverage were used to augment imputed coverage information Additional cover sheet questions directly solicited childrens Medicaid and other (non-employer-sponsored) private health insurance coverage independent of adult coverage In this article children identified as a result of these questions as having coverage are referred to as cover sheet children because responses indicating their coverage were recorded on the survey cover sheet

Fifth the US Bureau of the Census instituted weighting programming and processing improvements to coincide with these major questionnaire changes

In addition to the changes made beginning in 1988 the omission of certain questions in the 1981 questionnaire affected the availability of other (nonshyemployer) private insurance information This omission influenced tabulated counts of private health insurance coverage and the counts of the uninsured

Despite these data inconsistencies valuable information about insurance trends can be extracted For some insurance source and coverage time series data are separated into two time periods 1980-87 and 1988-91 to take advantage of more comprehensive data available after the major survey changes in 1988 However data are also presented for 1980-91 without the addition of cover sheet children Examining data without cover sheet children removes some but not all of the inconsistencies that occurred between the 1987 and 1988 CPS and provides a broad indication of cumulative growth from 1980 to 1991

The March CPS questionnaire requests insurance coverage and ownership information for the year prior to the one in which the survey was conducted Analysts who use CPS information disagree as to whether responses reflect insurance status during the previous year as requested or the current year (Swartz 1986

Health care Financing ReviewFaD 1992vruume 14 Number 1 32

Kronick 1991 ) To avoid confusion in the presentation of our data the year given refers to the CPS survey year except when noted and reflects responses to questions on the March survey supplement

Sources of insurance

In the CPS respondents may specify insurance coverage through private health insurance or one of three public programs Medicare Medicaid or coverage for current or former military personnel and dependents Tabulations from the 1991 CPS show that 214 million persons or 861 percent of all Americans

were covered by some form of public or private insurance (Table 1) Almost three-quarters of the population obtained coverage through private insurance and one-quarter through public programs The publicly and privately insured groups overlapped for 116 percent of the population Almost three-quarters of these overlaps were Medicare enrollees who also had some form of private health insurance coverage The remaining 139 percent of the population lacked insurance from any source

Over the past 12 years changes in the CPS questionnaire produced discontinuities in counts of persons covered by some sources as just described

Table 1

Sources of health insurance coverage and percent distribution United States 1980-91 Number of persons in thousands insured by Total persons in thousands insured by1

Private Private health Public insurance

Total uninsured Private

3 Public programs

Survey year

Populatlon2

in thousands All insurance programs and public

sources only only programs

thousands

health insurance4 Total CHAMPUS5

Including cover sheet children6

1991 248886 214167 153202 32031 28933 34719 182135 60965 9922 1990 246191 212807 155425 29197 28185 33385 183610 57382 9870 1989 243685 211005 154155 28986 27864 32680 182019 56850 10105 1988 241187 210161 153879 28001 28282 31026 182160 56282 10542

Excluding cover sheet children6

1991 248886 209257 150181 32301 26774 39629 176956 59076 9922 1990 246191 208145 152325 29846 25974 38047 178298 55820 9870 1989 243685 206855 151290 29669 25896 36830 177186 55565 10105 1988 241187 206364 151295 28586 26483 34823 177779 55069 10542 1987 238789 201432 146807 30995 23630 37357 170436 54625 9982 1986 236749 199569 145444 31070 23055 37180 168499 54125 10471 1985 234066 197011 143989 30981 22041 37055 166030 53022 9756 1984 231852 196527 144431 30476 21620 35325 166051 52095 9561 1983 229587 196591 144788 30558 21244 32996 166033 51802 9992 1982 227375 196400 144333 30169 21898 30974 166231 52067 10453 1981 225242 NA NA NA NA NA NA 48678 8468 1980 223160 192666 145744 27986 18956 30474 164700 46942 7931

Percent distribution including cover sheet childrene

1991 1000 861 616 129 116 139 732 245 40 1990 1000 864 631 119 114 136 746 233 40 1989 1000 866 633 119 114 134 747 233 41 1988 1000 871 636 116 117 129 755 233 44

Percent distribution excluding cover sheet children6

1991 1000 841 603 130 108 159 711 237 40 1990 1000 845 619 121 106 155 724 227 40 1989 1000 849 621 122 106 151 727 228 41 1988 1000 856 627 119 110 144 737 228 44 1987 1000 844 615 130 99 156 714 229 42 1986 1000 843 614 131 97 157 712 229 44 1985 1000 842 615 132 94 158 709 227 42 1984 1000 848 623 131 93 152 716 225 41 1983 1000 856 631 133 93 144 723 226 44 1982 1000 864 635 133 96 136 731 229 46 1981 1000 NA NA NA NA NA NA 217 38 1980 1000 863 653 125 85 137 738 210 36 11ncluded in other columns in this table 2civ111an non-Institutionalized population in the United States and military personr~el tivirlQ outside military bases or on military bases with their families SCalculated by summing Public programs only and Private insurance and public programs 4Calculated by summing Private health insurarlCE only and Private health lnsurarlCE and public programs 5civllian Health and Medical Program of the Uniformed SeiVices Gnd other programs covering current and former military personnel and their dependents 6tn the 1988-91 surveys additional questions corllteming health insurance status ol children were asked This set of questions is referred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

NOTES Public programs indicate coverage by Medicare Medicaid andfor CHAMP US NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Population Survey 1960-91 tabulations prepared by Fu Associates Ltd for the Health Care Rnancing Administration Office of the Actuary

Health Care Financlnamp ReviewFalll992Volume14 Number 1 33

The most significant changes middotoccurred between the 1987 and 1988 versions of the survey These survey improvements minimized the magnitude of change in the proportion of the population with and without health insurance coverage as recorded in the 1980-91 surveys If the survey had been more consistent over time the trends would likely have been more pronounced than those reported here

The percent of Americans covered by private health insurance declined from 1980 to 1991 Because of discontinuities in the CPS time series we separate this time span into two periods 1980 through 1987 and 1988 through 1991 Despite a gain of 57 million persons covered by private health insurance during the first period the proportion of the population with private coverage declined from 738 to 714 percent The cumulative growth of 35 percent in private insurance coverage did not keep pace with the population increase of 70 percent

During the first period the Nation was emerging from recession The economy was recovering from a bout with general price inflation in 1980 and 1981 and continued price inflation for medical care that extended into 1983 (Donham Maple and Levit 1992) which affected business ability to provide increasingly expensive health benefits for workers (Kronick 1991) The industrial composition in the country was also changing rapidly with more jobs shifting from highshybenefit industries such as manufacturing to the service sector which is characterized by lower benefits The recession decreased the demand for labor particularly for factory workers as many businesses eliminated excess jobs Labor unions had little choice but to accept benefit and wage compromises (Plunkert 1990) Because most Americans received private coverage through employment these events reduced private health insurance coverage during the first half of the 1980s The proportion of Americans with private coverage reached a low of 709 percent in the 1985 CPS

From 1988 through 1991 the number of persons with private coverage remained fairly stable (using data including cover sheet children) despite population growth of 32 percent This produced a decline of 23 percentage points in the share of Americans with private coverage In the 1991 CPS alone the portion of the population with private coverage fell 14 percentage points-amounting to a loss in coverage for 33 million persons who would have received coverage had the share remained stable Based on the 1991 CPS the current recession appeared to have a similar impact on private health insurance coverage as it did in the early 1980s The extent of the impact will be more fully reported in the 1992 CPS

In these tabulations we report public program coverage defined as coverage through Medicare Medicaid or military and veterans programs From 1980 through 1982 public program coverage increased coinciding with the recession in the early 1980s that fostered rising unemployment and loss of private ~mployer-sponsored coverage Throughout the middle of the decade public programs covered a stable portion of the population-from 225 to 229 percent The

1991 CPS reports a larger proportion of the population covered by public programs than ever before The share increased 12 percentage points from 1990 through 1991 (including cover sheet children) because of major expansions in the Medicaid program

During the 1980-91 period the number of uninsured persons grew by 30 percent (excluding cover sheet children) while the population grew only It S percent For 1988 through 1991 alone the number of uninsured increased 119 percent (including cover sheet children) compared with population growth of 32 percent In 1991 139 percent of the population lacked any form of public or private coverage 1 percentage point more than in 1988 (including cover sheet children)

In summary the past 12 years of CPS data depict gradual changes in the health insurance structure in this Nation Although the number of persons covered by private health insurance increased it increased more slowly than the population Public programs particularly Medicare and Medicaid covered an increasing proportion of the population but failed to offset the decline in the population share covered from private sources This resulted in a rising proportion of the population without health insurance coverage a proportion that rose 22 percentage points over the last 12 years (excluding cover sheet children) and 10 percentage point in the last 4 years (including cover sheet children)

Coverage for aged and non-aged

The aged (persons 65 years of age or over) and nonshyaged populations have distinctly different sources of health insurance coverage The non-aged population traditionally received coverage through private health insurance (738 percent in the 1991 CPS including cover sheet children) while public programs provided only a small portion (146 percent) of coverage (derived from Table 2) Only 42 percent of the non-aged population received coverage from both public and private sources in the 1991 CPS mostly through private health insurance in combination with CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) or Medicaid Most of the uninsured population are non-aged because Medicare almost universally covers the aged

For the aged population health insurance coverage was obtained predominantly through a combination of public and private programs with 960 percent reporting coverage by public programs In the 1991 CPS 653 percent of the aged had both public and private coverage of these almost all had Medicare supplemented by a private health insurance policy Public programs alone (usually Medicare alone or in combination with other public programs such as Medicaid) covered 307 percent of the aged population (Table 3) Less than I percent of all persons age 65 years or over could not identify any form of health insurance coverage on the CPS

Citing the same caveats as for Table 1 that minimize the trends the 1980-91 surveys record a distinct loss in the share of the non-aged population covered by private

Healtb Care Fl~taltcinamp Re11iewFa111992Volume 14 Number 1 34

Table 2 Percent distribution of aged and non-aged Insured persons by source of Insurance and percent of

persons uninsured United States 1980middot91 Percent distribution of persons insured by

Percent of Private insurance Survey Population1 All Private health Public and public year in thousands sources insurance only programs only programs uninsured

Non-aged2 persons Including cover sheet children3

1991 218793 843 696 104 42 157 1990 216625 847 713 92 42 153 1969 214663 849 714 94 42 151 1988 212700 856 720 94 42 144

Nonmiddotaged2 persons excluding cover sheet chitdren3

1991 218793 820 682 105 33 180 1990 216625 826 699 95 32 174 1989 214663 830 701 97 32 170 1988 212700 838 708 97 33 162 1987 210814 824 693 97 34 176 1986 209427 824 692 98 34 176 1985 207248 822 691 97 34 178 1984 205561 830 699 97 33 170 1983 203849 840 707 96 37 160 1982 202143 848 711 93 44 152 1981 200556 NA NA NA NA NA 1960 198966 851 727 87 37 149

Persons 65 years of age or over 1991 30093 991 31 307 653 09 1960 29566 990 31 313 645 10 1989 29022 991 32 307 652 09 1988 28487 989 26 263 680 11 1987 27975 989 24 376 569 11 1986 27322 990 23 363 564 10 1985 26818 990 26 402 562 10 1984 26291 989 26 401 562 11 1983 25738 967 26 429 533 13 1982 25231 969 24 448 517 11 1981 24886 NA NA NA NA NA 1960 24194 966 47 441 477 34 1CMIIan nonmiddotinstilulionalized population in the United States and military personnalliving outside military bases or on military bases with their families 2persons 0-64 years of age 3tn the 1986-91 surveys additional questions concaming health insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to thEIIOe questions resulted in additional children being assigned health insurartee coverage

NOTES PUbliC programs indicate coverage by Medicare Medicaid andor CHAMPUS NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Cummt Population SuiYEiy 1980-91 tabulations prepared by Fu Associates Ltd lot the Health Cere Financing AdminiSifation Office of the Actuary

health insurance Public programs picked up some of this loss over the time span but not enough to prevent the growth of the share of the non-aged population without any coverage The share of the non-aged population without coverage increased by 27 percentage points (excluding cover sheet children) from 1980 to 1987 and by 13 percentage points (including cover sheet children from 1988 to 1991

For the aged population the 19821 through 1991 CPS results showed little change in the share of the population insured and uninsured Virtually all elderly persons received coverage through Medicare The proportion of aged persons supplementing their Medicare coverage with independently purchased

11980 data are not used because the CPS Medicare population increased by almost twice the number of persons from 1980 to 1982 as indicated by program data Part of the explanation for this difference may be linked to changes in the weighting process in the 1982 CPS These changes included the introduction of independent race category controls and of the 1980 census population weights

private health insurance also appeared to grow from the 1980 through 1987 CPS years This proportion has remained stable for 1989-91

In the 1991 CPS 132 percent of the population was covered by more than one type of insurance that is by private insurance Medicare Medicaid or CHAMPUS (derived from Table 3) Multiple coverage was more prevalent for the elderly with 734 percent of that cohort receiving coverage from two or more of these sources For the non-elderly population only 49 percent received coverage from more than one source usually private health insurance in combination with CHAMPUS or Medicaid Elderly persons had Medicare and private health insurance coverage most often (615 percent ofthls population) followed by Medicare and Medicaid (66 percent of the population)(Most persons covered by Medicare and Medicaid are institutionalized and therefore are not included in the CPS)

Health Care Financiq ReviewFaD 1992volume 14 Number 1 35

Table 3 Number and percent distribution of persons covered by insurance by age and type of coverage

United States 1991 Age of insured person

65 years of Type of insurance coverage Total years of age age or over

Persons in thousands

Total 248886 218793 300S3 Total insured 214167 184351 29816

Private only 153202 152284 918 Public only 32031 22781 9250

Medicare only 7781 1048 6733 Medicaid only 16743 16723 2JJ CHAMPUS only 3577 3532 44 Medicare and Medicaid 3019 1035 1985 Medicare and CHAMPUS 510 103 408 Medicaid and CHAMPUS 312 312 0 Medicare Medicaid and CHAMPUS 89 28 61

Private and public 28933 9285 19648 Private and Medicare 19543 1027 18516 Private and Medicaid 3316 3314 2 Private and CHAMPUS 4650 4613 37 Private Medicaid and Medicare 640 148 492 Private Medicaid and CHAMPUS 106 106 0 Private Medicare and CHAMPUS 644 65 578 Private Medicare Medicaid and CHAMPUS 34 11 23

Total uninsured 34719 34443 276

Percent distribution

Total 1000 1000 1000 Total insured 861 843 991

Private only 616 696 31 Public only 129 104 307

Medicare only 31 05 224 Medicaid only 67 76 01 CHAMPUS only 14 16 01 Medicare and Medicaid 12 05 68 Medicare and CHAMPUS 02 00 14 Medicaid and CHAMPUS 01 01 00 Medicare Medicaid and CHAMPUS 00 00 02

Private and public 116 42 653 Private and Medicare 79 05 615 Private and Medicaid 13 15 00 Private and CHAMPUS 19 21 01 Private Medicaid and Medicare 03 01 16 Private Medicaid and CHAMPUS 00 00 00 Private Medicare and CHAMPUS 03 00 19 Private Medicare Medicaid and CHAMPUS 00 00 01

Total uninsured 139 157 09

732 738 683 130 16 957 97 99 86

and former military

SOURCE US Bureau of the Census Current Population Survey 1991 tabulallons prepared byFu Associates Ud for the Health Care Financing Administration Office of the Actuary

Employer-sponsored private health insnrance

The main purpose of the CPS is to address on a monthly basis questions on employment and unemployment Throughout the CPS years the most consistently reported statistics were related to health insurance policy ownership of workers that is persons age 15 years or over who worked during the prior year In the 1991 CPS employers provided health insurance to 558 percent of the population 282 percent being

workers and 275 percent being dependents From 1980through 1991 there was a small

downward trend in the percent of the population covered by employeNponsored policies (Table 4) Using 1980-91 data excluding cover sheet children the nwnber of workers owning private health insurance policies rose by 36 million persons the number of covered dependents fell by 21 million The net effect was a 15-million increase in the number of people covered by employer-sponsored plans During this 12-year period employer coverage of workers and

Health Qlre Financln ReviewFalll992votume 14 Numlgtfr l 36

Table 4 Number and percent distribution of workers and their dependents with employer-sponsored health

insurance coverage United States 198091 Number in thousands covered by

Survey Population thousands

in

employer-sponsored heahh Insurance

Workers2 In Total Polley CoveredthOusands covered owners dependents3

Number including cover sheet children4

1991 248886 134325 138797 70251 69546 1990 246191 132730 140518 70923 69595 1969 243685 131370 139926 70221 69705 1988 241187 129181 139147 69254 69893

Number excluding cover sheet children4

1991 248886 134325 136691 70251 66441 1990 246191 132730 138354 70923 67431 1989 243685 131370 137936 70221 67715 1988 241187 129181 137410 69254 68156 1987 238789 126714 138510 71749 66761 1985 234066 122109 134257 68576 65681 1960 223160 116231 135157 66640 68517

Percent distribution including cover sheet children4

1991 1000 540 558 282 275 1990 1000 539 571 288 283 1989 1000 539 574 288 286 1988 1000 536 577 287 290

Percent distribution excluding cover sheet children4

1991 1000 540 549 282 267 1990 1000 539 562 288 274 1889 1000 539 566 288 278 1988 1000 536 570 287 283 1987 1000 531 580 300 280 1985 1000 522 574 293 281 1980 1000 521 606 299 307

Cumulative growth including cover sheet children4

1988--91 32 40 -03 14 -19

Cumulative growth excluding cover sheet children4

1980-91 115 156 11 54 -30 1Civlllan oon-institutionalized population In the United States and military personnelliYing outside mimary bases or on military bases with their families 2Persons who WOfked during the previous year Includes approximately 04 percent of workers who worked without pay3ooes not include policy owners Does not include persons covered as dependents of oon-working employer plan owners41n the 1988-91 wrveys addWonal questions covering health insurance stalus of children were asked This set of questions is relerred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

SOURCE US Bureau ofthe Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

dependents grew only 11 percent but the number of workers rose 156 percent and the population increased 115 percent In other words employers who have been responsible for providing health insurance to the nonshyaged population supplied a smaller share of insurance coverage to the population in 1991 than in 1980 If employers had supplied the same proportion of the population with insurance in 1991 as they did in 1980 an additionall2 million persons potentially equivalent to one-third of the total number of uninsured would have received insurance through this source

Coverage by industry

1991 CPS data show a distinct difference among industries in the percentage of workers owning employer-sponsored health insurance At one extreme industries such as mining manufacturing and transportation communications and public utilities provided coverage to 734-795 percent of their work

force (Table 5) At the low end agriculture forestry and fisheries construction retail trade business and personal services and the self-employed (in unincorporated businesses) were more modest in their work force coverage at 177 to 448 percent The degree of unionization and the prevalence of low-paying or part-time jobs determine in part the penetration of insurance coverage by industry

In 1980-91 the proportion of workers owning health insurance through their employers declined from 573 to 523 percentZ All industries except business and professional services and the self-employed contributed

2A discontinuily in the times series exists in that respondents to the 1988 and later CPSs could only report coverage by a single policy Persons with multiple coverages (medical coverage as a dependent spouse and dental coverage as an owner of an employer-sponsored policy) would only report coverage by a single policy most likely the one providing their primary care This change probably accounted for much of the )-percentage-point drop in the percentage of workerscovered from 1987 to 1988

Health care tlnanciD(I ReviewFall 1992volume 14Number 1 37

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

unaffordable forcing them into the ranks of the uninsured

Issues such as these are creating national debate about the state of the Nations health care system and are producing wide-ranging proposals for access and financing reform The data presented in this article identify trends and potential problem areas that should be considered in developing solutions to health care access and financing problems

Current Population Survey

For the past 50 years the US Bureau of the Census has conducted the CPS each month to collect statistics on employment and unemployment for the Nation The surveyed population is constructed as a national probability sample of approximately 57000 households covering 158000 non-institutionalized persons in 1991 Households interviewed are selected on the basis of residence to represent the Nation as a whole individual States and other specified areas (US Bureau of the Census 1985 1991)

The survey asks extensive questions about occupation industry work hours hourly earnings income family structure education and a variety of demographic characteristics In addition the March supplement annually queries people about their health insurance coverage Because of the CPS strength in describing work force characteristics it is one of the best sources for identifying work-related characteristics of the owner of an employer-sponsored group health insurance policy as well as of uninsured workers

The CPS health insurance questions generally solicit information on the same categories of health insurance over time However changes in the questionnaire and in imputation and processing techniques had an impact on responses collected in specific years The most significant changes in private health insurance questions introduced in the 1988 CPS produced inconsistencies in trends of insurance coverage infonnation available from the CPS Awareness of these changes which are described later allows the analyst to appropriately extract and use trends in insurance sources and coverage over time

The 1988 revisions to the CPS questions primarily affected the comprehensiveness of information on plan owners and sources of insurance coverage for children young adults and retirees in several ways First policy owners were asked about only one health insurance plan even though they could own two or more plans This made counts of private health insurance policies owned by individuals less complete than in earlier years

Second more employer-sponsored plans were identified beginning with the 1988 CPS because all adults age 15 years or over rather than only employed persons were asked about employer-sponsored health insurance plans This change identified coverage through former employers for persons owning retirement health insurance coverage and their dependents or for other non-workers and their dependents with extended coverage for separated employees

Third by asking all persons 15 years of age or over about health insurance coverage additional adult dependents (primarily age 22 or over) could identify coverage Prior to 1988 this group would only be asked if they were policy owners and who was covered by their policies they could not directly identify themselves as a covered dependent Persons in this group would also not be assigned coverage as a dependent child because the US Bureau of the Census imputation rules did not pennit CPS to show coverage of children age 22 or over

Fourth information on the insurance coverage of children under 15 years of age became more comprehensive by adding questions about outsideshyhousehold sources of insurance coverage for this age group The survey directly solicited information on insurance coverage and ownership from persons age 15 years or over but used rules to impute insurance coverage for children and other dependents based on broad responses concerning who was covered If a policy owner indicated that his or her insurance plan covered children for example the US Bureau of the Census imputed coverage to all never-married children under age 22 even though some of them were working and covered under their own policies or were uninsured Beginning in the 1988 CPS direct questions about childrens insurance coverage were used to augment imputed coverage information Additional cover sheet questions directly solicited childrens Medicaid and other (non-employer-sponsored) private health insurance coverage independent of adult coverage In this article children identified as a result of these questions as having coverage are referred to as cover sheet children because responses indicating their coverage were recorded on the survey cover sheet

Fifth the US Bureau of the Census instituted weighting programming and processing improvements to coincide with these major questionnaire changes

In addition to the changes made beginning in 1988 the omission of certain questions in the 1981 questionnaire affected the availability of other (nonshyemployer) private insurance information This omission influenced tabulated counts of private health insurance coverage and the counts of the uninsured

Despite these data inconsistencies valuable information about insurance trends can be extracted For some insurance source and coverage time series data are separated into two time periods 1980-87 and 1988-91 to take advantage of more comprehensive data available after the major survey changes in 1988 However data are also presented for 1980-91 without the addition of cover sheet children Examining data without cover sheet children removes some but not all of the inconsistencies that occurred between the 1987 and 1988 CPS and provides a broad indication of cumulative growth from 1980 to 1991

The March CPS questionnaire requests insurance coverage and ownership information for the year prior to the one in which the survey was conducted Analysts who use CPS information disagree as to whether responses reflect insurance status during the previous year as requested or the current year (Swartz 1986

Health care Financing ReviewFaD 1992vruume 14 Number 1 32

Kronick 1991 ) To avoid confusion in the presentation of our data the year given refers to the CPS survey year except when noted and reflects responses to questions on the March survey supplement

Sources of insurance

In the CPS respondents may specify insurance coverage through private health insurance or one of three public programs Medicare Medicaid or coverage for current or former military personnel and dependents Tabulations from the 1991 CPS show that 214 million persons or 861 percent of all Americans

were covered by some form of public or private insurance (Table 1) Almost three-quarters of the population obtained coverage through private insurance and one-quarter through public programs The publicly and privately insured groups overlapped for 116 percent of the population Almost three-quarters of these overlaps were Medicare enrollees who also had some form of private health insurance coverage The remaining 139 percent of the population lacked insurance from any source

Over the past 12 years changes in the CPS questionnaire produced discontinuities in counts of persons covered by some sources as just described

Table 1

Sources of health insurance coverage and percent distribution United States 1980-91 Number of persons in thousands insured by Total persons in thousands insured by1

Private Private health Public insurance

Total uninsured Private

3 Public programs

Survey year

Populatlon2

in thousands All insurance programs and public

sources only only programs

thousands

health insurance4 Total CHAMPUS5

Including cover sheet children6

1991 248886 214167 153202 32031 28933 34719 182135 60965 9922 1990 246191 212807 155425 29197 28185 33385 183610 57382 9870 1989 243685 211005 154155 28986 27864 32680 182019 56850 10105 1988 241187 210161 153879 28001 28282 31026 182160 56282 10542

Excluding cover sheet children6

1991 248886 209257 150181 32301 26774 39629 176956 59076 9922 1990 246191 208145 152325 29846 25974 38047 178298 55820 9870 1989 243685 206855 151290 29669 25896 36830 177186 55565 10105 1988 241187 206364 151295 28586 26483 34823 177779 55069 10542 1987 238789 201432 146807 30995 23630 37357 170436 54625 9982 1986 236749 199569 145444 31070 23055 37180 168499 54125 10471 1985 234066 197011 143989 30981 22041 37055 166030 53022 9756 1984 231852 196527 144431 30476 21620 35325 166051 52095 9561 1983 229587 196591 144788 30558 21244 32996 166033 51802 9992 1982 227375 196400 144333 30169 21898 30974 166231 52067 10453 1981 225242 NA NA NA NA NA NA 48678 8468 1980 223160 192666 145744 27986 18956 30474 164700 46942 7931

Percent distribution including cover sheet childrene

1991 1000 861 616 129 116 139 732 245 40 1990 1000 864 631 119 114 136 746 233 40 1989 1000 866 633 119 114 134 747 233 41 1988 1000 871 636 116 117 129 755 233 44

Percent distribution excluding cover sheet children6

1991 1000 841 603 130 108 159 711 237 40 1990 1000 845 619 121 106 155 724 227 40 1989 1000 849 621 122 106 151 727 228 41 1988 1000 856 627 119 110 144 737 228 44 1987 1000 844 615 130 99 156 714 229 42 1986 1000 843 614 131 97 157 712 229 44 1985 1000 842 615 132 94 158 709 227 42 1984 1000 848 623 131 93 152 716 225 41 1983 1000 856 631 133 93 144 723 226 44 1982 1000 864 635 133 96 136 731 229 46 1981 1000 NA NA NA NA NA NA 217 38 1980 1000 863 653 125 85 137 738 210 36 11ncluded in other columns in this table 2civ111an non-Institutionalized population in the United States and military personr~el tivirlQ outside military bases or on military bases with their families SCalculated by summing Public programs only and Private insurance and public programs 4Calculated by summing Private health insurarlCE only and Private health lnsurarlCE and public programs 5civllian Health and Medical Program of the Uniformed SeiVices Gnd other programs covering current and former military personnel and their dependents 6tn the 1988-91 surveys additional questions corllteming health insurance status ol children were asked This set of questions is referred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

NOTES Public programs indicate coverage by Medicare Medicaid andfor CHAMP US NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Population Survey 1960-91 tabulations prepared by Fu Associates Ltd for the Health Care Rnancing Administration Office of the Actuary

Health Care Financlnamp ReviewFalll992Volume14 Number 1 33

The most significant changes middotoccurred between the 1987 and 1988 versions of the survey These survey improvements minimized the magnitude of change in the proportion of the population with and without health insurance coverage as recorded in the 1980-91 surveys If the survey had been more consistent over time the trends would likely have been more pronounced than those reported here

The percent of Americans covered by private health insurance declined from 1980 to 1991 Because of discontinuities in the CPS time series we separate this time span into two periods 1980 through 1987 and 1988 through 1991 Despite a gain of 57 million persons covered by private health insurance during the first period the proportion of the population with private coverage declined from 738 to 714 percent The cumulative growth of 35 percent in private insurance coverage did not keep pace with the population increase of 70 percent

During the first period the Nation was emerging from recession The economy was recovering from a bout with general price inflation in 1980 and 1981 and continued price inflation for medical care that extended into 1983 (Donham Maple and Levit 1992) which affected business ability to provide increasingly expensive health benefits for workers (Kronick 1991) The industrial composition in the country was also changing rapidly with more jobs shifting from highshybenefit industries such as manufacturing to the service sector which is characterized by lower benefits The recession decreased the demand for labor particularly for factory workers as many businesses eliminated excess jobs Labor unions had little choice but to accept benefit and wage compromises (Plunkert 1990) Because most Americans received private coverage through employment these events reduced private health insurance coverage during the first half of the 1980s The proportion of Americans with private coverage reached a low of 709 percent in the 1985 CPS

From 1988 through 1991 the number of persons with private coverage remained fairly stable (using data including cover sheet children) despite population growth of 32 percent This produced a decline of 23 percentage points in the share of Americans with private coverage In the 1991 CPS alone the portion of the population with private coverage fell 14 percentage points-amounting to a loss in coverage for 33 million persons who would have received coverage had the share remained stable Based on the 1991 CPS the current recession appeared to have a similar impact on private health insurance coverage as it did in the early 1980s The extent of the impact will be more fully reported in the 1992 CPS

In these tabulations we report public program coverage defined as coverage through Medicare Medicaid or military and veterans programs From 1980 through 1982 public program coverage increased coinciding with the recession in the early 1980s that fostered rising unemployment and loss of private ~mployer-sponsored coverage Throughout the middle of the decade public programs covered a stable portion of the population-from 225 to 229 percent The

1991 CPS reports a larger proportion of the population covered by public programs than ever before The share increased 12 percentage points from 1990 through 1991 (including cover sheet children) because of major expansions in the Medicaid program

During the 1980-91 period the number of uninsured persons grew by 30 percent (excluding cover sheet children) while the population grew only It S percent For 1988 through 1991 alone the number of uninsured increased 119 percent (including cover sheet children) compared with population growth of 32 percent In 1991 139 percent of the population lacked any form of public or private coverage 1 percentage point more than in 1988 (including cover sheet children)

In summary the past 12 years of CPS data depict gradual changes in the health insurance structure in this Nation Although the number of persons covered by private health insurance increased it increased more slowly than the population Public programs particularly Medicare and Medicaid covered an increasing proportion of the population but failed to offset the decline in the population share covered from private sources This resulted in a rising proportion of the population without health insurance coverage a proportion that rose 22 percentage points over the last 12 years (excluding cover sheet children) and 10 percentage point in the last 4 years (including cover sheet children)

Coverage for aged and non-aged

The aged (persons 65 years of age or over) and nonshyaged populations have distinctly different sources of health insurance coverage The non-aged population traditionally received coverage through private health insurance (738 percent in the 1991 CPS including cover sheet children) while public programs provided only a small portion (146 percent) of coverage (derived from Table 2) Only 42 percent of the non-aged population received coverage from both public and private sources in the 1991 CPS mostly through private health insurance in combination with CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) or Medicaid Most of the uninsured population are non-aged because Medicare almost universally covers the aged

For the aged population health insurance coverage was obtained predominantly through a combination of public and private programs with 960 percent reporting coverage by public programs In the 1991 CPS 653 percent of the aged had both public and private coverage of these almost all had Medicare supplemented by a private health insurance policy Public programs alone (usually Medicare alone or in combination with other public programs such as Medicaid) covered 307 percent of the aged population (Table 3) Less than I percent of all persons age 65 years or over could not identify any form of health insurance coverage on the CPS

Citing the same caveats as for Table 1 that minimize the trends the 1980-91 surveys record a distinct loss in the share of the non-aged population covered by private

Healtb Care Fl~taltcinamp Re11iewFa111992Volume 14 Number 1 34

Table 2 Percent distribution of aged and non-aged Insured persons by source of Insurance and percent of

persons uninsured United States 1980middot91 Percent distribution of persons insured by

Percent of Private insurance Survey Population1 All Private health Public and public year in thousands sources insurance only programs only programs uninsured

Non-aged2 persons Including cover sheet children3

1991 218793 843 696 104 42 157 1990 216625 847 713 92 42 153 1969 214663 849 714 94 42 151 1988 212700 856 720 94 42 144

Nonmiddotaged2 persons excluding cover sheet chitdren3

1991 218793 820 682 105 33 180 1990 216625 826 699 95 32 174 1989 214663 830 701 97 32 170 1988 212700 838 708 97 33 162 1987 210814 824 693 97 34 176 1986 209427 824 692 98 34 176 1985 207248 822 691 97 34 178 1984 205561 830 699 97 33 170 1983 203849 840 707 96 37 160 1982 202143 848 711 93 44 152 1981 200556 NA NA NA NA NA 1960 198966 851 727 87 37 149

Persons 65 years of age or over 1991 30093 991 31 307 653 09 1960 29566 990 31 313 645 10 1989 29022 991 32 307 652 09 1988 28487 989 26 263 680 11 1987 27975 989 24 376 569 11 1986 27322 990 23 363 564 10 1985 26818 990 26 402 562 10 1984 26291 989 26 401 562 11 1983 25738 967 26 429 533 13 1982 25231 969 24 448 517 11 1981 24886 NA NA NA NA NA 1960 24194 966 47 441 477 34 1CMIIan nonmiddotinstilulionalized population in the United States and military personnalliving outside military bases or on military bases with their families 2persons 0-64 years of age 3tn the 1986-91 surveys additional questions concaming health insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to thEIIOe questions resulted in additional children being assigned health insurartee coverage

NOTES PUbliC programs indicate coverage by Medicare Medicaid andor CHAMPUS NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Cummt Population SuiYEiy 1980-91 tabulations prepared by Fu Associates Ltd lot the Health Cere Financing AdminiSifation Office of the Actuary

health insurance Public programs picked up some of this loss over the time span but not enough to prevent the growth of the share of the non-aged population without any coverage The share of the non-aged population without coverage increased by 27 percentage points (excluding cover sheet children) from 1980 to 1987 and by 13 percentage points (including cover sheet children from 1988 to 1991

For the aged population the 19821 through 1991 CPS results showed little change in the share of the population insured and uninsured Virtually all elderly persons received coverage through Medicare The proportion of aged persons supplementing their Medicare coverage with independently purchased

11980 data are not used because the CPS Medicare population increased by almost twice the number of persons from 1980 to 1982 as indicated by program data Part of the explanation for this difference may be linked to changes in the weighting process in the 1982 CPS These changes included the introduction of independent race category controls and of the 1980 census population weights

private health insurance also appeared to grow from the 1980 through 1987 CPS years This proportion has remained stable for 1989-91

In the 1991 CPS 132 percent of the population was covered by more than one type of insurance that is by private insurance Medicare Medicaid or CHAMPUS (derived from Table 3) Multiple coverage was more prevalent for the elderly with 734 percent of that cohort receiving coverage from two or more of these sources For the non-elderly population only 49 percent received coverage from more than one source usually private health insurance in combination with CHAMPUS or Medicaid Elderly persons had Medicare and private health insurance coverage most often (615 percent ofthls population) followed by Medicare and Medicaid (66 percent of the population)(Most persons covered by Medicare and Medicaid are institutionalized and therefore are not included in the CPS)

Health Care Financiq ReviewFaD 1992volume 14 Number 1 35

Table 3 Number and percent distribution of persons covered by insurance by age and type of coverage

United States 1991 Age of insured person

65 years of Type of insurance coverage Total years of age age or over

Persons in thousands

Total 248886 218793 300S3 Total insured 214167 184351 29816

Private only 153202 152284 918 Public only 32031 22781 9250

Medicare only 7781 1048 6733 Medicaid only 16743 16723 2JJ CHAMPUS only 3577 3532 44 Medicare and Medicaid 3019 1035 1985 Medicare and CHAMPUS 510 103 408 Medicaid and CHAMPUS 312 312 0 Medicare Medicaid and CHAMPUS 89 28 61

Private and public 28933 9285 19648 Private and Medicare 19543 1027 18516 Private and Medicaid 3316 3314 2 Private and CHAMPUS 4650 4613 37 Private Medicaid and Medicare 640 148 492 Private Medicaid and CHAMPUS 106 106 0 Private Medicare and CHAMPUS 644 65 578 Private Medicare Medicaid and CHAMPUS 34 11 23

Total uninsured 34719 34443 276

Percent distribution

Total 1000 1000 1000 Total insured 861 843 991

Private only 616 696 31 Public only 129 104 307

Medicare only 31 05 224 Medicaid only 67 76 01 CHAMPUS only 14 16 01 Medicare and Medicaid 12 05 68 Medicare and CHAMPUS 02 00 14 Medicaid and CHAMPUS 01 01 00 Medicare Medicaid and CHAMPUS 00 00 02

Private and public 116 42 653 Private and Medicare 79 05 615 Private and Medicaid 13 15 00 Private and CHAMPUS 19 21 01 Private Medicaid and Medicare 03 01 16 Private Medicaid and CHAMPUS 00 00 00 Private Medicare and CHAMPUS 03 00 19 Private Medicare Medicaid and CHAMPUS 00 00 01

Total uninsured 139 157 09

732 738 683 130 16 957 97 99 86

and former military

SOURCE US Bureau of the Census Current Population Survey 1991 tabulallons prepared byFu Associates Ud for the Health Care Financing Administration Office of the Actuary

Employer-sponsored private health insnrance

The main purpose of the CPS is to address on a monthly basis questions on employment and unemployment Throughout the CPS years the most consistently reported statistics were related to health insurance policy ownership of workers that is persons age 15 years or over who worked during the prior year In the 1991 CPS employers provided health insurance to 558 percent of the population 282 percent being

workers and 275 percent being dependents From 1980through 1991 there was a small

downward trend in the percent of the population covered by employeNponsored policies (Table 4) Using 1980-91 data excluding cover sheet children the nwnber of workers owning private health insurance policies rose by 36 million persons the number of covered dependents fell by 21 million The net effect was a 15-million increase in the number of people covered by employer-sponsored plans During this 12-year period employer coverage of workers and

Health Qlre Financln ReviewFalll992votume 14 Numlgtfr l 36

Table 4 Number and percent distribution of workers and their dependents with employer-sponsored health

insurance coverage United States 198091 Number in thousands covered by

Survey Population thousands

in

employer-sponsored heahh Insurance

Workers2 In Total Polley CoveredthOusands covered owners dependents3

Number including cover sheet children4

1991 248886 134325 138797 70251 69546 1990 246191 132730 140518 70923 69595 1969 243685 131370 139926 70221 69705 1988 241187 129181 139147 69254 69893

Number excluding cover sheet children4

1991 248886 134325 136691 70251 66441 1990 246191 132730 138354 70923 67431 1989 243685 131370 137936 70221 67715 1988 241187 129181 137410 69254 68156 1987 238789 126714 138510 71749 66761 1985 234066 122109 134257 68576 65681 1960 223160 116231 135157 66640 68517

Percent distribution including cover sheet children4

1991 1000 540 558 282 275 1990 1000 539 571 288 283 1989 1000 539 574 288 286 1988 1000 536 577 287 290

Percent distribution excluding cover sheet children4

1991 1000 540 549 282 267 1990 1000 539 562 288 274 1889 1000 539 566 288 278 1988 1000 536 570 287 283 1987 1000 531 580 300 280 1985 1000 522 574 293 281 1980 1000 521 606 299 307

Cumulative growth including cover sheet children4

1988--91 32 40 -03 14 -19

Cumulative growth excluding cover sheet children4

1980-91 115 156 11 54 -30 1Civlllan oon-institutionalized population In the United States and military personnelliYing outside mimary bases or on military bases with their families 2Persons who WOfked during the previous year Includes approximately 04 percent of workers who worked without pay3ooes not include policy owners Does not include persons covered as dependents of oon-working employer plan owners41n the 1988-91 wrveys addWonal questions covering health insurance stalus of children were asked This set of questions is relerred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

SOURCE US Bureau ofthe Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

dependents grew only 11 percent but the number of workers rose 156 percent and the population increased 115 percent In other words employers who have been responsible for providing health insurance to the nonshyaged population supplied a smaller share of insurance coverage to the population in 1991 than in 1980 If employers had supplied the same proportion of the population with insurance in 1991 as they did in 1980 an additionall2 million persons potentially equivalent to one-third of the total number of uninsured would have received insurance through this source

Coverage by industry

1991 CPS data show a distinct difference among industries in the percentage of workers owning employer-sponsored health insurance At one extreme industries such as mining manufacturing and transportation communications and public utilities provided coverage to 734-795 percent of their work

force (Table 5) At the low end agriculture forestry and fisheries construction retail trade business and personal services and the self-employed (in unincorporated businesses) were more modest in their work force coverage at 177 to 448 percent The degree of unionization and the prevalence of low-paying or part-time jobs determine in part the penetration of insurance coverage by industry

In 1980-91 the proportion of workers owning health insurance through their employers declined from 573 to 523 percentZ All industries except business and professional services and the self-employed contributed

2A discontinuily in the times series exists in that respondents to the 1988 and later CPSs could only report coverage by a single policy Persons with multiple coverages (medical coverage as a dependent spouse and dental coverage as an owner of an employer-sponsored policy) would only report coverage by a single policy most likely the one providing their primary care This change probably accounted for much of the )-percentage-point drop in the percentage of workerscovered from 1987 to 1988

Health care tlnanciD(I ReviewFall 1992volume 14Number 1 37

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Kronick 1991 ) To avoid confusion in the presentation of our data the year given refers to the CPS survey year except when noted and reflects responses to questions on the March survey supplement

Sources of insurance

In the CPS respondents may specify insurance coverage through private health insurance or one of three public programs Medicare Medicaid or coverage for current or former military personnel and dependents Tabulations from the 1991 CPS show that 214 million persons or 861 percent of all Americans

were covered by some form of public or private insurance (Table 1) Almost three-quarters of the population obtained coverage through private insurance and one-quarter through public programs The publicly and privately insured groups overlapped for 116 percent of the population Almost three-quarters of these overlaps were Medicare enrollees who also had some form of private health insurance coverage The remaining 139 percent of the population lacked insurance from any source

Over the past 12 years changes in the CPS questionnaire produced discontinuities in counts of persons covered by some sources as just described

Table 1

Sources of health insurance coverage and percent distribution United States 1980-91 Number of persons in thousands insured by Total persons in thousands insured by1

Private Private health Public insurance

Total uninsured Private

3 Public programs

Survey year

Populatlon2

in thousands All insurance programs and public

sources only only programs

thousands

health insurance4 Total CHAMPUS5

Including cover sheet children6

1991 248886 214167 153202 32031 28933 34719 182135 60965 9922 1990 246191 212807 155425 29197 28185 33385 183610 57382 9870 1989 243685 211005 154155 28986 27864 32680 182019 56850 10105 1988 241187 210161 153879 28001 28282 31026 182160 56282 10542

Excluding cover sheet children6

1991 248886 209257 150181 32301 26774 39629 176956 59076 9922 1990 246191 208145 152325 29846 25974 38047 178298 55820 9870 1989 243685 206855 151290 29669 25896 36830 177186 55565 10105 1988 241187 206364 151295 28586 26483 34823 177779 55069 10542 1987 238789 201432 146807 30995 23630 37357 170436 54625 9982 1986 236749 199569 145444 31070 23055 37180 168499 54125 10471 1985 234066 197011 143989 30981 22041 37055 166030 53022 9756 1984 231852 196527 144431 30476 21620 35325 166051 52095 9561 1983 229587 196591 144788 30558 21244 32996 166033 51802 9992 1982 227375 196400 144333 30169 21898 30974 166231 52067 10453 1981 225242 NA NA NA NA NA NA 48678 8468 1980 223160 192666 145744 27986 18956 30474 164700 46942 7931

Percent distribution including cover sheet childrene

1991 1000 861 616 129 116 139 732 245 40 1990 1000 864 631 119 114 136 746 233 40 1989 1000 866 633 119 114 134 747 233 41 1988 1000 871 636 116 117 129 755 233 44

Percent distribution excluding cover sheet children6

1991 1000 841 603 130 108 159 711 237 40 1990 1000 845 619 121 106 155 724 227 40 1989 1000 849 621 122 106 151 727 228 41 1988 1000 856 627 119 110 144 737 228 44 1987 1000 844 615 130 99 156 714 229 42 1986 1000 843 614 131 97 157 712 229 44 1985 1000 842 615 132 94 158 709 227 42 1984 1000 848 623 131 93 152 716 225 41 1983 1000 856 631 133 93 144 723 226 44 1982 1000 864 635 133 96 136 731 229 46 1981 1000 NA NA NA NA NA NA 217 38 1980 1000 863 653 125 85 137 738 210 36 11ncluded in other columns in this table 2civ111an non-Institutionalized population in the United States and military personr~el tivirlQ outside military bases or on military bases with their families SCalculated by summing Public programs only and Private insurance and public programs 4Calculated by summing Private health insurarlCE only and Private health lnsurarlCE and public programs 5civllian Health and Medical Program of the Uniformed SeiVices Gnd other programs covering current and former military personnel and their dependents 6tn the 1988-91 surveys additional questions corllteming health insurance status ol children were asked This set of questions is referred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

NOTES Public programs indicate coverage by Medicare Medicaid andfor CHAMP US NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Population Survey 1960-91 tabulations prepared by Fu Associates Ltd for the Health Care Rnancing Administration Office of the Actuary

Health Care Financlnamp ReviewFalll992Volume14 Number 1 33

The most significant changes middotoccurred between the 1987 and 1988 versions of the survey These survey improvements minimized the magnitude of change in the proportion of the population with and without health insurance coverage as recorded in the 1980-91 surveys If the survey had been more consistent over time the trends would likely have been more pronounced than those reported here

The percent of Americans covered by private health insurance declined from 1980 to 1991 Because of discontinuities in the CPS time series we separate this time span into two periods 1980 through 1987 and 1988 through 1991 Despite a gain of 57 million persons covered by private health insurance during the first period the proportion of the population with private coverage declined from 738 to 714 percent The cumulative growth of 35 percent in private insurance coverage did not keep pace with the population increase of 70 percent

During the first period the Nation was emerging from recession The economy was recovering from a bout with general price inflation in 1980 and 1981 and continued price inflation for medical care that extended into 1983 (Donham Maple and Levit 1992) which affected business ability to provide increasingly expensive health benefits for workers (Kronick 1991) The industrial composition in the country was also changing rapidly with more jobs shifting from highshybenefit industries such as manufacturing to the service sector which is characterized by lower benefits The recession decreased the demand for labor particularly for factory workers as many businesses eliminated excess jobs Labor unions had little choice but to accept benefit and wage compromises (Plunkert 1990) Because most Americans received private coverage through employment these events reduced private health insurance coverage during the first half of the 1980s The proportion of Americans with private coverage reached a low of 709 percent in the 1985 CPS

From 1988 through 1991 the number of persons with private coverage remained fairly stable (using data including cover sheet children) despite population growth of 32 percent This produced a decline of 23 percentage points in the share of Americans with private coverage In the 1991 CPS alone the portion of the population with private coverage fell 14 percentage points-amounting to a loss in coverage for 33 million persons who would have received coverage had the share remained stable Based on the 1991 CPS the current recession appeared to have a similar impact on private health insurance coverage as it did in the early 1980s The extent of the impact will be more fully reported in the 1992 CPS

In these tabulations we report public program coverage defined as coverage through Medicare Medicaid or military and veterans programs From 1980 through 1982 public program coverage increased coinciding with the recession in the early 1980s that fostered rising unemployment and loss of private ~mployer-sponsored coverage Throughout the middle of the decade public programs covered a stable portion of the population-from 225 to 229 percent The

1991 CPS reports a larger proportion of the population covered by public programs than ever before The share increased 12 percentage points from 1990 through 1991 (including cover sheet children) because of major expansions in the Medicaid program

During the 1980-91 period the number of uninsured persons grew by 30 percent (excluding cover sheet children) while the population grew only It S percent For 1988 through 1991 alone the number of uninsured increased 119 percent (including cover sheet children) compared with population growth of 32 percent In 1991 139 percent of the population lacked any form of public or private coverage 1 percentage point more than in 1988 (including cover sheet children)

In summary the past 12 years of CPS data depict gradual changes in the health insurance structure in this Nation Although the number of persons covered by private health insurance increased it increased more slowly than the population Public programs particularly Medicare and Medicaid covered an increasing proportion of the population but failed to offset the decline in the population share covered from private sources This resulted in a rising proportion of the population without health insurance coverage a proportion that rose 22 percentage points over the last 12 years (excluding cover sheet children) and 10 percentage point in the last 4 years (including cover sheet children)

Coverage for aged and non-aged

The aged (persons 65 years of age or over) and nonshyaged populations have distinctly different sources of health insurance coverage The non-aged population traditionally received coverage through private health insurance (738 percent in the 1991 CPS including cover sheet children) while public programs provided only a small portion (146 percent) of coverage (derived from Table 2) Only 42 percent of the non-aged population received coverage from both public and private sources in the 1991 CPS mostly through private health insurance in combination with CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) or Medicaid Most of the uninsured population are non-aged because Medicare almost universally covers the aged

For the aged population health insurance coverage was obtained predominantly through a combination of public and private programs with 960 percent reporting coverage by public programs In the 1991 CPS 653 percent of the aged had both public and private coverage of these almost all had Medicare supplemented by a private health insurance policy Public programs alone (usually Medicare alone or in combination with other public programs such as Medicaid) covered 307 percent of the aged population (Table 3) Less than I percent of all persons age 65 years or over could not identify any form of health insurance coverage on the CPS

Citing the same caveats as for Table 1 that minimize the trends the 1980-91 surveys record a distinct loss in the share of the non-aged population covered by private

Healtb Care Fl~taltcinamp Re11iewFa111992Volume 14 Number 1 34

Table 2 Percent distribution of aged and non-aged Insured persons by source of Insurance and percent of

persons uninsured United States 1980middot91 Percent distribution of persons insured by

Percent of Private insurance Survey Population1 All Private health Public and public year in thousands sources insurance only programs only programs uninsured

Non-aged2 persons Including cover sheet children3

1991 218793 843 696 104 42 157 1990 216625 847 713 92 42 153 1969 214663 849 714 94 42 151 1988 212700 856 720 94 42 144

Nonmiddotaged2 persons excluding cover sheet chitdren3

1991 218793 820 682 105 33 180 1990 216625 826 699 95 32 174 1989 214663 830 701 97 32 170 1988 212700 838 708 97 33 162 1987 210814 824 693 97 34 176 1986 209427 824 692 98 34 176 1985 207248 822 691 97 34 178 1984 205561 830 699 97 33 170 1983 203849 840 707 96 37 160 1982 202143 848 711 93 44 152 1981 200556 NA NA NA NA NA 1960 198966 851 727 87 37 149

Persons 65 years of age or over 1991 30093 991 31 307 653 09 1960 29566 990 31 313 645 10 1989 29022 991 32 307 652 09 1988 28487 989 26 263 680 11 1987 27975 989 24 376 569 11 1986 27322 990 23 363 564 10 1985 26818 990 26 402 562 10 1984 26291 989 26 401 562 11 1983 25738 967 26 429 533 13 1982 25231 969 24 448 517 11 1981 24886 NA NA NA NA NA 1960 24194 966 47 441 477 34 1CMIIan nonmiddotinstilulionalized population in the United States and military personnalliving outside military bases or on military bases with their families 2persons 0-64 years of age 3tn the 1986-91 surveys additional questions concaming health insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to thEIIOe questions resulted in additional children being assigned health insurartee coverage

NOTES PUbliC programs indicate coverage by Medicare Medicaid andor CHAMPUS NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Cummt Population SuiYEiy 1980-91 tabulations prepared by Fu Associates Ltd lot the Health Cere Financing AdminiSifation Office of the Actuary

health insurance Public programs picked up some of this loss over the time span but not enough to prevent the growth of the share of the non-aged population without any coverage The share of the non-aged population without coverage increased by 27 percentage points (excluding cover sheet children) from 1980 to 1987 and by 13 percentage points (including cover sheet children from 1988 to 1991

For the aged population the 19821 through 1991 CPS results showed little change in the share of the population insured and uninsured Virtually all elderly persons received coverage through Medicare The proportion of aged persons supplementing their Medicare coverage with independently purchased

11980 data are not used because the CPS Medicare population increased by almost twice the number of persons from 1980 to 1982 as indicated by program data Part of the explanation for this difference may be linked to changes in the weighting process in the 1982 CPS These changes included the introduction of independent race category controls and of the 1980 census population weights

private health insurance also appeared to grow from the 1980 through 1987 CPS years This proportion has remained stable for 1989-91

In the 1991 CPS 132 percent of the population was covered by more than one type of insurance that is by private insurance Medicare Medicaid or CHAMPUS (derived from Table 3) Multiple coverage was more prevalent for the elderly with 734 percent of that cohort receiving coverage from two or more of these sources For the non-elderly population only 49 percent received coverage from more than one source usually private health insurance in combination with CHAMPUS or Medicaid Elderly persons had Medicare and private health insurance coverage most often (615 percent ofthls population) followed by Medicare and Medicaid (66 percent of the population)(Most persons covered by Medicare and Medicaid are institutionalized and therefore are not included in the CPS)

Health Care Financiq ReviewFaD 1992volume 14 Number 1 35

Table 3 Number and percent distribution of persons covered by insurance by age and type of coverage

United States 1991 Age of insured person

65 years of Type of insurance coverage Total years of age age or over

Persons in thousands

Total 248886 218793 300S3 Total insured 214167 184351 29816

Private only 153202 152284 918 Public only 32031 22781 9250

Medicare only 7781 1048 6733 Medicaid only 16743 16723 2JJ CHAMPUS only 3577 3532 44 Medicare and Medicaid 3019 1035 1985 Medicare and CHAMPUS 510 103 408 Medicaid and CHAMPUS 312 312 0 Medicare Medicaid and CHAMPUS 89 28 61

Private and public 28933 9285 19648 Private and Medicare 19543 1027 18516 Private and Medicaid 3316 3314 2 Private and CHAMPUS 4650 4613 37 Private Medicaid and Medicare 640 148 492 Private Medicaid and CHAMPUS 106 106 0 Private Medicare and CHAMPUS 644 65 578 Private Medicare Medicaid and CHAMPUS 34 11 23

Total uninsured 34719 34443 276

Percent distribution

Total 1000 1000 1000 Total insured 861 843 991

Private only 616 696 31 Public only 129 104 307

Medicare only 31 05 224 Medicaid only 67 76 01 CHAMPUS only 14 16 01 Medicare and Medicaid 12 05 68 Medicare and CHAMPUS 02 00 14 Medicaid and CHAMPUS 01 01 00 Medicare Medicaid and CHAMPUS 00 00 02

Private and public 116 42 653 Private and Medicare 79 05 615 Private and Medicaid 13 15 00 Private and CHAMPUS 19 21 01 Private Medicaid and Medicare 03 01 16 Private Medicaid and CHAMPUS 00 00 00 Private Medicare and CHAMPUS 03 00 19 Private Medicare Medicaid and CHAMPUS 00 00 01

Total uninsured 139 157 09

732 738 683 130 16 957 97 99 86

and former military

SOURCE US Bureau of the Census Current Population Survey 1991 tabulallons prepared byFu Associates Ud for the Health Care Financing Administration Office of the Actuary

Employer-sponsored private health insnrance

The main purpose of the CPS is to address on a monthly basis questions on employment and unemployment Throughout the CPS years the most consistently reported statistics were related to health insurance policy ownership of workers that is persons age 15 years or over who worked during the prior year In the 1991 CPS employers provided health insurance to 558 percent of the population 282 percent being

workers and 275 percent being dependents From 1980through 1991 there was a small

downward trend in the percent of the population covered by employeNponsored policies (Table 4) Using 1980-91 data excluding cover sheet children the nwnber of workers owning private health insurance policies rose by 36 million persons the number of covered dependents fell by 21 million The net effect was a 15-million increase in the number of people covered by employer-sponsored plans During this 12-year period employer coverage of workers and

Health Qlre Financln ReviewFalll992votume 14 Numlgtfr l 36

Table 4 Number and percent distribution of workers and their dependents with employer-sponsored health

insurance coverage United States 198091 Number in thousands covered by

Survey Population thousands

in

employer-sponsored heahh Insurance

Workers2 In Total Polley CoveredthOusands covered owners dependents3

Number including cover sheet children4

1991 248886 134325 138797 70251 69546 1990 246191 132730 140518 70923 69595 1969 243685 131370 139926 70221 69705 1988 241187 129181 139147 69254 69893

Number excluding cover sheet children4

1991 248886 134325 136691 70251 66441 1990 246191 132730 138354 70923 67431 1989 243685 131370 137936 70221 67715 1988 241187 129181 137410 69254 68156 1987 238789 126714 138510 71749 66761 1985 234066 122109 134257 68576 65681 1960 223160 116231 135157 66640 68517

Percent distribution including cover sheet children4

1991 1000 540 558 282 275 1990 1000 539 571 288 283 1989 1000 539 574 288 286 1988 1000 536 577 287 290

Percent distribution excluding cover sheet children4

1991 1000 540 549 282 267 1990 1000 539 562 288 274 1889 1000 539 566 288 278 1988 1000 536 570 287 283 1987 1000 531 580 300 280 1985 1000 522 574 293 281 1980 1000 521 606 299 307

Cumulative growth including cover sheet children4

1988--91 32 40 -03 14 -19

Cumulative growth excluding cover sheet children4

1980-91 115 156 11 54 -30 1Civlllan oon-institutionalized population In the United States and military personnelliYing outside mimary bases or on military bases with their families 2Persons who WOfked during the previous year Includes approximately 04 percent of workers who worked without pay3ooes not include policy owners Does not include persons covered as dependents of oon-working employer plan owners41n the 1988-91 wrveys addWonal questions covering health insurance stalus of children were asked This set of questions is relerred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

SOURCE US Bureau ofthe Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

dependents grew only 11 percent but the number of workers rose 156 percent and the population increased 115 percent In other words employers who have been responsible for providing health insurance to the nonshyaged population supplied a smaller share of insurance coverage to the population in 1991 than in 1980 If employers had supplied the same proportion of the population with insurance in 1991 as they did in 1980 an additionall2 million persons potentially equivalent to one-third of the total number of uninsured would have received insurance through this source

Coverage by industry

1991 CPS data show a distinct difference among industries in the percentage of workers owning employer-sponsored health insurance At one extreme industries such as mining manufacturing and transportation communications and public utilities provided coverage to 734-795 percent of their work

force (Table 5) At the low end agriculture forestry and fisheries construction retail trade business and personal services and the self-employed (in unincorporated businesses) were more modest in their work force coverage at 177 to 448 percent The degree of unionization and the prevalence of low-paying or part-time jobs determine in part the penetration of insurance coverage by industry

In 1980-91 the proportion of workers owning health insurance through their employers declined from 573 to 523 percentZ All industries except business and professional services and the self-employed contributed

2A discontinuily in the times series exists in that respondents to the 1988 and later CPSs could only report coverage by a single policy Persons with multiple coverages (medical coverage as a dependent spouse and dental coverage as an owner of an employer-sponsored policy) would only report coverage by a single policy most likely the one providing their primary care This change probably accounted for much of the )-percentage-point drop in the percentage of workerscovered from 1987 to 1988

Health care tlnanciD(I ReviewFall 1992volume 14Number 1 37

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

The most significant changes middotoccurred between the 1987 and 1988 versions of the survey These survey improvements minimized the magnitude of change in the proportion of the population with and without health insurance coverage as recorded in the 1980-91 surveys If the survey had been more consistent over time the trends would likely have been more pronounced than those reported here

The percent of Americans covered by private health insurance declined from 1980 to 1991 Because of discontinuities in the CPS time series we separate this time span into two periods 1980 through 1987 and 1988 through 1991 Despite a gain of 57 million persons covered by private health insurance during the first period the proportion of the population with private coverage declined from 738 to 714 percent The cumulative growth of 35 percent in private insurance coverage did not keep pace with the population increase of 70 percent

During the first period the Nation was emerging from recession The economy was recovering from a bout with general price inflation in 1980 and 1981 and continued price inflation for medical care that extended into 1983 (Donham Maple and Levit 1992) which affected business ability to provide increasingly expensive health benefits for workers (Kronick 1991) The industrial composition in the country was also changing rapidly with more jobs shifting from highshybenefit industries such as manufacturing to the service sector which is characterized by lower benefits The recession decreased the demand for labor particularly for factory workers as many businesses eliminated excess jobs Labor unions had little choice but to accept benefit and wage compromises (Plunkert 1990) Because most Americans received private coverage through employment these events reduced private health insurance coverage during the first half of the 1980s The proportion of Americans with private coverage reached a low of 709 percent in the 1985 CPS

From 1988 through 1991 the number of persons with private coverage remained fairly stable (using data including cover sheet children) despite population growth of 32 percent This produced a decline of 23 percentage points in the share of Americans with private coverage In the 1991 CPS alone the portion of the population with private coverage fell 14 percentage points-amounting to a loss in coverage for 33 million persons who would have received coverage had the share remained stable Based on the 1991 CPS the current recession appeared to have a similar impact on private health insurance coverage as it did in the early 1980s The extent of the impact will be more fully reported in the 1992 CPS

In these tabulations we report public program coverage defined as coverage through Medicare Medicaid or military and veterans programs From 1980 through 1982 public program coverage increased coinciding with the recession in the early 1980s that fostered rising unemployment and loss of private ~mployer-sponsored coverage Throughout the middle of the decade public programs covered a stable portion of the population-from 225 to 229 percent The

1991 CPS reports a larger proportion of the population covered by public programs than ever before The share increased 12 percentage points from 1990 through 1991 (including cover sheet children) because of major expansions in the Medicaid program

During the 1980-91 period the number of uninsured persons grew by 30 percent (excluding cover sheet children) while the population grew only It S percent For 1988 through 1991 alone the number of uninsured increased 119 percent (including cover sheet children) compared with population growth of 32 percent In 1991 139 percent of the population lacked any form of public or private coverage 1 percentage point more than in 1988 (including cover sheet children)

In summary the past 12 years of CPS data depict gradual changes in the health insurance structure in this Nation Although the number of persons covered by private health insurance increased it increased more slowly than the population Public programs particularly Medicare and Medicaid covered an increasing proportion of the population but failed to offset the decline in the population share covered from private sources This resulted in a rising proportion of the population without health insurance coverage a proportion that rose 22 percentage points over the last 12 years (excluding cover sheet children) and 10 percentage point in the last 4 years (including cover sheet children)

Coverage for aged and non-aged

The aged (persons 65 years of age or over) and nonshyaged populations have distinctly different sources of health insurance coverage The non-aged population traditionally received coverage through private health insurance (738 percent in the 1991 CPS including cover sheet children) while public programs provided only a small portion (146 percent) of coverage (derived from Table 2) Only 42 percent of the non-aged population received coverage from both public and private sources in the 1991 CPS mostly through private health insurance in combination with CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) or Medicaid Most of the uninsured population are non-aged because Medicare almost universally covers the aged

For the aged population health insurance coverage was obtained predominantly through a combination of public and private programs with 960 percent reporting coverage by public programs In the 1991 CPS 653 percent of the aged had both public and private coverage of these almost all had Medicare supplemented by a private health insurance policy Public programs alone (usually Medicare alone or in combination with other public programs such as Medicaid) covered 307 percent of the aged population (Table 3) Less than I percent of all persons age 65 years or over could not identify any form of health insurance coverage on the CPS

Citing the same caveats as for Table 1 that minimize the trends the 1980-91 surveys record a distinct loss in the share of the non-aged population covered by private

Healtb Care Fl~taltcinamp Re11iewFa111992Volume 14 Number 1 34

Table 2 Percent distribution of aged and non-aged Insured persons by source of Insurance and percent of

persons uninsured United States 1980middot91 Percent distribution of persons insured by

Percent of Private insurance Survey Population1 All Private health Public and public year in thousands sources insurance only programs only programs uninsured

Non-aged2 persons Including cover sheet children3

1991 218793 843 696 104 42 157 1990 216625 847 713 92 42 153 1969 214663 849 714 94 42 151 1988 212700 856 720 94 42 144

Nonmiddotaged2 persons excluding cover sheet chitdren3

1991 218793 820 682 105 33 180 1990 216625 826 699 95 32 174 1989 214663 830 701 97 32 170 1988 212700 838 708 97 33 162 1987 210814 824 693 97 34 176 1986 209427 824 692 98 34 176 1985 207248 822 691 97 34 178 1984 205561 830 699 97 33 170 1983 203849 840 707 96 37 160 1982 202143 848 711 93 44 152 1981 200556 NA NA NA NA NA 1960 198966 851 727 87 37 149

Persons 65 years of age or over 1991 30093 991 31 307 653 09 1960 29566 990 31 313 645 10 1989 29022 991 32 307 652 09 1988 28487 989 26 263 680 11 1987 27975 989 24 376 569 11 1986 27322 990 23 363 564 10 1985 26818 990 26 402 562 10 1984 26291 989 26 401 562 11 1983 25738 967 26 429 533 13 1982 25231 969 24 448 517 11 1981 24886 NA NA NA NA NA 1960 24194 966 47 441 477 34 1CMIIan nonmiddotinstilulionalized population in the United States and military personnalliving outside military bases or on military bases with their families 2persons 0-64 years of age 3tn the 1986-91 surveys additional questions concaming health insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to thEIIOe questions resulted in additional children being assigned health insurartee coverage

NOTES PUbliC programs indicate coverage by Medicare Medicaid andor CHAMPUS NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Cummt Population SuiYEiy 1980-91 tabulations prepared by Fu Associates Ltd lot the Health Cere Financing AdminiSifation Office of the Actuary

health insurance Public programs picked up some of this loss over the time span but not enough to prevent the growth of the share of the non-aged population without any coverage The share of the non-aged population without coverage increased by 27 percentage points (excluding cover sheet children) from 1980 to 1987 and by 13 percentage points (including cover sheet children from 1988 to 1991

For the aged population the 19821 through 1991 CPS results showed little change in the share of the population insured and uninsured Virtually all elderly persons received coverage through Medicare The proportion of aged persons supplementing their Medicare coverage with independently purchased

11980 data are not used because the CPS Medicare population increased by almost twice the number of persons from 1980 to 1982 as indicated by program data Part of the explanation for this difference may be linked to changes in the weighting process in the 1982 CPS These changes included the introduction of independent race category controls and of the 1980 census population weights

private health insurance also appeared to grow from the 1980 through 1987 CPS years This proportion has remained stable for 1989-91

In the 1991 CPS 132 percent of the population was covered by more than one type of insurance that is by private insurance Medicare Medicaid or CHAMPUS (derived from Table 3) Multiple coverage was more prevalent for the elderly with 734 percent of that cohort receiving coverage from two or more of these sources For the non-elderly population only 49 percent received coverage from more than one source usually private health insurance in combination with CHAMPUS or Medicaid Elderly persons had Medicare and private health insurance coverage most often (615 percent ofthls population) followed by Medicare and Medicaid (66 percent of the population)(Most persons covered by Medicare and Medicaid are institutionalized and therefore are not included in the CPS)

Health Care Financiq ReviewFaD 1992volume 14 Number 1 35

Table 3 Number and percent distribution of persons covered by insurance by age and type of coverage

United States 1991 Age of insured person

65 years of Type of insurance coverage Total years of age age or over

Persons in thousands

Total 248886 218793 300S3 Total insured 214167 184351 29816

Private only 153202 152284 918 Public only 32031 22781 9250

Medicare only 7781 1048 6733 Medicaid only 16743 16723 2JJ CHAMPUS only 3577 3532 44 Medicare and Medicaid 3019 1035 1985 Medicare and CHAMPUS 510 103 408 Medicaid and CHAMPUS 312 312 0 Medicare Medicaid and CHAMPUS 89 28 61

Private and public 28933 9285 19648 Private and Medicare 19543 1027 18516 Private and Medicaid 3316 3314 2 Private and CHAMPUS 4650 4613 37 Private Medicaid and Medicare 640 148 492 Private Medicaid and CHAMPUS 106 106 0 Private Medicare and CHAMPUS 644 65 578 Private Medicare Medicaid and CHAMPUS 34 11 23

Total uninsured 34719 34443 276

Percent distribution

Total 1000 1000 1000 Total insured 861 843 991

Private only 616 696 31 Public only 129 104 307

Medicare only 31 05 224 Medicaid only 67 76 01 CHAMPUS only 14 16 01 Medicare and Medicaid 12 05 68 Medicare and CHAMPUS 02 00 14 Medicaid and CHAMPUS 01 01 00 Medicare Medicaid and CHAMPUS 00 00 02

Private and public 116 42 653 Private and Medicare 79 05 615 Private and Medicaid 13 15 00 Private and CHAMPUS 19 21 01 Private Medicaid and Medicare 03 01 16 Private Medicaid and CHAMPUS 00 00 00 Private Medicare and CHAMPUS 03 00 19 Private Medicare Medicaid and CHAMPUS 00 00 01

Total uninsured 139 157 09

732 738 683 130 16 957 97 99 86

and former military

SOURCE US Bureau of the Census Current Population Survey 1991 tabulallons prepared byFu Associates Ud for the Health Care Financing Administration Office of the Actuary

Employer-sponsored private health insnrance

The main purpose of the CPS is to address on a monthly basis questions on employment and unemployment Throughout the CPS years the most consistently reported statistics were related to health insurance policy ownership of workers that is persons age 15 years or over who worked during the prior year In the 1991 CPS employers provided health insurance to 558 percent of the population 282 percent being

workers and 275 percent being dependents From 1980through 1991 there was a small

downward trend in the percent of the population covered by employeNponsored policies (Table 4) Using 1980-91 data excluding cover sheet children the nwnber of workers owning private health insurance policies rose by 36 million persons the number of covered dependents fell by 21 million The net effect was a 15-million increase in the number of people covered by employer-sponsored plans During this 12-year period employer coverage of workers and

Health Qlre Financln ReviewFalll992votume 14 Numlgtfr l 36

Table 4 Number and percent distribution of workers and their dependents with employer-sponsored health

insurance coverage United States 198091 Number in thousands covered by

Survey Population thousands

in

employer-sponsored heahh Insurance

Workers2 In Total Polley CoveredthOusands covered owners dependents3

Number including cover sheet children4

1991 248886 134325 138797 70251 69546 1990 246191 132730 140518 70923 69595 1969 243685 131370 139926 70221 69705 1988 241187 129181 139147 69254 69893

Number excluding cover sheet children4

1991 248886 134325 136691 70251 66441 1990 246191 132730 138354 70923 67431 1989 243685 131370 137936 70221 67715 1988 241187 129181 137410 69254 68156 1987 238789 126714 138510 71749 66761 1985 234066 122109 134257 68576 65681 1960 223160 116231 135157 66640 68517

Percent distribution including cover sheet children4

1991 1000 540 558 282 275 1990 1000 539 571 288 283 1989 1000 539 574 288 286 1988 1000 536 577 287 290

Percent distribution excluding cover sheet children4

1991 1000 540 549 282 267 1990 1000 539 562 288 274 1889 1000 539 566 288 278 1988 1000 536 570 287 283 1987 1000 531 580 300 280 1985 1000 522 574 293 281 1980 1000 521 606 299 307

Cumulative growth including cover sheet children4

1988--91 32 40 -03 14 -19

Cumulative growth excluding cover sheet children4

1980-91 115 156 11 54 -30 1Civlllan oon-institutionalized population In the United States and military personnelliYing outside mimary bases or on military bases with their families 2Persons who WOfked during the previous year Includes approximately 04 percent of workers who worked without pay3ooes not include policy owners Does not include persons covered as dependents of oon-working employer plan owners41n the 1988-91 wrveys addWonal questions covering health insurance stalus of children were asked This set of questions is relerred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

SOURCE US Bureau ofthe Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

dependents grew only 11 percent but the number of workers rose 156 percent and the population increased 115 percent In other words employers who have been responsible for providing health insurance to the nonshyaged population supplied a smaller share of insurance coverage to the population in 1991 than in 1980 If employers had supplied the same proportion of the population with insurance in 1991 as they did in 1980 an additionall2 million persons potentially equivalent to one-third of the total number of uninsured would have received insurance through this source

Coverage by industry

1991 CPS data show a distinct difference among industries in the percentage of workers owning employer-sponsored health insurance At one extreme industries such as mining manufacturing and transportation communications and public utilities provided coverage to 734-795 percent of their work

force (Table 5) At the low end agriculture forestry and fisheries construction retail trade business and personal services and the self-employed (in unincorporated businesses) were more modest in their work force coverage at 177 to 448 percent The degree of unionization and the prevalence of low-paying or part-time jobs determine in part the penetration of insurance coverage by industry

In 1980-91 the proportion of workers owning health insurance through their employers declined from 573 to 523 percentZ All industries except business and professional services and the self-employed contributed

2A discontinuily in the times series exists in that respondents to the 1988 and later CPSs could only report coverage by a single policy Persons with multiple coverages (medical coverage as a dependent spouse and dental coverage as an owner of an employer-sponsored policy) would only report coverage by a single policy most likely the one providing their primary care This change probably accounted for much of the )-percentage-point drop in the percentage of workerscovered from 1987 to 1988

Health care tlnanciD(I ReviewFall 1992volume 14Number 1 37

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Table 2 Percent distribution of aged and non-aged Insured persons by source of Insurance and percent of

persons uninsured United States 1980middot91 Percent distribution of persons insured by

Percent of Private insurance Survey Population1 All Private health Public and public year in thousands sources insurance only programs only programs uninsured

Non-aged2 persons Including cover sheet children3

1991 218793 843 696 104 42 157 1990 216625 847 713 92 42 153 1969 214663 849 714 94 42 151 1988 212700 856 720 94 42 144

Nonmiddotaged2 persons excluding cover sheet chitdren3

1991 218793 820 682 105 33 180 1990 216625 826 699 95 32 174 1989 214663 830 701 97 32 170 1988 212700 838 708 97 33 162 1987 210814 824 693 97 34 176 1986 209427 824 692 98 34 176 1985 207248 822 691 97 34 178 1984 205561 830 699 97 33 170 1983 203849 840 707 96 37 160 1982 202143 848 711 93 44 152 1981 200556 NA NA NA NA NA 1960 198966 851 727 87 37 149

Persons 65 years of age or over 1991 30093 991 31 307 653 09 1960 29566 990 31 313 645 10 1989 29022 991 32 307 652 09 1988 28487 989 26 263 680 11 1987 27975 989 24 376 569 11 1986 27322 990 23 363 564 10 1985 26818 990 26 402 562 10 1984 26291 989 26 401 562 11 1983 25738 967 26 429 533 13 1982 25231 969 24 448 517 11 1981 24886 NA NA NA NA NA 1960 24194 966 47 441 477 34 1CMIIan nonmiddotinstilulionalized population in the United States and military personnalliving outside military bases or on military bases with their families 2persons 0-64 years of age 3tn the 1986-91 surveys additional questions concaming health insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to thEIIOe questions resulted in additional children being assigned health insurartee coverage

NOTES PUbliC programs indicate coverage by Medicare Medicaid andor CHAMPUS NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Cummt Population SuiYEiy 1980-91 tabulations prepared by Fu Associates Ltd lot the Health Cere Financing AdminiSifation Office of the Actuary

health insurance Public programs picked up some of this loss over the time span but not enough to prevent the growth of the share of the non-aged population without any coverage The share of the non-aged population without coverage increased by 27 percentage points (excluding cover sheet children) from 1980 to 1987 and by 13 percentage points (including cover sheet children from 1988 to 1991

For the aged population the 19821 through 1991 CPS results showed little change in the share of the population insured and uninsured Virtually all elderly persons received coverage through Medicare The proportion of aged persons supplementing their Medicare coverage with independently purchased

11980 data are not used because the CPS Medicare population increased by almost twice the number of persons from 1980 to 1982 as indicated by program data Part of the explanation for this difference may be linked to changes in the weighting process in the 1982 CPS These changes included the introduction of independent race category controls and of the 1980 census population weights

private health insurance also appeared to grow from the 1980 through 1987 CPS years This proportion has remained stable for 1989-91

In the 1991 CPS 132 percent of the population was covered by more than one type of insurance that is by private insurance Medicare Medicaid or CHAMPUS (derived from Table 3) Multiple coverage was more prevalent for the elderly with 734 percent of that cohort receiving coverage from two or more of these sources For the non-elderly population only 49 percent received coverage from more than one source usually private health insurance in combination with CHAMPUS or Medicaid Elderly persons had Medicare and private health insurance coverage most often (615 percent ofthls population) followed by Medicare and Medicaid (66 percent of the population)(Most persons covered by Medicare and Medicaid are institutionalized and therefore are not included in the CPS)

Health Care Financiq ReviewFaD 1992volume 14 Number 1 35

Table 3 Number and percent distribution of persons covered by insurance by age and type of coverage

United States 1991 Age of insured person

65 years of Type of insurance coverage Total years of age age or over

Persons in thousands

Total 248886 218793 300S3 Total insured 214167 184351 29816

Private only 153202 152284 918 Public only 32031 22781 9250

Medicare only 7781 1048 6733 Medicaid only 16743 16723 2JJ CHAMPUS only 3577 3532 44 Medicare and Medicaid 3019 1035 1985 Medicare and CHAMPUS 510 103 408 Medicaid and CHAMPUS 312 312 0 Medicare Medicaid and CHAMPUS 89 28 61

Private and public 28933 9285 19648 Private and Medicare 19543 1027 18516 Private and Medicaid 3316 3314 2 Private and CHAMPUS 4650 4613 37 Private Medicaid and Medicare 640 148 492 Private Medicaid and CHAMPUS 106 106 0 Private Medicare and CHAMPUS 644 65 578 Private Medicare Medicaid and CHAMPUS 34 11 23

Total uninsured 34719 34443 276

Percent distribution

Total 1000 1000 1000 Total insured 861 843 991

Private only 616 696 31 Public only 129 104 307

Medicare only 31 05 224 Medicaid only 67 76 01 CHAMPUS only 14 16 01 Medicare and Medicaid 12 05 68 Medicare and CHAMPUS 02 00 14 Medicaid and CHAMPUS 01 01 00 Medicare Medicaid and CHAMPUS 00 00 02

Private and public 116 42 653 Private and Medicare 79 05 615 Private and Medicaid 13 15 00 Private and CHAMPUS 19 21 01 Private Medicaid and Medicare 03 01 16 Private Medicaid and CHAMPUS 00 00 00 Private Medicare and CHAMPUS 03 00 19 Private Medicare Medicaid and CHAMPUS 00 00 01

Total uninsured 139 157 09

732 738 683 130 16 957 97 99 86

and former military

SOURCE US Bureau of the Census Current Population Survey 1991 tabulallons prepared byFu Associates Ud for the Health Care Financing Administration Office of the Actuary

Employer-sponsored private health insnrance

The main purpose of the CPS is to address on a monthly basis questions on employment and unemployment Throughout the CPS years the most consistently reported statistics were related to health insurance policy ownership of workers that is persons age 15 years or over who worked during the prior year In the 1991 CPS employers provided health insurance to 558 percent of the population 282 percent being

workers and 275 percent being dependents From 1980through 1991 there was a small

downward trend in the percent of the population covered by employeNponsored policies (Table 4) Using 1980-91 data excluding cover sheet children the nwnber of workers owning private health insurance policies rose by 36 million persons the number of covered dependents fell by 21 million The net effect was a 15-million increase in the number of people covered by employer-sponsored plans During this 12-year period employer coverage of workers and

Health Qlre Financln ReviewFalll992votume 14 Numlgtfr l 36

Table 4 Number and percent distribution of workers and their dependents with employer-sponsored health

insurance coverage United States 198091 Number in thousands covered by

Survey Population thousands

in

employer-sponsored heahh Insurance

Workers2 In Total Polley CoveredthOusands covered owners dependents3

Number including cover sheet children4

1991 248886 134325 138797 70251 69546 1990 246191 132730 140518 70923 69595 1969 243685 131370 139926 70221 69705 1988 241187 129181 139147 69254 69893

Number excluding cover sheet children4

1991 248886 134325 136691 70251 66441 1990 246191 132730 138354 70923 67431 1989 243685 131370 137936 70221 67715 1988 241187 129181 137410 69254 68156 1987 238789 126714 138510 71749 66761 1985 234066 122109 134257 68576 65681 1960 223160 116231 135157 66640 68517

Percent distribution including cover sheet children4

1991 1000 540 558 282 275 1990 1000 539 571 288 283 1989 1000 539 574 288 286 1988 1000 536 577 287 290

Percent distribution excluding cover sheet children4

1991 1000 540 549 282 267 1990 1000 539 562 288 274 1889 1000 539 566 288 278 1988 1000 536 570 287 283 1987 1000 531 580 300 280 1985 1000 522 574 293 281 1980 1000 521 606 299 307

Cumulative growth including cover sheet children4

1988--91 32 40 -03 14 -19

Cumulative growth excluding cover sheet children4

1980-91 115 156 11 54 -30 1Civlllan oon-institutionalized population In the United States and military personnelliYing outside mimary bases or on military bases with their families 2Persons who WOfked during the previous year Includes approximately 04 percent of workers who worked without pay3ooes not include policy owners Does not include persons covered as dependents of oon-working employer plan owners41n the 1988-91 wrveys addWonal questions covering health insurance stalus of children were asked This set of questions is relerred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

SOURCE US Bureau ofthe Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

dependents grew only 11 percent but the number of workers rose 156 percent and the population increased 115 percent In other words employers who have been responsible for providing health insurance to the nonshyaged population supplied a smaller share of insurance coverage to the population in 1991 than in 1980 If employers had supplied the same proportion of the population with insurance in 1991 as they did in 1980 an additionall2 million persons potentially equivalent to one-third of the total number of uninsured would have received insurance through this source

Coverage by industry

1991 CPS data show a distinct difference among industries in the percentage of workers owning employer-sponsored health insurance At one extreme industries such as mining manufacturing and transportation communications and public utilities provided coverage to 734-795 percent of their work

force (Table 5) At the low end agriculture forestry and fisheries construction retail trade business and personal services and the self-employed (in unincorporated businesses) were more modest in their work force coverage at 177 to 448 percent The degree of unionization and the prevalence of low-paying or part-time jobs determine in part the penetration of insurance coverage by industry

In 1980-91 the proportion of workers owning health insurance through their employers declined from 573 to 523 percentZ All industries except business and professional services and the self-employed contributed

2A discontinuily in the times series exists in that respondents to the 1988 and later CPSs could only report coverage by a single policy Persons with multiple coverages (medical coverage as a dependent spouse and dental coverage as an owner of an employer-sponsored policy) would only report coverage by a single policy most likely the one providing their primary care This change probably accounted for much of the )-percentage-point drop in the percentage of workerscovered from 1987 to 1988

Health care tlnanciD(I ReviewFall 1992volume 14Number 1 37

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Table 3 Number and percent distribution of persons covered by insurance by age and type of coverage

United States 1991 Age of insured person

65 years of Type of insurance coverage Total years of age age or over

Persons in thousands

Total 248886 218793 300S3 Total insured 214167 184351 29816

Private only 153202 152284 918 Public only 32031 22781 9250

Medicare only 7781 1048 6733 Medicaid only 16743 16723 2JJ CHAMPUS only 3577 3532 44 Medicare and Medicaid 3019 1035 1985 Medicare and CHAMPUS 510 103 408 Medicaid and CHAMPUS 312 312 0 Medicare Medicaid and CHAMPUS 89 28 61

Private and public 28933 9285 19648 Private and Medicare 19543 1027 18516 Private and Medicaid 3316 3314 2 Private and CHAMPUS 4650 4613 37 Private Medicaid and Medicare 640 148 492 Private Medicaid and CHAMPUS 106 106 0 Private Medicare and CHAMPUS 644 65 578 Private Medicare Medicaid and CHAMPUS 34 11 23

Total uninsured 34719 34443 276

Percent distribution

Total 1000 1000 1000 Total insured 861 843 991

Private only 616 696 31 Public only 129 104 307

Medicare only 31 05 224 Medicaid only 67 76 01 CHAMPUS only 14 16 01 Medicare and Medicaid 12 05 68 Medicare and CHAMPUS 02 00 14 Medicaid and CHAMPUS 01 01 00 Medicare Medicaid and CHAMPUS 00 00 02

Private and public 116 42 653 Private and Medicare 79 05 615 Private and Medicaid 13 15 00 Private and CHAMPUS 19 21 01 Private Medicaid and Medicare 03 01 16 Private Medicaid and CHAMPUS 00 00 00 Private Medicare and CHAMPUS 03 00 19 Private Medicare Medicaid and CHAMPUS 00 00 01

Total uninsured 139 157 09

732 738 683 130 16 957 97 99 86

and former military

SOURCE US Bureau of the Census Current Population Survey 1991 tabulallons prepared byFu Associates Ud for the Health Care Financing Administration Office of the Actuary

Employer-sponsored private health insnrance

The main purpose of the CPS is to address on a monthly basis questions on employment and unemployment Throughout the CPS years the most consistently reported statistics were related to health insurance policy ownership of workers that is persons age 15 years or over who worked during the prior year In the 1991 CPS employers provided health insurance to 558 percent of the population 282 percent being

workers and 275 percent being dependents From 1980through 1991 there was a small

downward trend in the percent of the population covered by employeNponsored policies (Table 4) Using 1980-91 data excluding cover sheet children the nwnber of workers owning private health insurance policies rose by 36 million persons the number of covered dependents fell by 21 million The net effect was a 15-million increase in the number of people covered by employer-sponsored plans During this 12-year period employer coverage of workers and

Health Qlre Financln ReviewFalll992votume 14 Numlgtfr l 36

Table 4 Number and percent distribution of workers and their dependents with employer-sponsored health

insurance coverage United States 198091 Number in thousands covered by

Survey Population thousands

in

employer-sponsored heahh Insurance

Workers2 In Total Polley CoveredthOusands covered owners dependents3

Number including cover sheet children4

1991 248886 134325 138797 70251 69546 1990 246191 132730 140518 70923 69595 1969 243685 131370 139926 70221 69705 1988 241187 129181 139147 69254 69893

Number excluding cover sheet children4

1991 248886 134325 136691 70251 66441 1990 246191 132730 138354 70923 67431 1989 243685 131370 137936 70221 67715 1988 241187 129181 137410 69254 68156 1987 238789 126714 138510 71749 66761 1985 234066 122109 134257 68576 65681 1960 223160 116231 135157 66640 68517

Percent distribution including cover sheet children4

1991 1000 540 558 282 275 1990 1000 539 571 288 283 1989 1000 539 574 288 286 1988 1000 536 577 287 290

Percent distribution excluding cover sheet children4

1991 1000 540 549 282 267 1990 1000 539 562 288 274 1889 1000 539 566 288 278 1988 1000 536 570 287 283 1987 1000 531 580 300 280 1985 1000 522 574 293 281 1980 1000 521 606 299 307

Cumulative growth including cover sheet children4

1988--91 32 40 -03 14 -19

Cumulative growth excluding cover sheet children4

1980-91 115 156 11 54 -30 1Civlllan oon-institutionalized population In the United States and military personnelliYing outside mimary bases or on military bases with their families 2Persons who WOfked during the previous year Includes approximately 04 percent of workers who worked without pay3ooes not include policy owners Does not include persons covered as dependents of oon-working employer plan owners41n the 1988-91 wrveys addWonal questions covering health insurance stalus of children were asked This set of questions is relerred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

SOURCE US Bureau ofthe Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

dependents grew only 11 percent but the number of workers rose 156 percent and the population increased 115 percent In other words employers who have been responsible for providing health insurance to the nonshyaged population supplied a smaller share of insurance coverage to the population in 1991 than in 1980 If employers had supplied the same proportion of the population with insurance in 1991 as they did in 1980 an additionall2 million persons potentially equivalent to one-third of the total number of uninsured would have received insurance through this source

Coverage by industry

1991 CPS data show a distinct difference among industries in the percentage of workers owning employer-sponsored health insurance At one extreme industries such as mining manufacturing and transportation communications and public utilities provided coverage to 734-795 percent of their work

force (Table 5) At the low end agriculture forestry and fisheries construction retail trade business and personal services and the self-employed (in unincorporated businesses) were more modest in their work force coverage at 177 to 448 percent The degree of unionization and the prevalence of low-paying or part-time jobs determine in part the penetration of insurance coverage by industry

In 1980-91 the proportion of workers owning health insurance through their employers declined from 573 to 523 percentZ All industries except business and professional services and the self-employed contributed

2A discontinuily in the times series exists in that respondents to the 1988 and later CPSs could only report coverage by a single policy Persons with multiple coverages (medical coverage as a dependent spouse and dental coverage as an owner of an employer-sponsored policy) would only report coverage by a single policy most likely the one providing their primary care This change probably accounted for much of the )-percentage-point drop in the percentage of workerscovered from 1987 to 1988

Health care tlnanciD(I ReviewFall 1992volume 14Number 1 37

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Table 4 Number and percent distribution of workers and their dependents with employer-sponsored health

insurance coverage United States 198091 Number in thousands covered by

Survey Population thousands

in

employer-sponsored heahh Insurance

Workers2 In Total Polley CoveredthOusands covered owners dependents3

Number including cover sheet children4

1991 248886 134325 138797 70251 69546 1990 246191 132730 140518 70923 69595 1969 243685 131370 139926 70221 69705 1988 241187 129181 139147 69254 69893

Number excluding cover sheet children4

1991 248886 134325 136691 70251 66441 1990 246191 132730 138354 70923 67431 1989 243685 131370 137936 70221 67715 1988 241187 129181 137410 69254 68156 1987 238789 126714 138510 71749 66761 1985 234066 122109 134257 68576 65681 1960 223160 116231 135157 66640 68517

Percent distribution including cover sheet children4

1991 1000 540 558 282 275 1990 1000 539 571 288 283 1989 1000 539 574 288 286 1988 1000 536 577 287 290

Percent distribution excluding cover sheet children4

1991 1000 540 549 282 267 1990 1000 539 562 288 274 1889 1000 539 566 288 278 1988 1000 536 570 287 283 1987 1000 531 580 300 280 1985 1000 522 574 293 281 1980 1000 521 606 299 307

Cumulative growth including cover sheet children4

1988--91 32 40 -03 14 -19

Cumulative growth excluding cover sheet children4

1980-91 115 156 11 54 -30 1Civlllan oon-institutionalized population In the United States and military personnelliYing outside mimary bases or on military bases with their families 2Persons who WOfked during the previous year Includes approximately 04 percent of workers who worked without pay3ooes not include policy owners Does not include persons covered as dependents of oon-working employer plan owners41n the 1988-91 wrveys addWonal questions covering health insurance stalus of children were asked This set of questions is relerred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage

SOURCE US Bureau ofthe Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

dependents grew only 11 percent but the number of workers rose 156 percent and the population increased 115 percent In other words employers who have been responsible for providing health insurance to the nonshyaged population supplied a smaller share of insurance coverage to the population in 1991 than in 1980 If employers had supplied the same proportion of the population with insurance in 1991 as they did in 1980 an additionall2 million persons potentially equivalent to one-third of the total number of uninsured would have received insurance through this source

Coverage by industry

1991 CPS data show a distinct difference among industries in the percentage of workers owning employer-sponsored health insurance At one extreme industries such as mining manufacturing and transportation communications and public utilities provided coverage to 734-795 percent of their work

force (Table 5) At the low end agriculture forestry and fisheries construction retail trade business and personal services and the self-employed (in unincorporated businesses) were more modest in their work force coverage at 177 to 448 percent The degree of unionization and the prevalence of low-paying or part-time jobs determine in part the penetration of insurance coverage by industry

In 1980-91 the proportion of workers owning health insurance through their employers declined from 573 to 523 percentZ All industries except business and professional services and the self-employed contributed

2A discontinuily in the times series exists in that respondents to the 1988 and later CPSs could only report coverage by a single policy Persons with multiple coverages (medical coverage as a dependent spouse and dental coverage as an owner of an employer-sponsored policy) would only report coverage by a single policy most likely the one providing their primary care This change probably accounted for much of the )-percentage-point drop in the percentage of workerscovered from 1987 to 1988

Health care tlnanciD(I ReviewFall 1992volume 14Number 1 37

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

~

Table 5 Number and percent of workers owning employer-sponsored health Insurance coverage

by industry providing policy United States 1980middot91

Sultvey

Industry providing policy to own workers

Totaj2

AgricultUre forestry fisheries Mining Construction Manufacturing

Transportation Finance communication insurance

and public Wholesale Retail and real utilities trade Business personal services

Professional services Government

Self-employed unincorporated

Thousands

1991 1990 1868

70251 70923 70221

479 520 681

578 619

3011 3247 3171

16697 16993 17271

4909 3159 7127 4906 4905 2an 7348 5082 4888 3021 7136 5237

4745 4937 4507

8814 8590 8347

13823 13833 13537

1881 1890 1970

1988 69254 476 629 3068 17045 4898 3096 7313 5142 4272 8057 13346 1853 1987 1988 1985

71749 70478 68576

507 531 518

796 834

3326 3ZT7 3104

17944 18223 18213

4850 3266 7944 4936 4951 3217 7537 4891 4ns 3089 7210 4879

4625 4195 3948

8452 8137 7601

13468 13167 13116

1807 1422 1444

1984 67809 510 855 3177 17856 4851 3115 7266 4619 3752 7243 13091 1439 1983 67623 541 1022 3074 18657 4888 3256 6939 4340 3838 7285 12672 1457 1982 1991

68575 68090

493 446

1015 3170 3232

19427 19812

4762 3282 7222 4286 4726 3043 7137 4186

3403 3434

6934 6500

12916 13056

1590 1550

1980 66640 528 783 3213 19783 4663 2800 7175 3896 3029 6324 12960 1422

Percent of total industry workers

1991 523 208 795 448 748 734 666 321 853 389 541 666 177 1990 534 219 793 471 752 744 642 336 648 383 543 696 185 1969 535 203 761 470 755 748 676 327 680 358 540 694 1981988 536 200 818 478 760 742 671 339 685 351 544 697 184 1997 666 212 820 514 796 772 712 380 696 383 579 718 1691988 566 231 821 521 805 784 709 389 708 359 584 711 1541985 562 227 783 500 798 ns 698 387 692 354 574 711 157 1984 572 215 841 540 809 797 714 383 721 359 570 710 1561993 577 230 834 566 824 805 723 379 718 356 569 711 1591992 582 219 841 566 820 820 714 388 701 358 565 700 177 1991 583 217 843 583 815 811 745 386 893 370 545 696 181 1990 573 247 850 552 807 813 715 386 675 349 542 691 162

Difference in percent of workers covered

1980-91 -50 -39 -55 -104 -59 -79 -59 -65 -22 21 -01 -25 15

f bull bull bullbull bullbull l ~

f ~ - _ z bull

11ndustl) in which individual held job for the longest period during year prior to the survey 2Tolal Includes approximately 004 percent of employer-sponsored policy owners ool counted by lndustl) who work without pay SOURCE US Bureau of the Census Current Population SUfVEIY 1980-91 labulations prepared by Fu Associates Ud for the Health Care Financing Administration Office of the ActUBfY

shy

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

to this decline (These two industries were already among the lowest industries in 1980 in percent of industry workers owning employer-sponsored policies)

Although the exact reasons for this decline are unknown we can speculate on causes First as the cost of health insurance rose many employers who previously provided free coverage to workers initiated premium cost sharing Households where both spouses worked and owned policies may have chosen to drop one policy particularly if the remaining policy covered other dependents This situation allows the worker dropping coverage to be picked up at no additional cost under the spouses plan Second other workers in low-paying jobs could not afford required premiums or chose to bear the financiaJ risk themselves rather than pay even a smaJl premium Third as already mentioned the distribution of workers shifted away from industries that provided coverage to a large proportion of their workers toward industries that covered a smaller proportion

To illustrate the industry shift effects if the percent distribution of workers in 1991 had been identical to that in 1980 then 14 million additionaJ workers would have been covered by their employers in 1991 than actually were If the 1988 percent of workers owning coverage in each industry were also used 32 million additionaJ workers would have been covered These examples illustrate the effect of industry shifts alone and of industry shifts in combination with the decline in the percentage of workers owning coverage from their own employers These shifts together produced a 45-percent reduction in the number of workers owning employer-sponsored coverage from 1988 through 1991

Workers who are not owners of their own employershysponsored policies may be covered as dependents under a spouses employer-sponsored plan This occurs most frequently when a policy provided to one spouse contains richer benefits is made available at lower cost or contains specific benefits desired by the household In other cases one spouse may work part time and aJthough a worker may not qualify for participation in the employer-sponsored plan or may qualify but have to pay a large portion of the premium

In either of these cases policies provided by one industry subsidize worker benefits in another industry The cross-subsidization among industries increases the expenses of the policy-supplying industry and reduces them for the non-policy-supplying industry These cross-subsidizations affect an industrys expenses prices charged for its services and products and potentially its ability to compete in the marketplace

The easiest way to examine these effects by industry is to calculate the percentage of industry workers with employer-sponsored health insurance from their own employer as a share of industry workers with any employer-sponsored coverage regardless of source In the 1991 CPS industries in aggregate supplied 755 percent of employer-sponsored coverage to workers through their own policies (Table 6) The remaining 245 percent of workers received employershysponsored coverage as a dependent through someone elses policy Eight out of 12 industries approximate or

exceed the US average in the percent of workers covered by employer-sponsored policies in their own industries Three industries (agriculture forestry and fisheries retail trade and business and personal services) and the self-employed provided a substantially smaller proportion of coverage to their own workers than the US average In essence the workers in the latter four industries were being subsidized for health insurance benefits by the remaining industries

Some policymakers have proposed that all industries be required to provide health insurance benefits to their own workers who work more than 17 hours per week This proposal would increase industry expenses associated with employee compensation in some industries and reduce it in others Some have suggested that such proposaJs would force employers in industries providing a disproportionately small share of employershysponsored coverage to reduce their number of workers in order to maintain expense levels and ability to compete Some speculate that these employers could be forced out of business because they could not cover this additionaJ expense without raising product or service prices which could affect their competitiveness

Coverage by firm size

Table 7 describes the work force with employershysponsored health insurance by size of firm as reported in the 1991 CPS The work force can be divided roughly into thirds by size of firm 306 percent work in firms with fewer than 25 workers 320 percent work in firms with 25 to 999 workers and 374 percent work in firms with 1000 or more workers

Workers in the smallest firms were least likely to own coverage from their employer In companies with fewer than 25 employees only 268 percent were covered

Table 6 Percent of workers with employer-sponsored

health Insurance from own employer as a share of workers with employer-sponsored coverage1 from any source by Industry

United States 1991 Industry of employmenf Percent

Total 755 Agriculture forestry and fisheries 526 Mining 935 Construction 761 Manufacturing 900 Transportation communication and public

utilities 905 Wholesale trade 830 Retail trade 550 Finance Insurance and real estate 798 Business and personal services 642 Professional services 722 Government 841 SeN-employed unincorporated 428 11ncludes employees with coverage as a dependent through someone elses employer-based plan21ndustry in which individual held job for the longest period during year prior to lhe survey

SOURCE US Bureau of the Census Cvrrent Population Survey 198()91 tabulations prepared by Fu AsSOCiates Ltd for the Health Care Financing Adminislration Office of the Aclu8fY

Heallh Care Fioanciog ReYiewFa111J92volume 14 Number 1 39

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Table 7 Number and percent workers owning employer-sponsored health insurance by size of firm

United States 1991 Number of workers at firm 1

Fewer than 1000 Statistic Total 25 25-99 10ltgt499 5(10599 or more

Number of workers (in thousands) 134325 41059 17206 18697 7145 50219

Percent distribution 1000 306 128 139 53 374 Percent of workers owning employer-sponsored policies 523 268 518 630 673 672 Percent of workers with any insurance coverage Percent uninsured

847 153

755 245

813 187

879 121

908 92

914

bullbullbull 1Number of people working at the same locetlon as the survey respondent SOURCE US Bureau of the Census Current PopuJallon Survey 1991 tabulations ptepared by Fu Associates Ud lor the Health Cafe Financing Administration Office of the Actuary

directly However another 487 percent of workers found health insurance through some other sourceshyeither as a dependent under someone elses employershysponsored plan as an owner or dependent under an individually purchased plan or under a public program such as Medicaid In the largest ftrms 672 percent of workers were covered by their own employer-sponsored plan and another 242 percent obtained coverage from another source The prevalence of coverage in the largest firms produced the lowest percentage of uninsured workers-86 percent in firms with I 000 or more compared with 245 percent in firms with fewer than 25 workers Although not directly reported Table 7 hints at the cross-subsidization in health insurance of small firms by large ones

The likelihood of having insurance coverage by size of firm and by industrial sector is closely linked Industries such as retail trade and services where the percent of workers covered through employer policies is slight were usually dominated by firms with fewer than 25 workers Similarly industries such as manufacturing and transportation communications and public utilities where the penetration of employer-sponsored policies is more extensive also tend to be large firms

Employer-sponsored coverage of non-workers

In addition to coverage of workers through employer-sponsored plans non-workers may obtain coverage through a former employer Non-working respondents to the CPS had the opportunity to respond to questions concerning employer-sponsored policy ownership beginning in 1988

In the 1988 through 1991 CPS slightly less than 5 percent of the population received coverage as nonshyworkers or as dependents of non-workers through employer-sponsored plans (Table 8) Of the non-working plan owners 9 out of every 10 were age 55 years or over indicating strongly that these policies predominantly cover retirees Less than 10 percent were persons under 55 years of age some of whom were persons retiring early with disabilities Non-workers may have also been eligible for continuation of health insurance benefits through provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 which require employers to provide access to insurance coverage to former workers and their

dependents for a limited period of time after separation from a job

Individually purchased private coverage

Private health insurance may also be purchased by households or individuals directly from insurers These individually purchased (rather than employershysponsored group-purchased) policies declined as a source of coverage from 1980 to 1991 (Table 9) Questionnaire changes after 1987 produced a substantial discontinuity in the CPS time series as coverage of retirees with employer-sponsored policies was captured appropriately rather than under individually purchased policies 3

The percentage of the population with privately purchased plans declined from 1980 to 1987 (from 182 percent to 166 percent) and from 1988 to 1991 (from 127 percent to 99 percent excluding cover sheet children and from 138 to 131 percent including cover sheet children)

The likely cause of this decline was rising premiums charged for these policies Several factors unique to the individual health insurance market drive up premium costs above levels charged to groups bull Higher marketing and underwriting costs that cannot

be spread across a group bull Almost complete lack of managed care or utilization

review options within individually purchased plans bull Reimbursement practices that pay benefits based on

charges (individually purchased policies seldom can take advantage of negotiated lower rates with providers or of paying only usual and customary charges)(Gabel 1991)

Higher premium costs made these policies less affordable over time for workers in small firms who do not have access to employer-sponsored coverage or who are otherwise uninsured

More than one-half of all persons owning individually purchased policies are 65 years of age or over In the 1991 CPS 32 percent of the elderly had

lPrior to 1988 only current workers were asked about employermiddot sponsored coverage Retirees and new job entrants could not specify employer~sponsored coverage source and were counted as individually purchased (an other policy) instead

Health Care Flnanclnamp ReviewFaD 1992volume 14 Number 1 40

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Table 8

Number and percent of civilian non-workers and dependents with employer-sponsored health Insurance by age United States 1988-91

Persons with employer-sponsored insurance coverage in thousands

1991

Civilian populatiOn in

thousands

248886

Total

11611

Polley owners

Age under Age 55 to Age 65 years Total 55 years 64years 7559 1624 5302

dependents 4052

1990 246191 11352 7328 652 1649 5027 4024 1989 243685 11416 7299 728 1728 4845 4117 1988 241187 10974 7003 611 1754 4637 3972

Percent of civilian population 1991 1000 47 30 03 07 21 16 1990 1000 46 30 03 07 20 16 1969 1000 47 30 03 07 20 17 1988 1000 46 29 03 07 19 16 NOTE Non-wofkers are pe1SOII$ who did not WOfk In lh8 year prior lo lh8 survampy

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care FlMncing Administration Office of the Actuary

coverage from this source These policies typically supplemented coverage under Medicare Another 12 percent of individual policy owners were age 55 to 64 years with 11 percent of persons in this age group owning policies Persons 19-54 years of age owned 33 percent ofall individually purchased policies In general 4-5 percent of persons in the 19-54 age group owned these policies

Family income by age group

The ability to afford private health insurance is closely related to income Those who cannot afford or choose not to purchase insurance privately may be eligible for coverage under public programs or may remain uninsured For the non-elderly the relationship of income and insurance is direct People Jiving at low income levels are more likely than persons of higher income to rely on Medicaid or to be uninsured We compare family incomes with the Federal poverty threshold in this article with poverty threshold determined by the size and composition of the family For a family of four with two adults under age 65 and two children under IS years the poverty threshold was $132S4in calendar year 1990

From 1980 to 1991 the proportion of the population under 65 years of age living in poverty increased from 114 percent to 138 percent (Figure 1 Table 10) In contrast the share of non-aged living in families with incomes 2 to 299 times the poverty level declined more than 3 percentage points This trend reversed in 1990-91 as the share grew almost I percentage point The other two income classes remained essentially unchanged from 1980 through 1991

Most of the growth in the proportion of the population under 65 years of age living in poverty occurred in the early 1980s coinciding with the recession and high inflation of this period In 1984 the share of the non-aged population living in poverty was at its highest 155 percent From 1984 to 1990 this share declined more than 2 percentage points falling to 131 percent in 1990 In 1991 however the proportion

Table 9 Number and percent of persons with

individually purchased1 health insurance coverage United States 198G-91

Persons in thousands

Persons with individually purchased insurance coverage

Survey year

Civilian population Total

Covered OWner dependent

Number including cover sheet chlldren2

1991 1990 1989 1988

248886 246191 243685 241187

32596 32650 31783 33240

17592 17530 17532 18459

15005 15120 14251 14782

Number excluding cover sheet chiklrenll 1991 1990 1989 1988 1987 1985 1980

248886 29458 17592 11866 246191 29397 17530 11866 243685 28841 17532 11309 241187 30521 18459 12062 238789 39560 28430 11130 234066 39941 27914 12027 223160 40704 27282 13442

Percent including cover sheet children2

1991 1000 131 71 60 1990 1000 133 71 61 1989 1000 130 72 58 1988 1000 138 77 61

Percent excluding cover sheet children2

1991 1000 99 59 40 1990 1000 119 71 48 1989 1000 118 72 46 1988 1000 127 77 50 1987 1000 166 119 47 1985 1000 171 119 51 1980 1000 182 122 60 1Pollcies purchased directly from insurer ie nol sponsored lhrough a current or former employer but purchased by a household for an inclivlclual andfor dependents Prior to 1988 employer-sponsored policies of non-workers were probably Included as Individually purchased policies 2Jn the 1988-91 surveys aclditional questions conceming health insurance status of ch~dren were asked This set of questions is referred to as cover alleet questions Responses to these qiI8Stions resulted in acldltlonal children being assigned health insurance coverage SOURCE US Bureau of the Census Curren Popcslatlon Survey 1980-91 tabulations prepared by Fu Associates Ud for the Health Cere Financing Administration Oflloe of the Actuary

Healtb Care F1nloeiOJ ReviewFaD 1991Volume 14 Number I 41

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Flguremiddot1 Distribution of family income relative to the poverty level for the non-elderly

UnHed States 1980 and 1991

300 or more times povert)

1 level

f 200middot299 ~ times poverty

~ level

~ 100-199

~ times poverty

8 level

e

~ Below poverty level

0 5 10 20 25 30 35 40 45 so

Percent of age group in income ctass

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

of non-aged living in poverty increased to 138 percent as a result of another recession

For the elderly CPS statistics indicated a migration of elderly from poorer to higher income cateories (Figure 2) From 1980 through 1991 the percentage of the elderly living in families with incomes three or more times the poverty level has increased dramatically from 302 to 401 percent (Figure 3) The percentage of the elderly in each of the income classes below three times the poverty level have declined for the same time period Income is not as impOrtant a factor for insurance coverage for the elderly because Medicare covers virtuaJly the entire population Indeed income does not substantiaUy affect the ability of the elderly to access the heaJth care system Higher income does however make it easier for the elderly to supplement their Medicare coverage with private insurance and therefore potentiaJly access higher qua1ity and larger quantities of care

The dispa_rity among generations in incomt and insurance coverage grew over the past decade The elderly populations income l~els in relation to poverty rose in the 1980-91 surveys and the likelihood of being uninsured was low regardless of income For the nonshyelderly however income levels in relation to poverty fell and the likelihood of being uninsured increased

Public health insurance

The 1991 CPS reports 610 million people 1 in4 individuals were covered by some form of public health

insurance (Table I) Public coverage included Medicare for the elderly and disabled populations Medicaid for certain low-income persons and insurance associated with current or past military service (shown in the tablesshyas CHAMPUS 4 These publicly insured individuaJs may have been covered by more than one typemiddotofpublic insurance or by private insurance as well

Medicaid

The 1991 CPS reported that the Medicaid program covered a total of243 million people or 97 percent of the non-institutionalized population at some point during the years (Table 11) lhe Medicaid program does not provide medica] assistance for all poor persons States have broad discretion in determining within Federal guidelines which groups their Medicaid programs will cover and their financial criteria for Medicaid eligibility

Reflecting its mission Medicaid insured a larger percentage of children_ than any other age groupmiddot In the 1991 CPS 608 percent of children under age 19 in families with incomes below the poverty level were covered by Medicaid (Table 12) However children in families near poverty were not being protected by the Medicaid safety net as often as the poor Children in the

4CPS includes in the sample members ofthe armed forces livin with their families either on or off military installations SAdditional people may meet e1igibility requirements for Medicaid but have not sought coverage under the program

Hultb Clre FiiJandllg ReviewFall 199lVolume 14 Number I 42

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Tobie 10 Percent distribution of persons by family Income relative to the poverty level by age

United Stotea 1980-91 Family income

Tolal populatlon1 100199 times 200299 times 300 or more times 8Y in thousands Below poverty levet2 poverty level poverty level poverty level

Age 0 to 64 yean Percent 1661 218793 138 176 191 495 1990 216625 131 171 182 517 1989 214663 132 173 184 510 1988 212700 136 170 187 507 1667 210814 138 177 193 491 1988 209427 142 187 199 472 1985 207248 148 189 203 480 1984 205561 155 197 20~ 444 1663 203849 151 203 212 433 1982 202143 139 203 217 441 1981 200556 128 193 222 457 1980 198966 114 180 217 490

Age 85 year8 or over 1991 30093 122 270 208 401 1990 29588 114 291 203 392 1989 29022 120 284 208 388 1989 28487 120 278 208 389 1987 27975 124 284 211 381 1989 27322 126 294 213 367 1985 26818 124 302 206 368 1984 26291 141 304 210 345 1663 25738 146 314 208 332 1982 25231 153 328 209 311 1981 24686 157 335 208 300 1960 24194 152 330 216 302 1Civlllan nonmiddotlnstllutlonallzed population in the United States and mMitary 1)8f8011118lliving outside military bases or on military bases with their famHes 21ncllldes persons in families with negative Incomes

SOURCE US Bureau of 111$ Census CunwltPcpulatJDrJ Survey 1980-91 tabulations prepared by Fu Associates Ltd lor lhe Health Care Financing AdministratiOn Offioe of the Acluary

near-poor income category were the most likely of all income groups to be uninsured 271 percent were uninsured compared with 226 percent of children in families with incomes below the poverty level

Data for the 19-44 age group are presented separately for males and females because low-income pregnant women are a Medicaid-targeted group Although many more females than males age 19-44live in families below the poverty level the females were less likely to be uninsured In 1991 74 million females age 19-44lived in families with incomes below the poverty level 460 percent of these females were covered by Medicaid 214 percent were covered by private insurance and 331 were uninsured For the same age bracket only 45 million males lived below the poverty level However a much higher percentage of males in poverty were uninsured (545 percent) and a much lower percent were covered by Medicaid (196 percent) A similar percentage of males and females were covered by private insurance

For all income levels combined males in the 19-44 age group were more frequently uninsured (218 percent) than any other age group Even 109 percent ofthose males in families with incomes three times the poverty level were uninsured This may be an issue of choice for some of these males rather than one of access Some may be willing to risk incurring health care costs when they occur rather than

purchasing health insurance Males and females 45-64 years of age had the lowest

proportion living in poverty (86 percent) and the highest share living in families with incomes more than three times the poverty level (630 percent) This age group was most frequently covered by private health insurance (793 percent) For those who were living in poverty access to health care may have been a problem as 364 percent were uninsured

The last age group persons 65 years of age or over are almost universally covered by Medicare regardless of income As income rises more and more elderly purchase privatehealth insurance to supplement Medicare coverage Medicaid supplements Medicare coverage for many elderly individuals in the poor and near-poor income groups

The number of people covered by the Medicaid program has increased rapidly in recent years From the 1990 to the 1991 surveys the number of people covered by Medicaid rose by more than 3 million (derived from Table 11) This was the largest 1-year increase seen in the last 12 years of CPS data Medicaid program expansions implemented as a result of recent legislation extending coverage to more children and pregnant women accounted for some of this increase Additional increases in Medicaid coverage resulted from the current recession Rising unemployment caused many more people to fall into poverty In addition many

Heattb ltan Fillaoclq RnftFaR 1991VoluiDel~ N11111ber I 43

Figure 2 Number of elderly by family Income relative to the poverty level

United States survey years 198091

level poverty level poverty level 300 or more times poverty level

5

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991

SUrvey years

~ Below poverty35

30

25

20

15

10

bull 100-199times ~ 200-299 times IHl

SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates ltd for the Health Care Financing Administration Office of the Actuary

people lost their ability to independently purchase insurance coverage when they lost their jobs

The growing Medicaid population is young Of the 31 million increase in non-institutionalized persons covered by Medicaid from CPS 1990 to 1991 640percent were under age 19 The 1991 CPS showed 181 percent of children under age 19 covered by the Medicaid program This Share increased dramatica11y if only those children under age 6 were considered Nearly one child in four under the age of 6 was covered by Medicaid in the 1991 CPS

The shifting age distribution of the Medicaid nonshyinstitutionalized population has been taking place over the past decade The elderly were the only age group to become less covered by Medicaid while all age groups under age 65 became more likely to be covered by Medicaid In 1980 138 percent of the age group 65 years or over were covered by Medicaid by 1991 this share had fallen to 86 percent Children under age 19 were more likely to be covered by Medicaid in 1991 than in 1980 In 1980 118 percent of the age group under 19 yearsmiddot was covered by Medicaid this share rose to 153 percent of the Medicaid population in 1991 excluding cover sheet children The share was higher when the more complete coverage inc1uding cover sheet children was calculated-181 percent People age 18-65 years became slightly more likely to be covered by

Medicaid but not by as much as the age group under 19 years

Medicaid is the sole source of health insurance coverage for most Medicaid beneficiaries The 1991 CPS reported 690 percent of the Medicaid population was covered by Medicaid only (Table 3) An additional 156 percent of the Medicaid population was also covered under Medicare For Medicaid beneficiaries who qualify for Medicare the State Medicaid programs will usually pay beneficiaries Medicare Part B premiums and their out-of-pocket costs for Medicareshycovered services Most of these so-called dual-eligibles also are eligible for any additional health care services offered by their States Medicaid program

The 1991 CPS showed that 169 percent of people covered by Medicaid also had private health insurance alone or in combination with other coverages This category of people may or may not be covered by both types of health insurance simultaneously a fact not discernable from CPS data

Medicare

The Medicare program covers virtually all people age 65 or over The 1991 CPS reported 957 percent of the elderly were covered by Medicare Less than 1 percent of the elderly or 03 million were uninsured The

Health Care Financing ReviewFaD 1mvolume 14 Number 1 44

Figure 3 Distribution of family Income relative to the poverty level for the elderly

United States 1980 and 1991

l 300 or more times poverty level

~ 1980~ 200middot299

0 times poverty 1991

I s level

i 100middot199 times poverty level

5

~ Below~ poverty level

0 5 10 15 20 25 30 35 40 45

Percent of age group in income class

SOURCE US Bureau of the Census Curren Population Survey 19amp1middot91 tabulations prepared by Fu Associates Ltd lor the Health Care Financing Administration Office of the Actuary

uninsured elderly were spread across all income classes with those below poverty the most likely to be uninsured Elderly in or near poverty were frequently covered by Medicaid in addition to Medicare (Table 12)

A large number of elderly supplement their Medicare coverage with private health insurance plans referred to as medigap policies which pay required deductible and coinsurance amounts Medicare is the secondary payer for Medicare enrollees covered by an employer group health plan through the enroilees or spouses current employer However the current CPS questionnaire does not distinguish if a working elderly person receives group health insurance from a current rather than a former employer so it is not possible to determine from CPS data if Medicare is the secondary or primary payer

In addition to the elderly the Medicare program also provides health care services to certain disabled persons under age 65 When first implemented in 1966 Medicare was designed to protect people age 65 or over from the high cost of health care Effective July 1 1973 the program was expanded to cover permanently disabled workers eligible for old age survivors and disability insurance benefits as well as people with end stage renal disease The 1991 CPS reported a total of 323 million people covered by the Medicare program Of these enrollees 35 million just over 10 percent were under age 65 For the non-aged Medicare population Medicare was the sole source of coverage for 302 percent another 361 percent supplemented

their Medicare coverage with private health insurance alone or in combination with other public programs 353 percent were covered by Medicare and Medicaid alone or in combination with other coverages and 60 percent were covered by Medicare and CHAMPUS alone or in combination with other coverages (Table 3)

Comparisons to program data

CPS counts of people covered by the Medicare and Medicaid programs are reasonably consistent with Health Care Financing Administration (HCFA) program data after allowing for the institutional component missing from CPS The 1988 CPS indicated 273 million people age 65 or over were covered by Medicare at any time during 1987 (Table 13) Comparable Medicare program data show 294 million enrollees age 65 or over as of July 1 1987 including the institutionalized population outside the scope of CPS As of January 1 1987 an estimated 14 million persons age 65 or over resided in nursing and personal care homes (Lair and Leftkowitz 1990) Assuming that all people age 65 or over residing in these homes were Medicare enrollees these aged institutionalized residents accounted for two-thirds of the difference beLween CPS and program data The remaining difference may include persons who do not realize they have Medicare coverage because they opted not to pay Medicare Part B premiums for the supplementary medical insurance program Over the 10-year period 1982-91 CPS counts of the Medicare population age

Health Cart Flnandng ReviewFall 1992VoJume 14 Number 1 45

Table 11 Medicaid populatlon1 by age group United States 198091

Suovey Age in years

yeabull All ages 0 to 18 19 to 44 45 to 64 65 or over

Number in thousands including cover sheet children2

1991 24261 12434 6942 2302 2582 1990 21185 10466 5981 2161 2576 1999 20728 10290 5909 2077 2451 1966 20211 10021 5919 1883 2387

Number in thousands excluding cover sheet children2

1991 22294 10468 6942 2302 2582 1990 19590 8871 5981 2161 2576 1999 19407 8970 5909 2077 2451 1966 18986 8796 5919 1883 2387 1987 19770 8802 6304 1915 2749 1985 19422 8482 6081 2014 2845 1980 18557 8008 5196 2003 3349

Percent of Medicaid population including cover sheet children2

1991 1000 513 286 95 106 1990 1000 494 292 102 122 1999 1000 496 295 100 118 1988 1000 496 293 93 118

Percent of Medicaid population excluding cover sheet chlldren2

1991 1000 470 311 103 116 1990 1000 453 305 110 132 1999 1000 482 304 107 126 1966 1000 483 312 99 126 1987 1000 445 319 97 139 1985 1000 437 313 104 146 1980 1000 432 280 108 180

Percent of total population including cover sheet children2

1991 97 181 67 49 86 1990 86 154 59 46 87 1989 85 152 58 45 84 1998 84 149 59 41 84

Percent of total population excluding cover sheet children2

1991 90 153 87 49 86 1990 80 131 59 46 87 1989 80 133 58 45 84 1966 79 131 59 41 94 1987 93 132 64 43 98 1985 93 128 63 45 106 1990 83 118 60 45 138 1CMIIan nonmiddotlnstitutiOnalized population in the United States and military personnel living outside military bases or on military bases with their families 2Jn the 1988-91 surveys additional questions 0011ceming health lnsureoee status of children were asked This set of questions is referred to as oover sheet questions Responses to these questions resulted in additional children being assigned health Insurance ooverage SOURCE US Bureau of the Census Current Population Stnvey 1980-9t tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration OffiCe of the Actuary

65 or over grew at exactly the same average annual rate as program data on aged Medicare enrollees (19 percent)

Similarly CPS counts of persons covered by the Medicaid program can be compared with HCFA program data The 1991 CPS reported 243 million persons including cover sheet children covered by Medicaid during 1990 Comparable HCFA Medicaid program data indicate 253 million persons were recipients of Medicaid program services during fiscal year 1990 The difference between the CPS and HCFA program data can be attributed to factors the institutionalized population not included in CPS and difficulties that surveys have capturing Medicaid recipients

From 1980 to 1991 the CPS Medicaid population grew 200 percent using CPS counts of Medicaid

population excluding cover sheet children Increases in CPS and Medicaid program counts are identical from 1980through 1991 CPS shows 37 million more people covered by the Medicaid program and program data identify tbe same increase in number of recipients

The uninsured

Lack of insurance creates a financial barrier to health care in the United States Compared with individuals with insurance the uninsured are less likely to seek care and more likely to receive fewer services (Davis and Rowland 1983)

Although CPS data on the uninsured are a frequently cited measure of the heaJth care access problem two caveats should be kept in mind First health care access is difflcult to assess by simply counting the number of

Heallb Care FlnadnaReviewFall tmvo~wne 14 Number 1 46

Table 12 Percent distribution of selected population groups by Insurance status and by family income

relative to the poverty level United States 1991 Publicly insured

Family Total persons1 Privately income In thousands Uninsured Medicare Medicaid Insured

Percent distribution of children under age 19

Total all incomes 68619 133 02 181 711 Below poverty level2 14156 226 03 608 216 100-149 times poverty level 7339 271 03 244 540 150-199 times poverty level 7446 191 01 106 734 200-249 times poverty level 7655 112 01 61 847 250-299 times poverty level 6848 85 02 39 889 300 or more times poverty level 25175 43 00 20 942

Percent distribution of females age 19 to 44

Total all incomes 52196 158 11 97 737 Below poverty level2 7408 331 32 460 214 100-149 times poverty level 4297 336 21 175 487 150-199 times poverty level 4818 236 13 75 672 200-249 limes poverty level 5000 177 06 38 768 250-299 times poverty level 4967 121 08 23 841 300 or more times poverty level 25706 67 04 09 915

Percent distribution of males age 19 to 44

Total all Incomes 50947 218 12 37 727 Below poverty level2 4543 545 42 196 242 100-149 times poverty level 4053 456 26 88 427 150-1 99 times poverty level 4521 327 16 46 595 200-249 times poverty level 4881 254 09 23 695 250-299 times poverty level 5211 197 11 21 761 300 or more times poverty level 27738 109 05 08 871

Percent distribution of males and females age 45 to 64

Tota1 all incomes 47031 127 46 49 793 Below poverty level2 4063 364 129 310 257 100-149 times poverty level 2884 331 132 145 442 150-199 times poverty level 3255 272 83 69 603 200-249 times poverty level 3550 186 54 42 741 250-299 times poverty level 3640 139 50 20 810 300 or more times poverty level 29640 51 21 06 926

Percent distribution of males and females age 65 or over Total all incomes 30093 09 957 86 683

BelOw poverty level2 3658 25 957 304 326 100-149 times poverty level 4250 09 985 135 509 150-199 times povamprty level 3881 07 979 75 637 200-249 limes poverty level 3468 08 975 49 713 250-299 times poverty level 2780 05 970 44 764 300 or more times poverty level 12056 06 932 26 841

Percent distribution of all ages

Total an incomes 248886 139 130 97 732 Below poverty level2 33827 287 133 452 236 100-149 times poverty level 22824 275 209 171 492 150-199 times poverty level 23921 207 176 78 661 200middot249 times poverty level 24554 149 149 44 766 250-299 times poverty level 23446 116 127 29 823 300 or more times poverty level 120315 62 101 12 906

1Civlllan non-institutionalized population in the United States and military personnel living outside mUitary bases or on military bases with IMir families 2tncludes persons In families with negative Income NOTE Columns are not additive or mutually exclusive that is not all types of coverage are shown and persons may have more than one type of coverage SOURCE US 8ui$QI olttle Census currant p(plllatiorl SUrvey 1991 tabulatlonsprapared by FuAssoolates Ltd lor IM Healltl Care Financing Administration Office of the Actuary

Health Care FlnanclnJ ReviewFall 1992vohune lot Number 1 47

Table 12 Percent distribution of selected population groups by Insurance status and by family income

relative to the poverty level United States 1991 Publicly insured

Family Total persons1 Privately income In thousands Uninsured Medicare Medicaid Insured

Percent distribution of children under age 19

Total all incomes 68619 133 02 181 711 Below poverty level2 14156 226 03 608 216 100-149 times poverty level 7339 271 03 244 540 150-199 times poverty level 7446 191 01 106 734 200-249 times poverty level 7655 112 01 61 847 250-299 times poverty level 6848 85 02 39 889 300 or more times poverty level 25175 43 00 20 942

Percent distribution of females age 19 to 44

Total all incomes 52196 158 11 97 737 Below poverty level2 7408 331 32 460 214 100-149 times poverty level 4297 336 21 175 487 150-199 times poverty level 4818 236 13 75 672 200-249 limes poverty level 5000 177 06 38 768 250-299 times poverty level 4967 121 08 23 841 300 or more times poverty level 25706 67 04 09 915

Percent distribution of males age 19 to 44

Total all Incomes 50947 218 12 37 727 Below poverty level2 4543 545 42 196 242 100-149 times poverty level 4053 456 26 88 427 150-1 99 times poverty level 4521 327 16 46 595 200-249 times poverty level 4881 254 09 23 695 250-299 times poverty level 5211 197 11 21 761 300 or more times poverty level 27738 109 05 08 871

Percent distribution of males and females age 45 to 64

Tota1 all incomes 47031 127 46 49 793 Below poverty level2 4063 364 129 310 257 100-149 times poverty level 2884 331 132 145 442 150-199 times poverty level 3255 272 83 69 603 200-249 times poverty level 3550 186 54 42 741 250-299 times poverty level 3640 139 50 20 810 300 or more times poverty level 29640 51 21 06 926

Percent distribution of males and females age 65 or over Total all incomes 30093 09 957 86 683

BelOw poverty level2 3658 25 957 304 326 100-149 times poverty level 4250 09 985 135 509 150-199 times povamprty level 3881 07 979 75 637 200-249 limes poverty level 3468 08 975 49 713 250-299 times poverty level 2780 05 970 44 764 300 or more times poverty level 12056 06 932 26 841

Percent distribution of all ages

Total an incomes 248886 139 130 97 732 Below poverty level2 33827 287 133 452 236 100-149 times poverty level 22824 275 209 171 492 150-199 times poverty level 23921 207 176 78 661 200middot249 times poverty level 24554 149 149 44 766 250-299 times poverty level 23446 116 127 29 823 300 or more times poverty level 120315 62 101 12 906

1Civlllan non-institutionalized population in the United States and military personnel living outside mUitary bases or on military bases with IMir families 2tncludes persons In families with negative Income NOTE Columns are not additive or mutually exclusive that is not all types of coverage are shown and persons may have more than one type of coverage SOURCE US 8ui$QI olttle Census currant p(plllatiorl SUrvey 1991 tabulatlonsprapared by FuAssoolates Ltd lor IM Healltl Care Financing Administration Office of the Actuary

Health Care FlnanclnJ ReviewFall 1992vohune lot Number 1 47

Tabte 13 Medicaid and aged Medicare populations according to two sources 1 United States 1980-91

Aged Medicare population by source Medicaid population by source

CPS2 CPS2

Yeafl CP$2 Program data4 excluding cover shea~ including cover shea~ Program datae

Number in thousands 1991 28795 30948 22294 24261 25255 1990 28251 30409 19590 21185 23511 1989 27724 29879 19407 20728 22907 1988 27333 29380 18986 20211 23109 1987 26919 28791 19770 22518 1988 26320 28176 19281 21808 1985 25825 27571 19422 21607 1984 25264 27109 19307 21554 1983 24690 26540 18924 21603 1982 24299 26011 19459 21980 1981 23540 25515 19012 21605 1980 22149 24948 18557 21521

Cumulative growth 1988-91 53 53 174 200 93 198(gt-)1 300 241 201 NA 174 1The two sources arelhe Current Population Survey CPS) and program data from the Health Care Financing Administration ZCMIIan nonmiddotlnstltutionallzed population in the United States and military personnel living outside military bases or on military bases with their lamllles Sfor CPS year refers to survey year for program data year refers to year indiCated minus one because CPS responses refer to priormiddotyear coverage4Medicare enrollees age 65 or over as of July 1 in hospital insurance (HI) andor supplementary medical insurance (SMI) programs (includes institutionalized population) SJn the 1988-91 surveys additional questions concerning health insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insurance coverage Sunduplieated count of Medicaid recipients Ourlng fiscal year (Includes institutionalized population)

NOTE NA indicates that comparable statistics are not available SOURCE US Bureau of the Census Current Popu81on Survey 1980-91 tabulations prepared by Fu Associates Ud lor the Health Care Rnanclng Administration Office of the Actuary

uninsured (Aaron 1991) On one hand some health expenditures can be safely postponed until individuals have insurance On the other hand not all insured individuals have adequate coverage to meet their needs Second CPS counts of the uninsured are subject to interpretation Respondents to the health insurance questions may describe their coverage at the time of the question rather than for the previous year (Swartz 1986) Thus CPS data on the uninsured may reflect their status at a point in time rather than for the entire year prior to the survey

Caveats notwithstanding the uninsured are a large and growing proportion of the population In the 1991 CPS approximately 347 million individuals were estimated to be without insurance coverage of any kind private or public (Table 14) This group included 139 percent of the non~institutionalized population or nearly one out of seven individuals It comprised a larger proportion of the population when the elderly who have almost universal coverage through Medicare were not included in the base Approximately 157 percent of the non-elderly population was uninsured (Table 2)

Because the health insurance questions were revised beginning with the 1988 CPS data on the uninsured are not entirely consistent between the two periods 1980-87 and 1988-91 Nonetheless the data indicate significant growth in the uninsured population during these two periods From 1983 through 1985 the number of uninsured grew by 123 percent (from 330 million to 371 million based on data excluding cover sheet children) Another large expansion occurred from 1988

through 1991 as the number of uninsured increased by 119 percent (from 310 million to 347 million based on data including cover sheet children) These growth rates suggest that the uninsured have become a relatively larger problem during the 1980s regardless of the actual number of uninsured (Table 1)

Prior to the 1988 CPS information concerning coverage of family members by sources outside the household was not solicited from individuals in the survey Beginning with the 1988 CPS however questions were asked about insurance coverage of children from outside sources The additional information caused the number and proportion of children without insurance to fall significantly from 1987 through 1988 primarily because additional children were identified as having Medicaid coverage or private health insurance from an outside-household source

Based on the revised questions the number of uninsured young children age 0 to 5 fell from 40 million in 1987 to 27 million in 1988 while the number of uninsured older children age 6 to 18 fell from 92 million in 1987 to 61 million in 1988 From 1988 through 1991 however young children were the only age group other than the elderly to escape the trend toward less insurance coverage primarily as a result of expansions in the Medicaid program The number of uninsured children under age 6 fell from 2 7 million to 26 million while the number of uninsured in the other age groups increased in both absolute and relative numbers The proportion of uninsured children age 6~18 increased by 07 percentage points from 135 to 142 percent The number of young adults age 19-24

Health Care linandng Reliew FaD 1992volume 14 Number 1 48

Table 14 Number and percent of persons1 without health Insurance coverage by age group United States

1980-91

Age in years

yoa Total 0 to 5 6 to 18 19 to 24 25 to 34 35 to 64 65 or over

Number in thousands including cover sheet children2

1991 34719 2648 6485 5864 6324 11121 276 1990 33385 2888 6306 5630 7914 10258 308 1889 32680 2813 6255 5555 7920 9861 275 1988 31026 2724 6110 5467 7308 9111 306

Number in thousands excluding cover sheet children2

1991 39629 4612 9431 5864 8324 11121 276 1990 38047 4816 9121 5630 7914 10258 308 1889 36830 4403 8816 5555 7920 9861 275 1988 34823 4145 8485 5467 7308 9111 308 1987 37357 4012 9150 6986 7074 9830 304 1986 37180 4234 8999 7003 8980 9800 284 1985 37055 4213 9131 7461 6506 9483 261 1884 35325 3869 8620 7451 6170 8926 290 1983 32996 3616 8251 6781 5704 8319 325 1982 30974 3526 8144 6208 5019 7807 270 1981 NA NA NA NA NA NA NA 1880 30474 3502 8149 5385 4543 8067 828

Percent of total populatiOn including cover sheet children

1991 139 115 142 272 194 130 09 1990 136 128 141 259 183 123 10 1889 134 126 138 253 183 120 09 1988 129 124 135 244 170 114 11

Percent of total populatiOn excluding cover sheet children2

1991 159 200 207 272 194 130 09 1990 155 213 201 259 183 123 10 1988 151 197 195 253 183 120 09 1888 144 189 188 244 170 114 11 1987 156 184 203 306 166 125 11 1986 157 195 200 298 163 127 10 1985 158 196 203 308 159 125 10 1984 152 181 192 300 154 120 11 1983 144 172 181 271 145 114 13 1982 136 173 176 247 130 109 11 1981 NA NA NA NA NA NA NA 1980 137 180 168 217 124 116 34 1Civillan non-Institutionalized population In the United States and military personnel living outside military bases or on military bases wllh their families 21n the 1988-91 surveys additiOnal questions concerning health Insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insuraiICEI coverage NOTE NA Indicates that comparable statistics are not available

SOURCE us Bureau of the census Cunent Population Survey 198o-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing AdministratiOn Office of the Actuary

increased by 28 percentage points from 244 to 272 percent those age 25-34 by 24 percentage points from 170 to 194 percent and those age 35-64 by 16 percentage points from J14to 130percent

Famlly incomes of the uninsured

Low-income families have relatively more uninsured members than high-income families and the probability of being uninsured rises sharply as income falls The link between income and insurance status can be seen in the distributions of uninsured individuals by family income relative to the Federal poverty level (approximately $13254 for a family of four in calendar year 1990) In the 1991 CPS the uninsured included 97 million individuals who lived in families whose income from all sources was less than the poverty level (Table 15) Another 112 million were members of

families whose income was less than two times the poverty level

Uninsured individuals in low-income (less than two times the poverty level) families comprised 602 percent of the total uninsured in the 1991 CPS and they had higher-than-average uninsurance rates Based on data including cover sheet children in the 1991 CPS157 percent of the non-elderly were uninsured compared with 287 percent of the poor non-elderly In contrast 62 percent of individuals whose family income was at least three times the poverty level were lacking insurance Thus the probability of low-income family members being without insurance was 18 times the national average of the non-elderly population and 46 times that of high-income families

From 1988 through 1991 insurance coverage declined in all income groups except the poor Coverageof poor families remained stable because Medicaid

Health Care Flnanclq ReviewFall1992vohuoe 14Nber 1 49

insured more children in poor families All higher income groups lost coverage however as employershysponsored coverage of workers and their dependents declined and insurance premiums for individual purchasers of insurance rose

Geographic distributions of tbe uninsured

Insurance coverage varies widely by area of the country Geographic differences in coverage are affected by interrelated factors including work force attachment wage rates firm size and type of industry (US Congress 1990) Cause-and-effect relationships

among these factors are not clearly defined but areas in which workers receive high wages work for large firms and belong to unions have relatively fewer uninsured than other areas

Based on data including cover sheet children the 1991 CPS shows 90 percent of the population in New England States without insurance compared with 203 percent of the population in West South Central States (Table 16 Figure 4) In absolute terms three divisions-the West South Central the Pacific and the South Atlantic-bad more than one-half of the uninsured with S4million 68 million and 68 million respectively

Table 15 Number and percent of uninsured persons by family Income relative to the poverty level

United States 1980middot91

Total Family Income

Suovey uninsured population1

100 to 199 times 200 to 299 times Below poverty level2 poverty level poverty level

300 or more times poverty level

Number In thousands including cover sheet children3

1991 34719 9696 11222 6397 7405 1990 33385 9581 10631 5903 7269 1989 3268(1 9738 10198 5608 7136 198S 31026 9712 9928 5361 6025

Number in thousands excluding cover sheet children3

1991 39629 11183 12527 7325 8594 1990 38047 10932 11955 6736 8425 1989 36830 10844 11400 6475 8111 198S 34823 10920 10894 6139 6870 1987 37357 11015 11063 6327 8951 1985 37055 11218 11263 6654 7920 1980 30474 8043 9098 5853 7480

Percent of total uninsured population including cover sheet children3

1991 1000 279 323 184 213 1990 1000 287 318 177 218 1989 1000 298 312 172 218 198S 1000 313 320 173 194

Percent of total uninsured population excluding cover sheet children3

1991 1000 282 316 185 217 1990 1000 287 314 177 221 1989 1000 294 310 176 220 198S 1000 314 313 176 197 1987 1000 295 296 169 240 1985 1000 303 304 180 214 1980 1000 264 299 192 245

Percent of people within income category including cover sheet children3

1991 NA 287 240 133 62 1990 NA 302 233 130 59 1989 NA 305 224 123 59 198S NA 300 225 117 51

Percent of people within income category excluding cover sheet children3

1991 NA 331 308 153 71 1990 NA 344 298 149 68 1989 NA 340 279 142 67 198S NA 337 279 134 58 1987 NA 338 284 136 78 1985 NA 330 273 140 75 1980 NA 305 230 121 71 1CMIIan non-institUtionalized populallon in the United States and mliltary personnel living outside military bases or on military bases with their larnliles 2lncludes persona in famlies with negative Income 3jn the 1988-91 surveys additional questiOnamp concerning heallh insurance statuamp of children WEfEI asked Thla set of questiOM Is referred to as cover ahHt qunllone Reaponeea to lhese questions resulted in additional children being assigned health insurance coverage

NOTE NA IndiCates lhat comparable atatlstlcs are not available

SOURCE US Bweau of the Census Current PopuJalion Survey 1988-91 labUlallons prepared by Fu Aampsoclates Ud for the Health Care Financing Admlnialfatlon Oflicamp of the ActuafY

so

AJthough the uninsured are an increasing proportion of the population in all divisions except the Mountain States much of the recent growth in the uninsured population occurred in two divisions From 1988 through 1991middot nearly 33 percent of the increase in the number of uninsured took place in the South Atlantic States (13 million out of a total increase of 37 million) Another 25 percent of the increase took place in the Pacific States where the number of uninsured grew by more than 09 million In relative tenns New England experienced the largest regional increase in the percentage of population without insurance from 1988 through 1991 (30 percent) from 09 million to 12 million Despite this increase New England still maintained the lowest percentage of the population without insurance coverage from any source

Work force attachment

Because insurance coverage in the United States has evolved as a work-related system of private health insurance supplemented by public insurance some advocates of insurance reform would build on the system to reduce the uninsured population One of their recommendations includes extending employershysponsored insurance to uninsured workers and their dependents (eg The Pepper Commission 1990) Proponents of extended employer-sponsored insurance believe it would be less disruptive and more effective than other solutions because the uninsured population includes large numbers of workers and their dependents

Nearly 304 million uninsured or 87 S percent of the total uninsured including cover sheet children in the 1991 CPS were members of families in which the family member with the highest earnings (the family head) was in the work force (derived from Table 17) About 540 percent of the uninsured were members of families headed by full-year full-time workers Another 220 percent of the uninsured lived in families headed by part-year full-time workers

Families headed by full-time full-year workers probably would gain coverage from proposals to expand employer-sponsored health insurance However mandated coverage of workers also could have negative effects on employment and wages in some labor markets (Feldstein 1988) Firms facing higher total compensation costs could respond by eliminating jobs holding down wages raising prices or going out of business

Individuals with little or no work force attachment would not easily be reached by expanded employershysponsored insurance Compared with other workers for instance part-year and part-time workers are offered insurance through their jobs less often switch jobs more frequently and are disproportionately likely to be without insurance As an example 251 percent of individuals in families headed by part-year full-time workers were uninsured compared with 118 percent of individuals in families headed by full-year full-time workers

Moreover approximately one-eighth of the uninsured-43 million individuals based on data

Table 16

Number and percent of Insured persons1 by census division United States selected years 1980-91

Excluding cover sheet children Including cover sheet chlldreti

division 1980 1988 1991 1988 1991

Number in thOusands

Total United States 30474 34823 39629 31026 34719 New England 1256 1062 1408 891 1160 Middle Atlantic 4137 3987 4852 3473 4166 East North Central 4187 4517 4863 3911 4168 West North Central 1948 1780 2074 1587 1810 South Atlantic 5494 6346 7720 5577 6831 East South Central 2243 2583 2790 2303 2395 West South Central 4436 5814 8006 5331 5362 Mountain 1978 2282 2354 2101 2070 Pacific 4795 6452 7561 5853 6758

Percent of total population

Total United States 137 144 159 129 139 New England 104 64 109 70 90 Middle Atlantic 113 108 128 94 110 East North Central 102 109 115 94 99 West North Central 116 101 116 90 101 South Atlantic 150 154 178 135 157 East South Central 157 173 182 155 157 West South Central 191 219 227 2Q1 2Q3 Mountain 177 175 172 161 151 Pacmc 153 176 193 159 173

2

1Civllian non-lnstitutiooalzed population In the United States and military personnel living outsicle military bases or on mHitary bases with their families 21n the 1988-91 surveys additional questiOn$ concemlng health insurance sta1us of children were asked Responses to these questions reeul1ed In acldi1iona children being assigned health insurance coverage SOURCE US Bureau of 1he Census Current Populallon Stnvey 1980-91 tabulations preplll$d by Fu Assocla1es Ltd for the Health Care Rnanclng Administration Offioe of the Actuary

Health Care Finaltdog ReviewFa11199ZVolurnt 14 Number 1 51

Figure 4 Percentage of population with no heaHh Insurance coverage

by census division United States 1991

West North Central 101

bull 0 Less than 12 percent

~ 12-16 percent

bull More than 16 percent

SOURCE US Bureau of the Gensus Current Population Survey Mar 1991 tabulations prepared by Fu Associates ltd for the Health Care Financing Adminislration Office of the Actuary

including cover sheet children in 1991-were in families whose head is not in the work force This group probably contained more long-term uninsured individuals than other groups but the data may be misleading in some cases Family heads not in the work force can include retirees disabled persons and individuals just entering the labor force as well as the chronically unemployed

Employer-sponsored coverage of workers and their dependents has been declining over the last decade Uninsured members of families headed by full-year full-time workers increased by 181 percent (from 159 million to 187 million) while the overall number of uninsured increased by 119 percent (from 310 million to 347 million) from I 988 through 1991 The trend toward relatively more uninsured workers reflects factors such as high insurance premiums less access to insurance by small firms and increased employee cost sharing in firms offering group insurance to their employees

Uninsured worker-specific characteristics

The work force includes several subgroups of uninsured workers Some are not offered insurance or

do not have adequate wages to purchase it Others have adequate wages but cannot buy insurance because of their health status Still others voluntarily decline to purchase insurance even when it is affordable and available

Table 18 shows the number and percent of uninsured full-year full-time workers by hourly wage rate in 1989 dollars This group of workers had better access to health insurance than part-time workers and information on their insurance coverage was relatively consistent over time As a result the data may be particularly useful in evaluating insurance coverage of workers and their independents

Insurance coverage of workers is highly correlated with income and skewed toward high-wage earners In the 1991 CPS 112 percent of workers with full-time full-year employment were uninsured but lowmiddotwage workers had highermiddotthan-average rates of uninsurance Some 518 percent of uninsured workers earned less than $6 per hour and another 290 percent earned from $6 to $10 per hour The remaining 192 percent earned at least $10 per hour

The asymmetric distribution of health insurance coverage among workers can be seen by comparing coverage of workers in different wage categories

Helth Care Flnanclnf ReviewFall1992volume 14 Number 1 52

Table 17 Number and percent of uninsured persons by work status of famlty head1 United States selected

years 1980-91 Family heads working full-year and Family heads working part-year and

SUivey Total uninsured

number of hours per week number of hours per week Family head

not Inwork force

35 or more 1middot20 hours 21-34 hours hours

35 or more 1middot20 hours 21-34 hours hours

Number In thousands including cover sheet children2

1991 34719 650 1265 18732 845 1268 7622 4337 1990 33385 752 1295 t79n 835 1o75 7070 4381 1989 32680 707 1119 17786 1017 1161 6650 4239 1988 31026 616 1185 15860 876 1100 6865 4524

Number in thousands excluding cover sheet children2

1991 39629 721 1436 21616 9n 1410 8390 5080 1990 38047 798 1448 20612 981 1245 7800 5164 1989 36830 783 1273 20285 1114 1259 7293 4823 1988 34823 653 1304 17896 1001 1245 7454 5269 1987 37357 692 1451 19831 1233 1462 7231 5066 1985 37055 759 1346 19086 1112 1402 7460 5283 1980 30474 571 839 15661 970 980 6294 4940

Percent of total uninsured including cover sheet chlldren2

1991 1000 19 36 540 24 37 220 125 1990 1000 23 39 538 25 32 212 131 1989 1000 22 34 544 31 36 203 130 1988 1000 20 38 511 28 35 221 146

Percent of total uninsured excluding cover sheet children2

1991 1000 18 36 545 25 36 212 128 1990 1000 21 38 542 26 33 205 136 1989 1000 21 35 551 30 34 198 131 1988 1000 19 37 514 29 36 214 151 1987 1000 19 39 531 33 39 194 136 1985 1000 20 36 515 30 38 201 143 1980 1000 19 28 514 32 32 207 162

Percent uninsured including cover sheet children2

1991 NA 206 258 118 193 290 251 102 1990 NA 249 271 113 187 296 245 104 1989 NA 225 240 114 230 287 252 95 1988 NA 215 266 104 200 291 247 101

Percent uninsured excluding cover sheet children2

1991 NA 229 292 136 223 323 276 119 1990 NA 264 303 129 220 343 270 122 1989 NA 249 273 130 251 311 276 109 1988 NA 228 293 117 229 330 269 117 1987 NA 274 321 132 270 373 253 120 1985 NA 282 313 131 257 363 256 127 1980 NA 242 263 110 242 303 200 142 1Family head Is defined as the family member with the highest income 2tn the 1988-91 surveys additional questions concerning health insurance status of children were asked This set of questions Is referred to as cover sheet questions Responses to lhasa questions resulted in additional children being assigned health insurance coverage

NOTE NA indicates that comparable statistics ere not available SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Finaflcing Administration Office of the Actuary

Workers earning $6 to $999 per hour had an 113~percent chance of being uninsured but other workers had much different coverage rates At the extremes the probabilities of being without insurance ranged from a high of 396 percent for low~wage earners (earning $335 or less per hour) to a low of 29 percent for high~wage earners (earning $15 or more per hour)

The proportion of full~time full~year workers without insurance has been increasing over time From 1980 through 1991 the number of uninsured workers increased by 747 percent from 51 million to 89 million with most of the increase affecting low~ to

middle-wage earners During this period about 40 percent of workers earning $335 or less were uninsured However the number of uninsured workers earning $336 to $599 per hour increased by nearly 10 percentage points from 176 percent to 275 percent and the number of uninsured workers earning $600 to $999 increased by 21 percentage points from 92 percent to 113 percent

A number of explanations for the decline in coverage of workers have been offered (Kronick 1991) One hypothesis is that demand for insurance by poor workers declined as the price of medical care increased during the 1980s The theory is that demand for

Health Care Fibullanclnc ReviewFaD 1992Votume J4Number 1 53

Table 18 Number and percent of uninsured fullwyear full-time workers by hourly wage rate in 1989 dollars

United States 1980-91 Total Hourly wage rate in 1989 dollars Survey uninsured

year workers1 bull2 $335 or less $336-599 $60()999 $1000-1499 $1500 or more

Number in thousands2

1991 8857 1320 3271 2569 1121 576 1990 8362 1196 2867 2610 1066 623 1989 8349 1185 2785 2585 1134 660 1988 7255 1257 2493 2079 919 508 1987 6978 1137 2475 2003 776 587 1988 6683 1273 2220 1888 770 532 1985 6477 1117 2282 1767 809 502 1984 5419 991 1862 1452 689 428 1983 4716 943 1459 1430 539 344 1982 1981

4769 NA

947 NA

1535 NA

1417 NA

559 NA

311 NA

1980 5069 827 1262 1761 716 503

Percent of all workeW

1991 1000 149 369 290 127 65 1990 1000 143 343 312 127 74 1989 1000 142 334 310 136 79 1988 1000 173 344 287 127 70 1987 1000 163 355 287 111 84 1986 1000 191 332 283 115 80 1985 1000 172 352 273 125 78 1984 1000 183 344 268 127 79 1983 1000 200 309 303 114 73 1982 1000 199 322 297 117 65 1981 NA NA NA NA NA NA 1980 1000 163 249 347 141 99

Percent of workers~ In each category

1991 112 396 275 113 53 29 1990 107 388 270 114 52 30 1989 107 403 275 118 54 31 1988 96 430 252 98 47 25 1987 96 386 243 99 41 30 1988 94 446 231 90 41 30 1985 94 408 230 90 43 30 1984 83 405 194 77 38 28 1983 76 401 178 72 33 23 1982 75 406 178 71 34 20 1981 NA NA NA NA NA NA 1980 80 398 176 92 43 29 1Civilian non-institutionalited populalion In the United States and mlmaty personnel living outside military bases or on military bases with their families 2worked during year priOf to the survey

NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Popv81on SuiVey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care Financing Administration Office ofthe Actuary

insurance by low-wage earners has fallen because the poor face limited Imancial risk by going without it That is they have few assets to protect and they can receive free or low-cost care through community programs to help the medically indigent

An alternative explanation is that supply and demand in labor markets play a critical role in determining the availability of employer-sponsored insurance Lowshywage workers generally are thought to be more concerned about take-home pay than fringe benefits because of a strong need for income to purchase necessities while employers are more concerned about total compensation than the split between wages and fringe benefits Therefore health insurance may not be offered by employers or demanded by employees in low-wage job markets

Uninsured workers by industry

In 1991 169 percent of all full- and part-time workers were uninsured but coverage varied greatly across industries (Table 19) Industries in which lowshywage seasonal or part-time jobs were common had higher-than-average shares of uninsured workers Agriculture forestry and fisheries had the largest percent of uninsured workers (413 percent) for example while construction retail trade and business and personal services also had large proportions of uninsured workers

Industry trends are consistent with other data on uninsured workers From 1980 through 1991 the proportion of workers without insurance increased in all industries except government and the

Health Care Financing Review Falll992volume 14 Number 1 54

Table 14 Number and percent of persons1 without health Insurance coverage by age group United States

1980-91

Age in years

yoa Total 0 to 5 6 to 18 19 to 24 25 to 34 35 to 64 65 or over

Number in thousands including cover sheet children2

1991 34719 2648 6485 5864 6324 11121 276 1990 33385 2888 6306 5630 7914 10258 308 1889 32680 2813 6255 5555 7920 9861 275 1988 31026 2724 6110 5467 7308 9111 306

Number in thousands excluding cover sheet children2

1991 39629 4612 9431 5864 8324 11121 276 1990 38047 4816 9121 5630 7914 10258 308 1889 36830 4403 8816 5555 7920 9861 275 1988 34823 4145 8485 5467 7308 9111 308 1987 37357 4012 9150 6986 7074 9830 304 1986 37180 4234 8999 7003 8980 9800 284 1985 37055 4213 9131 7461 6506 9483 261 1884 35325 3869 8620 7451 6170 8926 290 1983 32996 3616 8251 6781 5704 8319 325 1982 30974 3526 8144 6208 5019 7807 270 1981 NA NA NA NA NA NA NA 1880 30474 3502 8149 5385 4543 8067 828

Percent of total populatiOn including cover sheet children

1991 139 115 142 272 194 130 09 1990 136 128 141 259 183 123 10 1889 134 126 138 253 183 120 09 1988 129 124 135 244 170 114 11

Percent of total populatiOn excluding cover sheet children2

1991 159 200 207 272 194 130 09 1990 155 213 201 259 183 123 10 1988 151 197 195 253 183 120 09 1888 144 189 188 244 170 114 11 1987 156 184 203 306 166 125 11 1986 157 195 200 298 163 127 10 1985 158 196 203 308 159 125 10 1984 152 181 192 300 154 120 11 1983 144 172 181 271 145 114 13 1982 136 173 176 247 130 109 11 1981 NA NA NA NA NA NA NA 1980 137 180 168 217 124 116 34 1Civillan non-Institutionalized population In the United States and military personnel living outside military bases or on military bases wllh their families 21n the 1988-91 surveys additiOnal questions concerning health Insurance status of children were asked This set of questions is referred to as cover sheet questions Responses to these questions resulted in additional children being assigned health insuraiICEI coverage NOTE NA Indicates that comparable statistics are not available

SOURCE us Bureau of the census Cunent Population Survey 198o-91 tabulations prepared by Fu Associates Ltd for the Health Care Financing AdministratiOn Office of the Actuary

increased by 28 percentage points from 244 to 272 percent those age 25-34 by 24 percentage points from 170 to 194 percent and those age 35-64 by 16 percentage points from J14to 130percent

Famlly incomes of the uninsured

Low-income families have relatively more uninsured members than high-income families and the probability of being uninsured rises sharply as income falls The link between income and insurance status can be seen in the distributions of uninsured individuals by family income relative to the Federal poverty level (approximately $13254 for a family of four in calendar year 1990) In the 1991 CPS the uninsured included 97 million individuals who lived in families whose income from all sources was less than the poverty level (Table 15) Another 112 million were members of

families whose income was less than two times the poverty level

Uninsured individuals in low-income (less than two times the poverty level) families comprised 602 percent of the total uninsured in the 1991 CPS and they had higher-than-average uninsurance rates Based on data including cover sheet children in the 1991 CPS157 percent of the non-elderly were uninsured compared with 287 percent of the poor non-elderly In contrast 62 percent of individuals whose family income was at least three times the poverty level were lacking insurance Thus the probability of low-income family members being without insurance was 18 times the national average of the non-elderly population and 46 times that of high-income families

From 1988 through 1991 insurance coverage declined in all income groups except the poor Coverageof poor families remained stable because Medicaid

Health Care Flnanclq ReviewFall1992vohuoe 14Nber 1 49

insured more children in poor families All higher income groups lost coverage however as employershysponsored coverage of workers and their dependents declined and insurance premiums for individual purchasers of insurance rose

Geographic distributions of tbe uninsured

Insurance coverage varies widely by area of the country Geographic differences in coverage are affected by interrelated factors including work force attachment wage rates firm size and type of industry (US Congress 1990) Cause-and-effect relationships

among these factors are not clearly defined but areas in which workers receive high wages work for large firms and belong to unions have relatively fewer uninsured than other areas

Based on data including cover sheet children the 1991 CPS shows 90 percent of the population in New England States without insurance compared with 203 percent of the population in West South Central States (Table 16 Figure 4) In absolute terms three divisions-the West South Central the Pacific and the South Atlantic-bad more than one-half of the uninsured with S4million 68 million and 68 million respectively

Table 15 Number and percent of uninsured persons by family Income relative to the poverty level

United States 1980middot91

Total Family Income

Suovey uninsured population1

100 to 199 times 200 to 299 times Below poverty level2 poverty level poverty level

300 or more times poverty level

Number In thousands including cover sheet children3

1991 34719 9696 11222 6397 7405 1990 33385 9581 10631 5903 7269 1989 3268(1 9738 10198 5608 7136 198S 31026 9712 9928 5361 6025

Number in thousands excluding cover sheet children3

1991 39629 11183 12527 7325 8594 1990 38047 10932 11955 6736 8425 1989 36830 10844 11400 6475 8111 198S 34823 10920 10894 6139 6870 1987 37357 11015 11063 6327 8951 1985 37055 11218 11263 6654 7920 1980 30474 8043 9098 5853 7480

Percent of total uninsured population including cover sheet children3

1991 1000 279 323 184 213 1990 1000 287 318 177 218 1989 1000 298 312 172 218 198S 1000 313 320 173 194

Percent of total uninsured population excluding cover sheet children3

1991 1000 282 316 185 217 1990 1000 287 314 177 221 1989 1000 294 310 176 220 198S 1000 314 313 176 197 1987 1000 295 296 169 240 1985 1000 303 304 180 214 1980 1000 264 299 192 245

Percent of people within income category including cover sheet children3

1991 NA 287 240 133 62 1990 NA 302 233 130 59 1989 NA 305 224 123 59 198S NA 300 225 117 51

Percent of people within income category excluding cover sheet children3

1991 NA 331 308 153 71 1990 NA 344 298 149 68 1989 NA 340 279 142 67 198S NA 337 279 134 58 1987 NA 338 284 136 78 1985 NA 330 273 140 75 1980 NA 305 230 121 71 1CMIIan non-institUtionalized populallon in the United States and mliltary personnel living outside military bases or on military bases with their larnliles 2lncludes persona in famlies with negative Income 3jn the 1988-91 surveys additional questiOnamp concerning heallh insurance statuamp of children WEfEI asked Thla set of questiOM Is referred to as cover ahHt qunllone Reaponeea to lhese questions resulted in additional children being assigned health insurance coverage

NOTE NA IndiCates lhat comparable atatlstlcs are not available

SOURCE US Bweau of the Census Current PopuJalion Survey 1988-91 labUlallons prepared by Fu Aampsoclates Ud for the Health Care Financing Admlnialfatlon Oflicamp of the ActuafY

so

AJthough the uninsured are an increasing proportion of the population in all divisions except the Mountain States much of the recent growth in the uninsured population occurred in two divisions From 1988 through 1991middot nearly 33 percent of the increase in the number of uninsured took place in the South Atlantic States (13 million out of a total increase of 37 million) Another 25 percent of the increase took place in the Pacific States where the number of uninsured grew by more than 09 million In relative tenns New England experienced the largest regional increase in the percentage of population without insurance from 1988 through 1991 (30 percent) from 09 million to 12 million Despite this increase New England still maintained the lowest percentage of the population without insurance coverage from any source

Work force attachment

Because insurance coverage in the United States has evolved as a work-related system of private health insurance supplemented by public insurance some advocates of insurance reform would build on the system to reduce the uninsured population One of their recommendations includes extending employershysponsored insurance to uninsured workers and their dependents (eg The Pepper Commission 1990) Proponents of extended employer-sponsored insurance believe it would be less disruptive and more effective than other solutions because the uninsured population includes large numbers of workers and their dependents

Nearly 304 million uninsured or 87 S percent of the total uninsured including cover sheet children in the 1991 CPS were members of families in which the family member with the highest earnings (the family head) was in the work force (derived from Table 17) About 540 percent of the uninsured were members of families headed by full-year full-time workers Another 220 percent of the uninsured lived in families headed by part-year full-time workers

Families headed by full-time full-year workers probably would gain coverage from proposals to expand employer-sponsored health insurance However mandated coverage of workers also could have negative effects on employment and wages in some labor markets (Feldstein 1988) Firms facing higher total compensation costs could respond by eliminating jobs holding down wages raising prices or going out of business

Individuals with little or no work force attachment would not easily be reached by expanded employershysponsored insurance Compared with other workers for instance part-year and part-time workers are offered insurance through their jobs less often switch jobs more frequently and are disproportionately likely to be without insurance As an example 251 percent of individuals in families headed by part-year full-time workers were uninsured compared with 118 percent of individuals in families headed by full-year full-time workers

Moreover approximately one-eighth of the uninsured-43 million individuals based on data

Table 16

Number and percent of Insured persons1 by census division United States selected years 1980-91

Excluding cover sheet children Including cover sheet chlldreti

division 1980 1988 1991 1988 1991

Number in thOusands

Total United States 30474 34823 39629 31026 34719 New England 1256 1062 1408 891 1160 Middle Atlantic 4137 3987 4852 3473 4166 East North Central 4187 4517 4863 3911 4168 West North Central 1948 1780 2074 1587 1810 South Atlantic 5494 6346 7720 5577 6831 East South Central 2243 2583 2790 2303 2395 West South Central 4436 5814 8006 5331 5362 Mountain 1978 2282 2354 2101 2070 Pacific 4795 6452 7561 5853 6758

Percent of total population

Total United States 137 144 159 129 139 New England 104 64 109 70 90 Middle Atlantic 113 108 128 94 110 East North Central 102 109 115 94 99 West North Central 116 101 116 90 101 South Atlantic 150 154 178 135 157 East South Central 157 173 182 155 157 West South Central 191 219 227 2Q1 2Q3 Mountain 177 175 172 161 151 Pacmc 153 176 193 159 173

2

1Civllian non-lnstitutiooalzed population In the United States and military personnel living outsicle military bases or on mHitary bases with their families 21n the 1988-91 surveys additional questiOn$ concemlng health insurance sta1us of children were asked Responses to these questions reeul1ed In acldi1iona children being assigned health insurance coverage SOURCE US Bureau of 1he Census Current Populallon Stnvey 1980-91 tabulations preplll$d by Fu Assocla1es Ltd for the Health Care Rnanclng Administration Offioe of the Actuary

Health Care Finaltdog ReviewFa11199ZVolurnt 14 Number 1 51

Figure 4 Percentage of population with no heaHh Insurance coverage

by census division United States 1991

West North Central 101

bull 0 Less than 12 percent

~ 12-16 percent

bull More than 16 percent

SOURCE US Bureau of the Gensus Current Population Survey Mar 1991 tabulations prepared by Fu Associates ltd for the Health Care Financing Adminislration Office of the Actuary

including cover sheet children in 1991-were in families whose head is not in the work force This group probably contained more long-term uninsured individuals than other groups but the data may be misleading in some cases Family heads not in the work force can include retirees disabled persons and individuals just entering the labor force as well as the chronically unemployed

Employer-sponsored coverage of workers and their dependents has been declining over the last decade Uninsured members of families headed by full-year full-time workers increased by 181 percent (from 159 million to 187 million) while the overall number of uninsured increased by 119 percent (from 310 million to 347 million) from I 988 through 1991 The trend toward relatively more uninsured workers reflects factors such as high insurance premiums less access to insurance by small firms and increased employee cost sharing in firms offering group insurance to their employees

Uninsured worker-specific characteristics

The work force includes several subgroups of uninsured workers Some are not offered insurance or

do not have adequate wages to purchase it Others have adequate wages but cannot buy insurance because of their health status Still others voluntarily decline to purchase insurance even when it is affordable and available

Table 18 shows the number and percent of uninsured full-year full-time workers by hourly wage rate in 1989 dollars This group of workers had better access to health insurance than part-time workers and information on their insurance coverage was relatively consistent over time As a result the data may be particularly useful in evaluating insurance coverage of workers and their independents

Insurance coverage of workers is highly correlated with income and skewed toward high-wage earners In the 1991 CPS 112 percent of workers with full-time full-year employment were uninsured but lowmiddotwage workers had highermiddotthan-average rates of uninsurance Some 518 percent of uninsured workers earned less than $6 per hour and another 290 percent earned from $6 to $10 per hour The remaining 192 percent earned at least $10 per hour

The asymmetric distribution of health insurance coverage among workers can be seen by comparing coverage of workers in different wage categories

Helth Care Flnanclnf ReviewFall1992volume 14 Number 1 52

Table 17 Number and percent of uninsured persons by work status of famlty head1 United States selected

years 1980-91 Family heads working full-year and Family heads working part-year and

SUivey Total uninsured

number of hours per week number of hours per week Family head

not Inwork force

35 or more 1middot20 hours 21-34 hours hours

35 or more 1middot20 hours 21-34 hours hours

Number In thousands including cover sheet children2

1991 34719 650 1265 18732 845 1268 7622 4337 1990 33385 752 1295 t79n 835 1o75 7070 4381 1989 32680 707 1119 17786 1017 1161 6650 4239 1988 31026 616 1185 15860 876 1100 6865 4524

Number in thousands excluding cover sheet children2

1991 39629 721 1436 21616 9n 1410 8390 5080 1990 38047 798 1448 20612 981 1245 7800 5164 1989 36830 783 1273 20285 1114 1259 7293 4823 1988 34823 653 1304 17896 1001 1245 7454 5269 1987 37357 692 1451 19831 1233 1462 7231 5066 1985 37055 759 1346 19086 1112 1402 7460 5283 1980 30474 571 839 15661 970 980 6294 4940

Percent of total uninsured including cover sheet chlldren2

1991 1000 19 36 540 24 37 220 125 1990 1000 23 39 538 25 32 212 131 1989 1000 22 34 544 31 36 203 130 1988 1000 20 38 511 28 35 221 146

Percent of total uninsured excluding cover sheet children2

1991 1000 18 36 545 25 36 212 128 1990 1000 21 38 542 26 33 205 136 1989 1000 21 35 551 30 34 198 131 1988 1000 19 37 514 29 36 214 151 1987 1000 19 39 531 33 39 194 136 1985 1000 20 36 515 30 38 201 143 1980 1000 19 28 514 32 32 207 162

Percent uninsured including cover sheet children2

1991 NA 206 258 118 193 290 251 102 1990 NA 249 271 113 187 296 245 104 1989 NA 225 240 114 230 287 252 95 1988 NA 215 266 104 200 291 247 101

Percent uninsured excluding cover sheet children2

1991 NA 229 292 136 223 323 276 119 1990 NA 264 303 129 220 343 270 122 1989 NA 249 273 130 251 311 276 109 1988 NA 228 293 117 229 330 269 117 1987 NA 274 321 132 270 373 253 120 1985 NA 282 313 131 257 363 256 127 1980 NA 242 263 110 242 303 200 142 1Family head Is defined as the family member with the highest income 2tn the 1988-91 surveys additional questions concerning health insurance status of children were asked This set of questions Is referred to as cover sheet questions Responses to lhasa questions resulted in additional children being assigned health insurance coverage

NOTE NA indicates that comparable statistics ere not available SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Finaflcing Administration Office of the Actuary

Workers earning $6 to $999 per hour had an 113~percent chance of being uninsured but other workers had much different coverage rates At the extremes the probabilities of being without insurance ranged from a high of 396 percent for low~wage earners (earning $335 or less per hour) to a low of 29 percent for high~wage earners (earning $15 or more per hour)

The proportion of full~time full~year workers without insurance has been increasing over time From 1980 through 1991 the number of uninsured workers increased by 747 percent from 51 million to 89 million with most of the increase affecting low~ to

middle-wage earners During this period about 40 percent of workers earning $335 or less were uninsured However the number of uninsured workers earning $336 to $599 per hour increased by nearly 10 percentage points from 176 percent to 275 percent and the number of uninsured workers earning $600 to $999 increased by 21 percentage points from 92 percent to 113 percent

A number of explanations for the decline in coverage of workers have been offered (Kronick 1991) One hypothesis is that demand for insurance by poor workers declined as the price of medical care increased during the 1980s The theory is that demand for

Health Care Fibullanclnc ReviewFaD 1992Votume J4Number 1 53

Table 18 Number and percent of uninsured fullwyear full-time workers by hourly wage rate in 1989 dollars

United States 1980-91 Total Hourly wage rate in 1989 dollars Survey uninsured

year workers1 bull2 $335 or less $336-599 $60()999 $1000-1499 $1500 or more

Number in thousands2

1991 8857 1320 3271 2569 1121 576 1990 8362 1196 2867 2610 1066 623 1989 8349 1185 2785 2585 1134 660 1988 7255 1257 2493 2079 919 508 1987 6978 1137 2475 2003 776 587 1988 6683 1273 2220 1888 770 532 1985 6477 1117 2282 1767 809 502 1984 5419 991 1862 1452 689 428 1983 4716 943 1459 1430 539 344 1982 1981

4769 NA

947 NA

1535 NA

1417 NA

559 NA

311 NA

1980 5069 827 1262 1761 716 503

Percent of all workeW

1991 1000 149 369 290 127 65 1990 1000 143 343 312 127 74 1989 1000 142 334 310 136 79 1988 1000 173 344 287 127 70 1987 1000 163 355 287 111 84 1986 1000 191 332 283 115 80 1985 1000 172 352 273 125 78 1984 1000 183 344 268 127 79 1983 1000 200 309 303 114 73 1982 1000 199 322 297 117 65 1981 NA NA NA NA NA NA 1980 1000 163 249 347 141 99

Percent of workers~ In each category

1991 112 396 275 113 53 29 1990 107 388 270 114 52 30 1989 107 403 275 118 54 31 1988 96 430 252 98 47 25 1987 96 386 243 99 41 30 1988 94 446 231 90 41 30 1985 94 408 230 90 43 30 1984 83 405 194 77 38 28 1983 76 401 178 72 33 23 1982 75 406 178 71 34 20 1981 NA NA NA NA NA NA 1980 80 398 176 92 43 29 1Civilian non-institutionalited populalion In the United States and mlmaty personnel living outside military bases or on military bases with their families 2worked during year priOf to the survey

NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Popv81on SuiVey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care Financing Administration Office ofthe Actuary

insurance by low-wage earners has fallen because the poor face limited Imancial risk by going without it That is they have few assets to protect and they can receive free or low-cost care through community programs to help the medically indigent

An alternative explanation is that supply and demand in labor markets play a critical role in determining the availability of employer-sponsored insurance Lowshywage workers generally are thought to be more concerned about take-home pay than fringe benefits because of a strong need for income to purchase necessities while employers are more concerned about total compensation than the split between wages and fringe benefits Therefore health insurance may not be offered by employers or demanded by employees in low-wage job markets

Uninsured workers by industry

In 1991 169 percent of all full- and part-time workers were uninsured but coverage varied greatly across industries (Table 19) Industries in which lowshywage seasonal or part-time jobs were common had higher-than-average shares of uninsured workers Agriculture forestry and fisheries had the largest percent of uninsured workers (413 percent) for example while construction retail trade and business and personal services also had large proportions of uninsured workers

Industry trends are consistent with other data on uninsured workers From 1980 through 1991 the proportion of workers without insurance increased in all industries except government and the

Health Care Financing Review Falll992volume 14 Number 1 54

insured more children in poor families All higher income groups lost coverage however as employershysponsored coverage of workers and their dependents declined and insurance premiums for individual purchasers of insurance rose

Geographic distributions of tbe uninsured

Insurance coverage varies widely by area of the country Geographic differences in coverage are affected by interrelated factors including work force attachment wage rates firm size and type of industry (US Congress 1990) Cause-and-effect relationships

among these factors are not clearly defined but areas in which workers receive high wages work for large firms and belong to unions have relatively fewer uninsured than other areas

Based on data including cover sheet children the 1991 CPS shows 90 percent of the population in New England States without insurance compared with 203 percent of the population in West South Central States (Table 16 Figure 4) In absolute terms three divisions-the West South Central the Pacific and the South Atlantic-bad more than one-half of the uninsured with S4million 68 million and 68 million respectively

Table 15 Number and percent of uninsured persons by family Income relative to the poverty level

United States 1980middot91

Total Family Income

Suovey uninsured population1

100 to 199 times 200 to 299 times Below poverty level2 poverty level poverty level

300 or more times poverty level

Number In thousands including cover sheet children3

1991 34719 9696 11222 6397 7405 1990 33385 9581 10631 5903 7269 1989 3268(1 9738 10198 5608 7136 198S 31026 9712 9928 5361 6025

Number in thousands excluding cover sheet children3

1991 39629 11183 12527 7325 8594 1990 38047 10932 11955 6736 8425 1989 36830 10844 11400 6475 8111 198S 34823 10920 10894 6139 6870 1987 37357 11015 11063 6327 8951 1985 37055 11218 11263 6654 7920 1980 30474 8043 9098 5853 7480

Percent of total uninsured population including cover sheet children3

1991 1000 279 323 184 213 1990 1000 287 318 177 218 1989 1000 298 312 172 218 198S 1000 313 320 173 194

Percent of total uninsured population excluding cover sheet children3

1991 1000 282 316 185 217 1990 1000 287 314 177 221 1989 1000 294 310 176 220 198S 1000 314 313 176 197 1987 1000 295 296 169 240 1985 1000 303 304 180 214 1980 1000 264 299 192 245

Percent of people within income category including cover sheet children3

1991 NA 287 240 133 62 1990 NA 302 233 130 59 1989 NA 305 224 123 59 198S NA 300 225 117 51

Percent of people within income category excluding cover sheet children3

1991 NA 331 308 153 71 1990 NA 344 298 149 68 1989 NA 340 279 142 67 198S NA 337 279 134 58 1987 NA 338 284 136 78 1985 NA 330 273 140 75 1980 NA 305 230 121 71 1CMIIan non-institUtionalized populallon in the United States and mliltary personnel living outside military bases or on military bases with their larnliles 2lncludes persona in famlies with negative Income 3jn the 1988-91 surveys additional questiOnamp concerning heallh insurance statuamp of children WEfEI asked Thla set of questiOM Is referred to as cover ahHt qunllone Reaponeea to lhese questions resulted in additional children being assigned health insurance coverage

NOTE NA IndiCates lhat comparable atatlstlcs are not available

SOURCE US Bweau of the Census Current PopuJalion Survey 1988-91 labUlallons prepared by Fu Aampsoclates Ud for the Health Care Financing Admlnialfatlon Oflicamp of the ActuafY

so

AJthough the uninsured are an increasing proportion of the population in all divisions except the Mountain States much of the recent growth in the uninsured population occurred in two divisions From 1988 through 1991middot nearly 33 percent of the increase in the number of uninsured took place in the South Atlantic States (13 million out of a total increase of 37 million) Another 25 percent of the increase took place in the Pacific States where the number of uninsured grew by more than 09 million In relative tenns New England experienced the largest regional increase in the percentage of population without insurance from 1988 through 1991 (30 percent) from 09 million to 12 million Despite this increase New England still maintained the lowest percentage of the population without insurance coverage from any source

Work force attachment

Because insurance coverage in the United States has evolved as a work-related system of private health insurance supplemented by public insurance some advocates of insurance reform would build on the system to reduce the uninsured population One of their recommendations includes extending employershysponsored insurance to uninsured workers and their dependents (eg The Pepper Commission 1990) Proponents of extended employer-sponsored insurance believe it would be less disruptive and more effective than other solutions because the uninsured population includes large numbers of workers and their dependents

Nearly 304 million uninsured or 87 S percent of the total uninsured including cover sheet children in the 1991 CPS were members of families in which the family member with the highest earnings (the family head) was in the work force (derived from Table 17) About 540 percent of the uninsured were members of families headed by full-year full-time workers Another 220 percent of the uninsured lived in families headed by part-year full-time workers

Families headed by full-time full-year workers probably would gain coverage from proposals to expand employer-sponsored health insurance However mandated coverage of workers also could have negative effects on employment and wages in some labor markets (Feldstein 1988) Firms facing higher total compensation costs could respond by eliminating jobs holding down wages raising prices or going out of business

Individuals with little or no work force attachment would not easily be reached by expanded employershysponsored insurance Compared with other workers for instance part-year and part-time workers are offered insurance through their jobs less often switch jobs more frequently and are disproportionately likely to be without insurance As an example 251 percent of individuals in families headed by part-year full-time workers were uninsured compared with 118 percent of individuals in families headed by full-year full-time workers

Moreover approximately one-eighth of the uninsured-43 million individuals based on data

Table 16

Number and percent of Insured persons1 by census division United States selected years 1980-91

Excluding cover sheet children Including cover sheet chlldreti

division 1980 1988 1991 1988 1991

Number in thOusands

Total United States 30474 34823 39629 31026 34719 New England 1256 1062 1408 891 1160 Middle Atlantic 4137 3987 4852 3473 4166 East North Central 4187 4517 4863 3911 4168 West North Central 1948 1780 2074 1587 1810 South Atlantic 5494 6346 7720 5577 6831 East South Central 2243 2583 2790 2303 2395 West South Central 4436 5814 8006 5331 5362 Mountain 1978 2282 2354 2101 2070 Pacific 4795 6452 7561 5853 6758

Percent of total population

Total United States 137 144 159 129 139 New England 104 64 109 70 90 Middle Atlantic 113 108 128 94 110 East North Central 102 109 115 94 99 West North Central 116 101 116 90 101 South Atlantic 150 154 178 135 157 East South Central 157 173 182 155 157 West South Central 191 219 227 2Q1 2Q3 Mountain 177 175 172 161 151 Pacmc 153 176 193 159 173

2

1Civllian non-lnstitutiooalzed population In the United States and military personnel living outsicle military bases or on mHitary bases with their families 21n the 1988-91 surveys additional questiOn$ concemlng health insurance sta1us of children were asked Responses to these questions reeul1ed In acldi1iona children being assigned health insurance coverage SOURCE US Bureau of 1he Census Current Populallon Stnvey 1980-91 tabulations preplll$d by Fu Assocla1es Ltd for the Health Care Rnanclng Administration Offioe of the Actuary

Health Care Finaltdog ReviewFa11199ZVolurnt 14 Number 1 51

Figure 4 Percentage of population with no heaHh Insurance coverage

by census division United States 1991

West North Central 101

bull 0 Less than 12 percent

~ 12-16 percent

bull More than 16 percent

SOURCE US Bureau of the Gensus Current Population Survey Mar 1991 tabulations prepared by Fu Associates ltd for the Health Care Financing Adminislration Office of the Actuary

including cover sheet children in 1991-were in families whose head is not in the work force This group probably contained more long-term uninsured individuals than other groups but the data may be misleading in some cases Family heads not in the work force can include retirees disabled persons and individuals just entering the labor force as well as the chronically unemployed

Employer-sponsored coverage of workers and their dependents has been declining over the last decade Uninsured members of families headed by full-year full-time workers increased by 181 percent (from 159 million to 187 million) while the overall number of uninsured increased by 119 percent (from 310 million to 347 million) from I 988 through 1991 The trend toward relatively more uninsured workers reflects factors such as high insurance premiums less access to insurance by small firms and increased employee cost sharing in firms offering group insurance to their employees

Uninsured worker-specific characteristics

The work force includes several subgroups of uninsured workers Some are not offered insurance or

do not have adequate wages to purchase it Others have adequate wages but cannot buy insurance because of their health status Still others voluntarily decline to purchase insurance even when it is affordable and available

Table 18 shows the number and percent of uninsured full-year full-time workers by hourly wage rate in 1989 dollars This group of workers had better access to health insurance than part-time workers and information on their insurance coverage was relatively consistent over time As a result the data may be particularly useful in evaluating insurance coverage of workers and their independents

Insurance coverage of workers is highly correlated with income and skewed toward high-wage earners In the 1991 CPS 112 percent of workers with full-time full-year employment were uninsured but lowmiddotwage workers had highermiddotthan-average rates of uninsurance Some 518 percent of uninsured workers earned less than $6 per hour and another 290 percent earned from $6 to $10 per hour The remaining 192 percent earned at least $10 per hour

The asymmetric distribution of health insurance coverage among workers can be seen by comparing coverage of workers in different wage categories

Helth Care Flnanclnf ReviewFall1992volume 14 Number 1 52

Table 17 Number and percent of uninsured persons by work status of famlty head1 United States selected

years 1980-91 Family heads working full-year and Family heads working part-year and

SUivey Total uninsured

number of hours per week number of hours per week Family head

not Inwork force

35 or more 1middot20 hours 21-34 hours hours

35 or more 1middot20 hours 21-34 hours hours

Number In thousands including cover sheet children2

1991 34719 650 1265 18732 845 1268 7622 4337 1990 33385 752 1295 t79n 835 1o75 7070 4381 1989 32680 707 1119 17786 1017 1161 6650 4239 1988 31026 616 1185 15860 876 1100 6865 4524

Number in thousands excluding cover sheet children2

1991 39629 721 1436 21616 9n 1410 8390 5080 1990 38047 798 1448 20612 981 1245 7800 5164 1989 36830 783 1273 20285 1114 1259 7293 4823 1988 34823 653 1304 17896 1001 1245 7454 5269 1987 37357 692 1451 19831 1233 1462 7231 5066 1985 37055 759 1346 19086 1112 1402 7460 5283 1980 30474 571 839 15661 970 980 6294 4940

Percent of total uninsured including cover sheet chlldren2

1991 1000 19 36 540 24 37 220 125 1990 1000 23 39 538 25 32 212 131 1989 1000 22 34 544 31 36 203 130 1988 1000 20 38 511 28 35 221 146

Percent of total uninsured excluding cover sheet children2

1991 1000 18 36 545 25 36 212 128 1990 1000 21 38 542 26 33 205 136 1989 1000 21 35 551 30 34 198 131 1988 1000 19 37 514 29 36 214 151 1987 1000 19 39 531 33 39 194 136 1985 1000 20 36 515 30 38 201 143 1980 1000 19 28 514 32 32 207 162

Percent uninsured including cover sheet children2

1991 NA 206 258 118 193 290 251 102 1990 NA 249 271 113 187 296 245 104 1989 NA 225 240 114 230 287 252 95 1988 NA 215 266 104 200 291 247 101

Percent uninsured excluding cover sheet children2

1991 NA 229 292 136 223 323 276 119 1990 NA 264 303 129 220 343 270 122 1989 NA 249 273 130 251 311 276 109 1988 NA 228 293 117 229 330 269 117 1987 NA 274 321 132 270 373 253 120 1985 NA 282 313 131 257 363 256 127 1980 NA 242 263 110 242 303 200 142 1Family head Is defined as the family member with the highest income 2tn the 1988-91 surveys additional questions concerning health insurance status of children were asked This set of questions Is referred to as cover sheet questions Responses to lhasa questions resulted in additional children being assigned health insurance coverage

NOTE NA indicates that comparable statistics ere not available SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Finaflcing Administration Office of the Actuary

Workers earning $6 to $999 per hour had an 113~percent chance of being uninsured but other workers had much different coverage rates At the extremes the probabilities of being without insurance ranged from a high of 396 percent for low~wage earners (earning $335 or less per hour) to a low of 29 percent for high~wage earners (earning $15 or more per hour)

The proportion of full~time full~year workers without insurance has been increasing over time From 1980 through 1991 the number of uninsured workers increased by 747 percent from 51 million to 89 million with most of the increase affecting low~ to

middle-wage earners During this period about 40 percent of workers earning $335 or less were uninsured However the number of uninsured workers earning $336 to $599 per hour increased by nearly 10 percentage points from 176 percent to 275 percent and the number of uninsured workers earning $600 to $999 increased by 21 percentage points from 92 percent to 113 percent

A number of explanations for the decline in coverage of workers have been offered (Kronick 1991) One hypothesis is that demand for insurance by poor workers declined as the price of medical care increased during the 1980s The theory is that demand for

Health Care Fibullanclnc ReviewFaD 1992Votume J4Number 1 53

Table 18 Number and percent of uninsured fullwyear full-time workers by hourly wage rate in 1989 dollars

United States 1980-91 Total Hourly wage rate in 1989 dollars Survey uninsured

year workers1 bull2 $335 or less $336-599 $60()999 $1000-1499 $1500 or more

Number in thousands2

1991 8857 1320 3271 2569 1121 576 1990 8362 1196 2867 2610 1066 623 1989 8349 1185 2785 2585 1134 660 1988 7255 1257 2493 2079 919 508 1987 6978 1137 2475 2003 776 587 1988 6683 1273 2220 1888 770 532 1985 6477 1117 2282 1767 809 502 1984 5419 991 1862 1452 689 428 1983 4716 943 1459 1430 539 344 1982 1981

4769 NA

947 NA

1535 NA

1417 NA

559 NA

311 NA

1980 5069 827 1262 1761 716 503

Percent of all workeW

1991 1000 149 369 290 127 65 1990 1000 143 343 312 127 74 1989 1000 142 334 310 136 79 1988 1000 173 344 287 127 70 1987 1000 163 355 287 111 84 1986 1000 191 332 283 115 80 1985 1000 172 352 273 125 78 1984 1000 183 344 268 127 79 1983 1000 200 309 303 114 73 1982 1000 199 322 297 117 65 1981 NA NA NA NA NA NA 1980 1000 163 249 347 141 99

Percent of workers~ In each category

1991 112 396 275 113 53 29 1990 107 388 270 114 52 30 1989 107 403 275 118 54 31 1988 96 430 252 98 47 25 1987 96 386 243 99 41 30 1988 94 446 231 90 41 30 1985 94 408 230 90 43 30 1984 83 405 194 77 38 28 1983 76 401 178 72 33 23 1982 75 406 178 71 34 20 1981 NA NA NA NA NA NA 1980 80 398 176 92 43 29 1Civilian non-institutionalited populalion In the United States and mlmaty personnel living outside military bases or on military bases with their families 2worked during year priOf to the survey

NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Popv81on SuiVey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care Financing Administration Office ofthe Actuary

insurance by low-wage earners has fallen because the poor face limited Imancial risk by going without it That is they have few assets to protect and they can receive free or low-cost care through community programs to help the medically indigent

An alternative explanation is that supply and demand in labor markets play a critical role in determining the availability of employer-sponsored insurance Lowshywage workers generally are thought to be more concerned about take-home pay than fringe benefits because of a strong need for income to purchase necessities while employers are more concerned about total compensation than the split between wages and fringe benefits Therefore health insurance may not be offered by employers or demanded by employees in low-wage job markets

Uninsured workers by industry

In 1991 169 percent of all full- and part-time workers were uninsured but coverage varied greatly across industries (Table 19) Industries in which lowshywage seasonal or part-time jobs were common had higher-than-average shares of uninsured workers Agriculture forestry and fisheries had the largest percent of uninsured workers (413 percent) for example while construction retail trade and business and personal services also had large proportions of uninsured workers

Industry trends are consistent with other data on uninsured workers From 1980 through 1991 the proportion of workers without insurance increased in all industries except government and the

Health Care Financing Review Falll992volume 14 Number 1 54

AJthough the uninsured are an increasing proportion of the population in all divisions except the Mountain States much of the recent growth in the uninsured population occurred in two divisions From 1988 through 1991middot nearly 33 percent of the increase in the number of uninsured took place in the South Atlantic States (13 million out of a total increase of 37 million) Another 25 percent of the increase took place in the Pacific States where the number of uninsured grew by more than 09 million In relative tenns New England experienced the largest regional increase in the percentage of population without insurance from 1988 through 1991 (30 percent) from 09 million to 12 million Despite this increase New England still maintained the lowest percentage of the population without insurance coverage from any source

Work force attachment

Because insurance coverage in the United States has evolved as a work-related system of private health insurance supplemented by public insurance some advocates of insurance reform would build on the system to reduce the uninsured population One of their recommendations includes extending employershysponsored insurance to uninsured workers and their dependents (eg The Pepper Commission 1990) Proponents of extended employer-sponsored insurance believe it would be less disruptive and more effective than other solutions because the uninsured population includes large numbers of workers and their dependents

Nearly 304 million uninsured or 87 S percent of the total uninsured including cover sheet children in the 1991 CPS were members of families in which the family member with the highest earnings (the family head) was in the work force (derived from Table 17) About 540 percent of the uninsured were members of families headed by full-year full-time workers Another 220 percent of the uninsured lived in families headed by part-year full-time workers

Families headed by full-time full-year workers probably would gain coverage from proposals to expand employer-sponsored health insurance However mandated coverage of workers also could have negative effects on employment and wages in some labor markets (Feldstein 1988) Firms facing higher total compensation costs could respond by eliminating jobs holding down wages raising prices or going out of business

Individuals with little or no work force attachment would not easily be reached by expanded employershysponsored insurance Compared with other workers for instance part-year and part-time workers are offered insurance through their jobs less often switch jobs more frequently and are disproportionately likely to be without insurance As an example 251 percent of individuals in families headed by part-year full-time workers were uninsured compared with 118 percent of individuals in families headed by full-year full-time workers

Moreover approximately one-eighth of the uninsured-43 million individuals based on data

Table 16

Number and percent of Insured persons1 by census division United States selected years 1980-91

Excluding cover sheet children Including cover sheet chlldreti

division 1980 1988 1991 1988 1991

Number in thOusands

Total United States 30474 34823 39629 31026 34719 New England 1256 1062 1408 891 1160 Middle Atlantic 4137 3987 4852 3473 4166 East North Central 4187 4517 4863 3911 4168 West North Central 1948 1780 2074 1587 1810 South Atlantic 5494 6346 7720 5577 6831 East South Central 2243 2583 2790 2303 2395 West South Central 4436 5814 8006 5331 5362 Mountain 1978 2282 2354 2101 2070 Pacific 4795 6452 7561 5853 6758

Percent of total population

Total United States 137 144 159 129 139 New England 104 64 109 70 90 Middle Atlantic 113 108 128 94 110 East North Central 102 109 115 94 99 West North Central 116 101 116 90 101 South Atlantic 150 154 178 135 157 East South Central 157 173 182 155 157 West South Central 191 219 227 2Q1 2Q3 Mountain 177 175 172 161 151 Pacmc 153 176 193 159 173

2

1Civllian non-lnstitutiooalzed population In the United States and military personnel living outsicle military bases or on mHitary bases with their families 21n the 1988-91 surveys additional questiOn$ concemlng health insurance sta1us of children were asked Responses to these questions reeul1ed In acldi1iona children being assigned health insurance coverage SOURCE US Bureau of 1he Census Current Populallon Stnvey 1980-91 tabulations preplll$d by Fu Assocla1es Ltd for the Health Care Rnanclng Administration Offioe of the Actuary

Health Care Finaltdog ReviewFa11199ZVolurnt 14 Number 1 51

Figure 4 Percentage of population with no heaHh Insurance coverage

by census division United States 1991

West North Central 101

bull 0 Less than 12 percent

~ 12-16 percent

bull More than 16 percent

SOURCE US Bureau of the Gensus Current Population Survey Mar 1991 tabulations prepared by Fu Associates ltd for the Health Care Financing Adminislration Office of the Actuary

including cover sheet children in 1991-were in families whose head is not in the work force This group probably contained more long-term uninsured individuals than other groups but the data may be misleading in some cases Family heads not in the work force can include retirees disabled persons and individuals just entering the labor force as well as the chronically unemployed

Employer-sponsored coverage of workers and their dependents has been declining over the last decade Uninsured members of families headed by full-year full-time workers increased by 181 percent (from 159 million to 187 million) while the overall number of uninsured increased by 119 percent (from 310 million to 347 million) from I 988 through 1991 The trend toward relatively more uninsured workers reflects factors such as high insurance premiums less access to insurance by small firms and increased employee cost sharing in firms offering group insurance to their employees

Uninsured worker-specific characteristics

The work force includes several subgroups of uninsured workers Some are not offered insurance or

do not have adequate wages to purchase it Others have adequate wages but cannot buy insurance because of their health status Still others voluntarily decline to purchase insurance even when it is affordable and available

Table 18 shows the number and percent of uninsured full-year full-time workers by hourly wage rate in 1989 dollars This group of workers had better access to health insurance than part-time workers and information on their insurance coverage was relatively consistent over time As a result the data may be particularly useful in evaluating insurance coverage of workers and their independents

Insurance coverage of workers is highly correlated with income and skewed toward high-wage earners In the 1991 CPS 112 percent of workers with full-time full-year employment were uninsured but lowmiddotwage workers had highermiddotthan-average rates of uninsurance Some 518 percent of uninsured workers earned less than $6 per hour and another 290 percent earned from $6 to $10 per hour The remaining 192 percent earned at least $10 per hour

The asymmetric distribution of health insurance coverage among workers can be seen by comparing coverage of workers in different wage categories

Helth Care Flnanclnf ReviewFall1992volume 14 Number 1 52

Table 17 Number and percent of uninsured persons by work status of famlty head1 United States selected

years 1980-91 Family heads working full-year and Family heads working part-year and

SUivey Total uninsured

number of hours per week number of hours per week Family head

not Inwork force

35 or more 1middot20 hours 21-34 hours hours

35 or more 1middot20 hours 21-34 hours hours

Number In thousands including cover sheet children2

1991 34719 650 1265 18732 845 1268 7622 4337 1990 33385 752 1295 t79n 835 1o75 7070 4381 1989 32680 707 1119 17786 1017 1161 6650 4239 1988 31026 616 1185 15860 876 1100 6865 4524

Number in thousands excluding cover sheet children2

1991 39629 721 1436 21616 9n 1410 8390 5080 1990 38047 798 1448 20612 981 1245 7800 5164 1989 36830 783 1273 20285 1114 1259 7293 4823 1988 34823 653 1304 17896 1001 1245 7454 5269 1987 37357 692 1451 19831 1233 1462 7231 5066 1985 37055 759 1346 19086 1112 1402 7460 5283 1980 30474 571 839 15661 970 980 6294 4940

Percent of total uninsured including cover sheet chlldren2

1991 1000 19 36 540 24 37 220 125 1990 1000 23 39 538 25 32 212 131 1989 1000 22 34 544 31 36 203 130 1988 1000 20 38 511 28 35 221 146

Percent of total uninsured excluding cover sheet children2

1991 1000 18 36 545 25 36 212 128 1990 1000 21 38 542 26 33 205 136 1989 1000 21 35 551 30 34 198 131 1988 1000 19 37 514 29 36 214 151 1987 1000 19 39 531 33 39 194 136 1985 1000 20 36 515 30 38 201 143 1980 1000 19 28 514 32 32 207 162

Percent uninsured including cover sheet children2

1991 NA 206 258 118 193 290 251 102 1990 NA 249 271 113 187 296 245 104 1989 NA 225 240 114 230 287 252 95 1988 NA 215 266 104 200 291 247 101

Percent uninsured excluding cover sheet children2

1991 NA 229 292 136 223 323 276 119 1990 NA 264 303 129 220 343 270 122 1989 NA 249 273 130 251 311 276 109 1988 NA 228 293 117 229 330 269 117 1987 NA 274 321 132 270 373 253 120 1985 NA 282 313 131 257 363 256 127 1980 NA 242 263 110 242 303 200 142 1Family head Is defined as the family member with the highest income 2tn the 1988-91 surveys additional questions concerning health insurance status of children were asked This set of questions Is referred to as cover sheet questions Responses to lhasa questions resulted in additional children being assigned health insurance coverage

NOTE NA indicates that comparable statistics ere not available SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Finaflcing Administration Office of the Actuary

Workers earning $6 to $999 per hour had an 113~percent chance of being uninsured but other workers had much different coverage rates At the extremes the probabilities of being without insurance ranged from a high of 396 percent for low~wage earners (earning $335 or less per hour) to a low of 29 percent for high~wage earners (earning $15 or more per hour)

The proportion of full~time full~year workers without insurance has been increasing over time From 1980 through 1991 the number of uninsured workers increased by 747 percent from 51 million to 89 million with most of the increase affecting low~ to

middle-wage earners During this period about 40 percent of workers earning $335 or less were uninsured However the number of uninsured workers earning $336 to $599 per hour increased by nearly 10 percentage points from 176 percent to 275 percent and the number of uninsured workers earning $600 to $999 increased by 21 percentage points from 92 percent to 113 percent

A number of explanations for the decline in coverage of workers have been offered (Kronick 1991) One hypothesis is that demand for insurance by poor workers declined as the price of medical care increased during the 1980s The theory is that demand for

Health Care Fibullanclnc ReviewFaD 1992Votume J4Number 1 53

Table 18 Number and percent of uninsured fullwyear full-time workers by hourly wage rate in 1989 dollars

United States 1980-91 Total Hourly wage rate in 1989 dollars Survey uninsured

year workers1 bull2 $335 or less $336-599 $60()999 $1000-1499 $1500 or more

Number in thousands2

1991 8857 1320 3271 2569 1121 576 1990 8362 1196 2867 2610 1066 623 1989 8349 1185 2785 2585 1134 660 1988 7255 1257 2493 2079 919 508 1987 6978 1137 2475 2003 776 587 1988 6683 1273 2220 1888 770 532 1985 6477 1117 2282 1767 809 502 1984 5419 991 1862 1452 689 428 1983 4716 943 1459 1430 539 344 1982 1981

4769 NA

947 NA

1535 NA

1417 NA

559 NA

311 NA

1980 5069 827 1262 1761 716 503

Percent of all workeW

1991 1000 149 369 290 127 65 1990 1000 143 343 312 127 74 1989 1000 142 334 310 136 79 1988 1000 173 344 287 127 70 1987 1000 163 355 287 111 84 1986 1000 191 332 283 115 80 1985 1000 172 352 273 125 78 1984 1000 183 344 268 127 79 1983 1000 200 309 303 114 73 1982 1000 199 322 297 117 65 1981 NA NA NA NA NA NA 1980 1000 163 249 347 141 99

Percent of workers~ In each category

1991 112 396 275 113 53 29 1990 107 388 270 114 52 30 1989 107 403 275 118 54 31 1988 96 430 252 98 47 25 1987 96 386 243 99 41 30 1988 94 446 231 90 41 30 1985 94 408 230 90 43 30 1984 83 405 194 77 38 28 1983 76 401 178 72 33 23 1982 75 406 178 71 34 20 1981 NA NA NA NA NA NA 1980 80 398 176 92 43 29 1Civilian non-institutionalited populalion In the United States and mlmaty personnel living outside military bases or on military bases with their families 2worked during year priOf to the survey

NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Popv81on SuiVey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care Financing Administration Office ofthe Actuary

insurance by low-wage earners has fallen because the poor face limited Imancial risk by going without it That is they have few assets to protect and they can receive free or low-cost care through community programs to help the medically indigent

An alternative explanation is that supply and demand in labor markets play a critical role in determining the availability of employer-sponsored insurance Lowshywage workers generally are thought to be more concerned about take-home pay than fringe benefits because of a strong need for income to purchase necessities while employers are more concerned about total compensation than the split between wages and fringe benefits Therefore health insurance may not be offered by employers or demanded by employees in low-wage job markets

Uninsured workers by industry

In 1991 169 percent of all full- and part-time workers were uninsured but coverage varied greatly across industries (Table 19) Industries in which lowshywage seasonal or part-time jobs were common had higher-than-average shares of uninsured workers Agriculture forestry and fisheries had the largest percent of uninsured workers (413 percent) for example while construction retail trade and business and personal services also had large proportions of uninsured workers

Industry trends are consistent with other data on uninsured workers From 1980 through 1991 the proportion of workers without insurance increased in all industries except government and the

Health Care Financing Review Falll992volume 14 Number 1 54

Figure 4 Percentage of population with no heaHh Insurance coverage

by census division United States 1991

West North Central 101

bull 0 Less than 12 percent

~ 12-16 percent

bull More than 16 percent

SOURCE US Bureau of the Gensus Current Population Survey Mar 1991 tabulations prepared by Fu Associates ltd for the Health Care Financing Adminislration Office of the Actuary

including cover sheet children in 1991-were in families whose head is not in the work force This group probably contained more long-term uninsured individuals than other groups but the data may be misleading in some cases Family heads not in the work force can include retirees disabled persons and individuals just entering the labor force as well as the chronically unemployed

Employer-sponsored coverage of workers and their dependents has been declining over the last decade Uninsured members of families headed by full-year full-time workers increased by 181 percent (from 159 million to 187 million) while the overall number of uninsured increased by 119 percent (from 310 million to 347 million) from I 988 through 1991 The trend toward relatively more uninsured workers reflects factors such as high insurance premiums less access to insurance by small firms and increased employee cost sharing in firms offering group insurance to their employees

Uninsured worker-specific characteristics

The work force includes several subgroups of uninsured workers Some are not offered insurance or

do not have adequate wages to purchase it Others have adequate wages but cannot buy insurance because of their health status Still others voluntarily decline to purchase insurance even when it is affordable and available

Table 18 shows the number and percent of uninsured full-year full-time workers by hourly wage rate in 1989 dollars This group of workers had better access to health insurance than part-time workers and information on their insurance coverage was relatively consistent over time As a result the data may be particularly useful in evaluating insurance coverage of workers and their independents

Insurance coverage of workers is highly correlated with income and skewed toward high-wage earners In the 1991 CPS 112 percent of workers with full-time full-year employment were uninsured but lowmiddotwage workers had highermiddotthan-average rates of uninsurance Some 518 percent of uninsured workers earned less than $6 per hour and another 290 percent earned from $6 to $10 per hour The remaining 192 percent earned at least $10 per hour

The asymmetric distribution of health insurance coverage among workers can be seen by comparing coverage of workers in different wage categories

Helth Care Flnanclnf ReviewFall1992volume 14 Number 1 52

Table 17 Number and percent of uninsured persons by work status of famlty head1 United States selected

years 1980-91 Family heads working full-year and Family heads working part-year and

SUivey Total uninsured

number of hours per week number of hours per week Family head

not Inwork force

35 or more 1middot20 hours 21-34 hours hours

35 or more 1middot20 hours 21-34 hours hours

Number In thousands including cover sheet children2

1991 34719 650 1265 18732 845 1268 7622 4337 1990 33385 752 1295 t79n 835 1o75 7070 4381 1989 32680 707 1119 17786 1017 1161 6650 4239 1988 31026 616 1185 15860 876 1100 6865 4524

Number in thousands excluding cover sheet children2

1991 39629 721 1436 21616 9n 1410 8390 5080 1990 38047 798 1448 20612 981 1245 7800 5164 1989 36830 783 1273 20285 1114 1259 7293 4823 1988 34823 653 1304 17896 1001 1245 7454 5269 1987 37357 692 1451 19831 1233 1462 7231 5066 1985 37055 759 1346 19086 1112 1402 7460 5283 1980 30474 571 839 15661 970 980 6294 4940

Percent of total uninsured including cover sheet chlldren2

1991 1000 19 36 540 24 37 220 125 1990 1000 23 39 538 25 32 212 131 1989 1000 22 34 544 31 36 203 130 1988 1000 20 38 511 28 35 221 146

Percent of total uninsured excluding cover sheet children2

1991 1000 18 36 545 25 36 212 128 1990 1000 21 38 542 26 33 205 136 1989 1000 21 35 551 30 34 198 131 1988 1000 19 37 514 29 36 214 151 1987 1000 19 39 531 33 39 194 136 1985 1000 20 36 515 30 38 201 143 1980 1000 19 28 514 32 32 207 162

Percent uninsured including cover sheet children2

1991 NA 206 258 118 193 290 251 102 1990 NA 249 271 113 187 296 245 104 1989 NA 225 240 114 230 287 252 95 1988 NA 215 266 104 200 291 247 101

Percent uninsured excluding cover sheet children2

1991 NA 229 292 136 223 323 276 119 1990 NA 264 303 129 220 343 270 122 1989 NA 249 273 130 251 311 276 109 1988 NA 228 293 117 229 330 269 117 1987 NA 274 321 132 270 373 253 120 1985 NA 282 313 131 257 363 256 127 1980 NA 242 263 110 242 303 200 142 1Family head Is defined as the family member with the highest income 2tn the 1988-91 surveys additional questions concerning health insurance status of children were asked This set of questions Is referred to as cover sheet questions Responses to lhasa questions resulted in additional children being assigned health insurance coverage

NOTE NA indicates that comparable statistics ere not available SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Finaflcing Administration Office of the Actuary

Workers earning $6 to $999 per hour had an 113~percent chance of being uninsured but other workers had much different coverage rates At the extremes the probabilities of being without insurance ranged from a high of 396 percent for low~wage earners (earning $335 or less per hour) to a low of 29 percent for high~wage earners (earning $15 or more per hour)

The proportion of full~time full~year workers without insurance has been increasing over time From 1980 through 1991 the number of uninsured workers increased by 747 percent from 51 million to 89 million with most of the increase affecting low~ to

middle-wage earners During this period about 40 percent of workers earning $335 or less were uninsured However the number of uninsured workers earning $336 to $599 per hour increased by nearly 10 percentage points from 176 percent to 275 percent and the number of uninsured workers earning $600 to $999 increased by 21 percentage points from 92 percent to 113 percent

A number of explanations for the decline in coverage of workers have been offered (Kronick 1991) One hypothesis is that demand for insurance by poor workers declined as the price of medical care increased during the 1980s The theory is that demand for

Health Care Fibullanclnc ReviewFaD 1992Votume J4Number 1 53

Table 18 Number and percent of uninsured fullwyear full-time workers by hourly wage rate in 1989 dollars

United States 1980-91 Total Hourly wage rate in 1989 dollars Survey uninsured

year workers1 bull2 $335 or less $336-599 $60()999 $1000-1499 $1500 or more

Number in thousands2

1991 8857 1320 3271 2569 1121 576 1990 8362 1196 2867 2610 1066 623 1989 8349 1185 2785 2585 1134 660 1988 7255 1257 2493 2079 919 508 1987 6978 1137 2475 2003 776 587 1988 6683 1273 2220 1888 770 532 1985 6477 1117 2282 1767 809 502 1984 5419 991 1862 1452 689 428 1983 4716 943 1459 1430 539 344 1982 1981

4769 NA

947 NA

1535 NA

1417 NA

559 NA

311 NA

1980 5069 827 1262 1761 716 503

Percent of all workeW

1991 1000 149 369 290 127 65 1990 1000 143 343 312 127 74 1989 1000 142 334 310 136 79 1988 1000 173 344 287 127 70 1987 1000 163 355 287 111 84 1986 1000 191 332 283 115 80 1985 1000 172 352 273 125 78 1984 1000 183 344 268 127 79 1983 1000 200 309 303 114 73 1982 1000 199 322 297 117 65 1981 NA NA NA NA NA NA 1980 1000 163 249 347 141 99

Percent of workers~ In each category

1991 112 396 275 113 53 29 1990 107 388 270 114 52 30 1989 107 403 275 118 54 31 1988 96 430 252 98 47 25 1987 96 386 243 99 41 30 1988 94 446 231 90 41 30 1985 94 408 230 90 43 30 1984 83 405 194 77 38 28 1983 76 401 178 72 33 23 1982 75 406 178 71 34 20 1981 NA NA NA NA NA NA 1980 80 398 176 92 43 29 1Civilian non-institutionalited populalion In the United States and mlmaty personnel living outside military bases or on military bases with their families 2worked during year priOf to the survey

NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Popv81on SuiVey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care Financing Administration Office ofthe Actuary

insurance by low-wage earners has fallen because the poor face limited Imancial risk by going without it That is they have few assets to protect and they can receive free or low-cost care through community programs to help the medically indigent

An alternative explanation is that supply and demand in labor markets play a critical role in determining the availability of employer-sponsored insurance Lowshywage workers generally are thought to be more concerned about take-home pay than fringe benefits because of a strong need for income to purchase necessities while employers are more concerned about total compensation than the split between wages and fringe benefits Therefore health insurance may not be offered by employers or demanded by employees in low-wage job markets

Uninsured workers by industry

In 1991 169 percent of all full- and part-time workers were uninsured but coverage varied greatly across industries (Table 19) Industries in which lowshywage seasonal or part-time jobs were common had higher-than-average shares of uninsured workers Agriculture forestry and fisheries had the largest percent of uninsured workers (413 percent) for example while construction retail trade and business and personal services also had large proportions of uninsured workers

Industry trends are consistent with other data on uninsured workers From 1980 through 1991 the proportion of workers without insurance increased in all industries except government and the

Health Care Financing Review Falll992volume 14 Number 1 54

Table 17 Number and percent of uninsured persons by work status of famlty head1 United States selected

years 1980-91 Family heads working full-year and Family heads working part-year and

SUivey Total uninsured

number of hours per week number of hours per week Family head

not Inwork force

35 or more 1middot20 hours 21-34 hours hours

35 or more 1middot20 hours 21-34 hours hours

Number In thousands including cover sheet children2

1991 34719 650 1265 18732 845 1268 7622 4337 1990 33385 752 1295 t79n 835 1o75 7070 4381 1989 32680 707 1119 17786 1017 1161 6650 4239 1988 31026 616 1185 15860 876 1100 6865 4524

Number in thousands excluding cover sheet children2

1991 39629 721 1436 21616 9n 1410 8390 5080 1990 38047 798 1448 20612 981 1245 7800 5164 1989 36830 783 1273 20285 1114 1259 7293 4823 1988 34823 653 1304 17896 1001 1245 7454 5269 1987 37357 692 1451 19831 1233 1462 7231 5066 1985 37055 759 1346 19086 1112 1402 7460 5283 1980 30474 571 839 15661 970 980 6294 4940

Percent of total uninsured including cover sheet chlldren2

1991 1000 19 36 540 24 37 220 125 1990 1000 23 39 538 25 32 212 131 1989 1000 22 34 544 31 36 203 130 1988 1000 20 38 511 28 35 221 146

Percent of total uninsured excluding cover sheet children2

1991 1000 18 36 545 25 36 212 128 1990 1000 21 38 542 26 33 205 136 1989 1000 21 35 551 30 34 198 131 1988 1000 19 37 514 29 36 214 151 1987 1000 19 39 531 33 39 194 136 1985 1000 20 36 515 30 38 201 143 1980 1000 19 28 514 32 32 207 162

Percent uninsured including cover sheet children2

1991 NA 206 258 118 193 290 251 102 1990 NA 249 271 113 187 296 245 104 1989 NA 225 240 114 230 287 252 95 1988 NA 215 266 104 200 291 247 101

Percent uninsured excluding cover sheet children2

1991 NA 229 292 136 223 323 276 119 1990 NA 264 303 129 220 343 270 122 1989 NA 249 273 130 251 311 276 109 1988 NA 228 293 117 229 330 269 117 1987 NA 274 321 132 270 373 253 120 1985 NA 282 313 131 257 363 256 127 1980 NA 242 263 110 242 303 200 142 1Family head Is defined as the family member with the highest income 2tn the 1988-91 surveys additional questions concerning health insurance status of children were asked This set of questions Is referred to as cover sheet questions Responses to lhasa questions resulted in additional children being assigned health insurance coverage

NOTE NA indicates that comparable statistics ere not available SOURCE US Bureau of the Census Current Population Survey 1980-91 tabulations prepared by Fu Associates Ltd for the Health Care Finaflcing Administration Office of the Actuary

Workers earning $6 to $999 per hour had an 113~percent chance of being uninsured but other workers had much different coverage rates At the extremes the probabilities of being without insurance ranged from a high of 396 percent for low~wage earners (earning $335 or less per hour) to a low of 29 percent for high~wage earners (earning $15 or more per hour)

The proportion of full~time full~year workers without insurance has been increasing over time From 1980 through 1991 the number of uninsured workers increased by 747 percent from 51 million to 89 million with most of the increase affecting low~ to

middle-wage earners During this period about 40 percent of workers earning $335 or less were uninsured However the number of uninsured workers earning $336 to $599 per hour increased by nearly 10 percentage points from 176 percent to 275 percent and the number of uninsured workers earning $600 to $999 increased by 21 percentage points from 92 percent to 113 percent

A number of explanations for the decline in coverage of workers have been offered (Kronick 1991) One hypothesis is that demand for insurance by poor workers declined as the price of medical care increased during the 1980s The theory is that demand for

Health Care Fibullanclnc ReviewFaD 1992Votume J4Number 1 53

Table 18 Number and percent of uninsured fullwyear full-time workers by hourly wage rate in 1989 dollars

United States 1980-91 Total Hourly wage rate in 1989 dollars Survey uninsured

year workers1 bull2 $335 or less $336-599 $60()999 $1000-1499 $1500 or more

Number in thousands2

1991 8857 1320 3271 2569 1121 576 1990 8362 1196 2867 2610 1066 623 1989 8349 1185 2785 2585 1134 660 1988 7255 1257 2493 2079 919 508 1987 6978 1137 2475 2003 776 587 1988 6683 1273 2220 1888 770 532 1985 6477 1117 2282 1767 809 502 1984 5419 991 1862 1452 689 428 1983 4716 943 1459 1430 539 344 1982 1981

4769 NA

947 NA

1535 NA

1417 NA

559 NA

311 NA

1980 5069 827 1262 1761 716 503

Percent of all workeW

1991 1000 149 369 290 127 65 1990 1000 143 343 312 127 74 1989 1000 142 334 310 136 79 1988 1000 173 344 287 127 70 1987 1000 163 355 287 111 84 1986 1000 191 332 283 115 80 1985 1000 172 352 273 125 78 1984 1000 183 344 268 127 79 1983 1000 200 309 303 114 73 1982 1000 199 322 297 117 65 1981 NA NA NA NA NA NA 1980 1000 163 249 347 141 99

Percent of workers~ In each category

1991 112 396 275 113 53 29 1990 107 388 270 114 52 30 1989 107 403 275 118 54 31 1988 96 430 252 98 47 25 1987 96 386 243 99 41 30 1988 94 446 231 90 41 30 1985 94 408 230 90 43 30 1984 83 405 194 77 38 28 1983 76 401 178 72 33 23 1982 75 406 178 71 34 20 1981 NA NA NA NA NA NA 1980 80 398 176 92 43 29 1Civilian non-institutionalited populalion In the United States and mlmaty personnel living outside military bases or on military bases with their families 2worked during year priOf to the survey

NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Popv81on SuiVey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care Financing Administration Office ofthe Actuary

insurance by low-wage earners has fallen because the poor face limited Imancial risk by going without it That is they have few assets to protect and they can receive free or low-cost care through community programs to help the medically indigent

An alternative explanation is that supply and demand in labor markets play a critical role in determining the availability of employer-sponsored insurance Lowshywage workers generally are thought to be more concerned about take-home pay than fringe benefits because of a strong need for income to purchase necessities while employers are more concerned about total compensation than the split between wages and fringe benefits Therefore health insurance may not be offered by employers or demanded by employees in low-wage job markets

Uninsured workers by industry

In 1991 169 percent of all full- and part-time workers were uninsured but coverage varied greatly across industries (Table 19) Industries in which lowshywage seasonal or part-time jobs were common had higher-than-average shares of uninsured workers Agriculture forestry and fisheries had the largest percent of uninsured workers (413 percent) for example while construction retail trade and business and personal services also had large proportions of uninsured workers

Industry trends are consistent with other data on uninsured workers From 1980 through 1991 the proportion of workers without insurance increased in all industries except government and the

Health Care Financing Review Falll992volume 14 Number 1 54

Table 18 Number and percent of uninsured fullwyear full-time workers by hourly wage rate in 1989 dollars

United States 1980-91 Total Hourly wage rate in 1989 dollars Survey uninsured

year workers1 bull2 $335 or less $336-599 $60()999 $1000-1499 $1500 or more

Number in thousands2

1991 8857 1320 3271 2569 1121 576 1990 8362 1196 2867 2610 1066 623 1989 8349 1185 2785 2585 1134 660 1988 7255 1257 2493 2079 919 508 1987 6978 1137 2475 2003 776 587 1988 6683 1273 2220 1888 770 532 1985 6477 1117 2282 1767 809 502 1984 5419 991 1862 1452 689 428 1983 4716 943 1459 1430 539 344 1982 1981

4769 NA

947 NA

1535 NA

1417 NA

559 NA

311 NA

1980 5069 827 1262 1761 716 503

Percent of all workeW

1991 1000 149 369 290 127 65 1990 1000 143 343 312 127 74 1989 1000 142 334 310 136 79 1988 1000 173 344 287 127 70 1987 1000 163 355 287 111 84 1986 1000 191 332 283 115 80 1985 1000 172 352 273 125 78 1984 1000 183 344 268 127 79 1983 1000 200 309 303 114 73 1982 1000 199 322 297 117 65 1981 NA NA NA NA NA NA 1980 1000 163 249 347 141 99

Percent of workers~ In each category

1991 112 396 275 113 53 29 1990 107 388 270 114 52 30 1989 107 403 275 118 54 31 1988 96 430 252 98 47 25 1987 96 386 243 99 41 30 1988 94 446 231 90 41 30 1985 94 408 230 90 43 30 1984 83 405 194 77 38 28 1983 76 401 178 72 33 23 1982 75 406 178 71 34 20 1981 NA NA NA NA NA NA 1980 80 398 176 92 43 29 1Civilian non-institutionalited populalion In the United States and mlmaty personnel living outside military bases or on military bases with their families 2worked during year priOf to the survey

NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Current Popv81on SuiVey 1980-91 tabulations prepared by Fu Associates Ud for the Health Care Financing Administration Office ofthe Actuary

insurance by low-wage earners has fallen because the poor face limited Imancial risk by going without it That is they have few assets to protect and they can receive free or low-cost care through community programs to help the medically indigent

An alternative explanation is that supply and demand in labor markets play a critical role in determining the availability of employer-sponsored insurance Lowshywage workers generally are thought to be more concerned about take-home pay than fringe benefits because of a strong need for income to purchase necessities while employers are more concerned about total compensation than the split between wages and fringe benefits Therefore health insurance may not be offered by employers or demanded by employees in low-wage job markets

Uninsured workers by industry

In 1991 169 percent of all full- and part-time workers were uninsured but coverage varied greatly across industries (Table 19) Industries in which lowshywage seasonal or part-time jobs were common had higher-than-average shares of uninsured workers Agriculture forestry and fisheries had the largest percent of uninsured workers (413 percent) for example while construction retail trade and business and personal services also had large proportions of uninsured workers

Industry trends are consistent with other data on uninsured workers From 1980 through 1991 the proportion of workers without insurance increased in all industries except government and the

Health Care Financing Review Falll992volume 14 Number 1 54

Table 19

Number and percent of uninsured workers by industry of employment1 United States 1980middot91 [ amp

~ li bull bulla -bull i ~ ~

~ ~ l z

~

Total

Agriculture forestry

bullbullbull fisheries Mining

Construe-tion

Manufac-turing

Transportation communication

and public utilities

Who-le Retail 1-

Finance insurance

bullbullbullreal estate

Business aod

personal Professional services Government

SeH-employedunincorporated

Number in thousands

1991 19466 764 83 1910 2296 741 547 4436 609 2801 1662 1240 2375 1990 18287 754 71 1818 2204 648 547 3885 630 2n2 1472 1224 2260 1989 18016 802 78 1n2 2344 627 464 3875 558 2724 1480 1182 20801989 1967

16556 17422

799 773

61 1800 1616

2022 1948

673 643

446 3641 598 449 3886 586

2470 2521

1246 1455

1016 1226

1983 2284

1989 16966 705 85 1479 1800 559 442 3840 506 2555 1420 1213 2363 1985 1964

16716 15279

832 105 72

1552 1367

1780 1517

579 480

446 3663 530 434 3399 469

2316 2122

1343 1261

1262 1315

22772145

1983 13845 614 108 1086 1446 447 373 3179 437 1919 1227 1090 19391962 13098 593 90 1104 1473 416 393 2765 367 1616 1173 1120 1967 1961 NA NA NA NA NA NA NA NA NA NA NA NA NA1980 12339 534 58 1078 1551 366 335 2423 369 1397 1028 1168 2012

Percent of industry workers 1991 169 413 99 299 106 113 122 242 85 246 109 64 250 1990 160 405 100 260 101 101 126 219 84 246 100 63 247 1969 169 421 101 277 106 99 115 222 76 249 103 62 233 1966 150 432 81 264 94 108 103 209 82 238 90 54 220 1967 168 418 90 264 90 105 103 225 80 248 107 70 268 1966 166 396 79 249 83 91 104 229 77 258 109 70 288 1965 166 368 100 266 82 96 107 238 83 249 108 74 276 1964 162 367 74 246 72 81 105 216 77 244 107 76 261 1963 152 340 91 206 66 79 89 210 77 230 104 65 241 1962 141 367 78 210 65 74 91 186 67 213 104 66 246 1961 NA NA NA NA NA NA NA NA NA NA NA NA NA 1980 137 357 66 203 67 70 92 170 69 203 96 68 261 11ndustry In wfllch wofker held job 101 the longest period during the year prior 1o the survey

NOTE NA indieales that eomparable statlallce are no1 available

SOURCe US Bureau of lhe Census Current Population Suvrt 1980-91 labulallons prepared by Fu Assocletes Lid 101 the Heallh Cere Financing AdmlniWallon Office of the Actuary

~ ~

Table 20

Number and percent of uninsured workers by size of finn and wage rate United States 1991

Number of WOltkes

Total uninsured

Hourly wage rate

at firm workers $335 or less $336-599 $6()()999 $10()()1499 $1500 or more

Number in thousands

All firms 19284 3285 7302 5210 2086 1401 Fewer than 25 9408 1827 3315 2542 1043 711 25 to 99 3081 479 1268 861 321 152 100 to 499 2160 287 863 598 193 218 500 to 999 1000 or more

629 3976

95 233 181 1624 1027

86 463

54 286

Percent of all uninsured

All firms 1000 171 379 270 108 73 Fewer than 25 469 95 172 132 54 37 25 to 99 160 25 66 45 17 06 100 to 499 112 15 45 31 10 11 500 to 999 33 05 12 09 03 03 1 000 or more 206 31 84 53 24 14

Percent within each wage group

All firms 1000 1000 1000 1000 1000 NA Fewer than 25 469 556 454 488 500 NA 25 to 99 160 146 174 165 154 NA 100 to 499 112 87 118 115 93 NA 500 to 999 33 29 32 35 32 NA 1000 or more 206 182 222 197 222 NA

Percent of all workers in wage group All firms 156 334 289 153 78 55 Fewer than 25 77 166 131 75 39 28 25 to 99 25 49 50 25 12 06 100 to 499 18 29 34 18 07 o8 500 to 999 05 10 09 05 02 02 1000 or more 33 61 64 30 17 10 NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Cwrent Population Survey 1991 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

unincorporated self-employed During the same period employment grew substantially in service industries that historically have had relatively high percentages of uninsured workers (eg retail trade and business and personal services)

Changes in manufacturing also contributed to the loss of coverage Manufacturing employs more workers than most other industries and traditionally has offered health insurance as a fringe benefit However from 1980 through 1991 manufacturing jobs declined by 86 percent and the percent of the manufacturing work force without insurance increased by 582 percent (from 67 percent to 106 percent)

Size of firm and wages

Firm size is an important factor in determining whether or not workers have access to coverage Small firms generally pay higher premiums for the same benefit package than large firms have less access to insurance because of insurance industry underwriting and rating practices and employ low-wage and partshytime workers who have limited capability to pay for insurance (US Congress 1990) As a result a large proportion of uninsured workers are concentrated in small firms

In 1991 489 percent of all uninsured workers had jobs in firms that had fewer than 25 employees (Table 20) Some 398 percent of these workers earned less than $10 per hour Another 91 percent earned more than $10 per hour

Moreover the proportion of uninsured in small firms does not vary widely by wage rate Approximately 50 percent of all workers in ftrms of fewer than 25 employees were uninsured regardless of whether they were low- or high-wage earners Uninsurance rates ranged from a low of 454 percent for workers earning $336 to $599 per hour to a high of 556 percent of workers earning $335 or less

Conclusion

Despite the continuity problems encountered in using CPS data some significant trends are discernible from this data source from 1980through 1991 A smaller proportion of the population was covered by private health insurance and a larger proportion was covered by Medicaid particularly in 1991 and was uninsured An increasing percentage of the uninsured lived in families headed by workers More and more holding a full-time full-year job did not guarantee access to affordable private health insurance through an

Health Care Financing ReviewFall 1t91Voturne 14 Number 1 56

employer This characteristic was particularly strong for small ftrms and for workers in low-paying and part-time jobs Public programs provided a safety net for many but not all Americans Almost all elderly persons received health insurance coverage through Medicare and Medicaid reached segments of the poorest Americans particularly children and mothers

Trends indicate that the current insurance structure probably continued to change in the March 1992 CPS as the Nation remained in the economic recession in early 1992 People will have reduced access to employershysponsored insurance through jobs and rising costs will make premiums increasingly unaffordable for both employers and employees Trend information from the CPS can focus our attention on changes in the extent of health insurance coverage from various sources and can highlight employment characteristics that influence the source of coverage for Americans

Acknowledgments

This article was prepared in the Office of National Health Statistics within the Health Care Financing Administrations Office of the Actuary under the general supervision of Mark Freeland Data for this article were prepared under HCFA Basic Ordering Agreement Number 500-90-0010 The authors are grateful for the advice and comments of their colleagues Mark Freeland Helen Lazenby Cathy Cowan Charlie Fisher Ross Arnett Dan Waldo and Sally Burner

References

Aaron H Serious and Unstable Condition Financing Americas Health Care Washington DC The Brookings Institution 1991

Davis K and Rowland D Uninsured and underserved Inequities in health care in the United States Milbank Memorial Fund Quarterly Health and Society 61(2) 149-175 1983

Donham CS Maple BM and Levit KR Health Care Indicators Health Care Financing Re11iew 13(4) 173-199 HCFA Pub No 03331 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Summer 1992

Feldstein P Health Care Economics Third Edition Albany NY Delmar Publishers Inc 1988

Gabel J On their own A prorile of the individually insured Journal ofAmerican Health Policy 1(3)13-18 Nov IDee 1991

Kronick R Health insurance 1979-89 The frayed connection between employment and insurance Inquiry 28(4)318-332 Winter 1991

Lair T and Leftkowitz D Mental health and functional status of residents of nursing and personal care homes National Medical Expenditure Survey Research Finding Number 7 DHHS Pub No (PHS) 90-3470 Agency for Health Care Policy and Research Rockville MD Public Health Service Sept 1990

Levit KR and Cowan CA Business households and governments Health care costs 1990 Health Care Financing Review 13(2)83-93 HCFA Pub No 03326 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Winter 1991

Levit KR Lazenby HC Cowan CA and Letsch S W National health expenditures 1990 Health Care Financing Re11iew 13(1)29-54 HCFA Pub No 03321 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Falll991

The Pepper Commission US Bipartisan Commission on Comprehensive Health Care A Call for Action Washington US Government Printing Office 1990

Plunkert LM The 1980s A decade of job growth and industry shifts Monthly Labor Review 113(9)3-16 Bureau of Labor Statistics Washington US Government Printing Office Sept 1990

Swartz K Interpreting the estimates from four national surveys of the number of people without health insurance Journal ofEconomic and Social Measurement 14233-242 1986

US Bureau of the Census The current population survey Design and methodology Technical Paper 40 US Bureau of the Census Washington July 1985

US Bureau ofthe Census Current Population Survey 1991-Technical Documentation CPS91-3 US Bureau of the Census Washington DC Sept 1991

US Congress House Subcommittee on Health Private health insurance Options for reform Washington US Government Printing Office Sept 20 1990

Health Care FinaDcibullamp ReviewFall 1992votume 14 Numba 1 57

Table 20

Number and percent of uninsured workers by size of finn and wage rate United States 1991

Number of WOltkes

Total uninsured

Hourly wage rate

at firm workers $335 or less $336-599 $6()()999 $10()()1499 $1500 or more

Number in thousands

All firms 19284 3285 7302 5210 2086 1401 Fewer than 25 9408 1827 3315 2542 1043 711 25 to 99 3081 479 1268 861 321 152 100 to 499 2160 287 863 598 193 218 500 to 999 1000 or more

629 3976

95 233 181 1624 1027

86 463

54 286

Percent of all uninsured

All firms 1000 171 379 270 108 73 Fewer than 25 469 95 172 132 54 37 25 to 99 160 25 66 45 17 06 100 to 499 112 15 45 31 10 11 500 to 999 33 05 12 09 03 03 1 000 or more 206 31 84 53 24 14

Percent within each wage group

All firms 1000 1000 1000 1000 1000 NA Fewer than 25 469 556 454 488 500 NA 25 to 99 160 146 174 165 154 NA 100 to 499 112 87 118 115 93 NA 500 to 999 33 29 32 35 32 NA 1000 or more 206 182 222 197 222 NA

Percent of all workers in wage group All firms 156 334 289 153 78 55 Fewer than 25 77 166 131 75 39 28 25 to 99 25 49 50 25 12 06 100 to 499 18 29 34 18 07 o8 500 to 999 05 10 09 05 02 02 1000 or more 33 61 64 30 17 10 NOTE NA indicates that comparable statistics are not available

SOURCE US Bureau of the Census Cwrent Population Survey 1991 tabulations prepared by Fu Associates Ltd for the Health Care Financing Administration Office of the Actuary

unincorporated self-employed During the same period employment grew substantially in service industries that historically have had relatively high percentages of uninsured workers (eg retail trade and business and personal services)

Changes in manufacturing also contributed to the loss of coverage Manufacturing employs more workers than most other industries and traditionally has offered health insurance as a fringe benefit However from 1980 through 1991 manufacturing jobs declined by 86 percent and the percent of the manufacturing work force without insurance increased by 582 percent (from 67 percent to 106 percent)

Size of firm and wages

Firm size is an important factor in determining whether or not workers have access to coverage Small firms generally pay higher premiums for the same benefit package than large firms have less access to insurance because of insurance industry underwriting and rating practices and employ low-wage and partshytime workers who have limited capability to pay for insurance (US Congress 1990) As a result a large proportion of uninsured workers are concentrated in small firms

In 1991 489 percent of all uninsured workers had jobs in firms that had fewer than 25 employees (Table 20) Some 398 percent of these workers earned less than $10 per hour Another 91 percent earned more than $10 per hour

Moreover the proportion of uninsured in small firms does not vary widely by wage rate Approximately 50 percent of all workers in ftrms of fewer than 25 employees were uninsured regardless of whether they were low- or high-wage earners Uninsurance rates ranged from a low of 454 percent for workers earning $336 to $599 per hour to a high of 556 percent of workers earning $335 or less

Conclusion

Despite the continuity problems encountered in using CPS data some significant trends are discernible from this data source from 1980through 1991 A smaller proportion of the population was covered by private health insurance and a larger proportion was covered by Medicaid particularly in 1991 and was uninsured An increasing percentage of the uninsured lived in families headed by workers More and more holding a full-time full-year job did not guarantee access to affordable private health insurance through an

Health Care Financing ReviewFall 1t91Voturne 14 Number 1 56

employer This characteristic was particularly strong for small ftrms and for workers in low-paying and part-time jobs Public programs provided a safety net for many but not all Americans Almost all elderly persons received health insurance coverage through Medicare and Medicaid reached segments of the poorest Americans particularly children and mothers

Trends indicate that the current insurance structure probably continued to change in the March 1992 CPS as the Nation remained in the economic recession in early 1992 People will have reduced access to employershysponsored insurance through jobs and rising costs will make premiums increasingly unaffordable for both employers and employees Trend information from the CPS can focus our attention on changes in the extent of health insurance coverage from various sources and can highlight employment characteristics that influence the source of coverage for Americans

Acknowledgments

This article was prepared in the Office of National Health Statistics within the Health Care Financing Administrations Office of the Actuary under the general supervision of Mark Freeland Data for this article were prepared under HCFA Basic Ordering Agreement Number 500-90-0010 The authors are grateful for the advice and comments of their colleagues Mark Freeland Helen Lazenby Cathy Cowan Charlie Fisher Ross Arnett Dan Waldo and Sally Burner

References

Aaron H Serious and Unstable Condition Financing Americas Health Care Washington DC The Brookings Institution 1991

Davis K and Rowland D Uninsured and underserved Inequities in health care in the United States Milbank Memorial Fund Quarterly Health and Society 61(2) 149-175 1983

Donham CS Maple BM and Levit KR Health Care Indicators Health Care Financing Re11iew 13(4) 173-199 HCFA Pub No 03331 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Summer 1992

Feldstein P Health Care Economics Third Edition Albany NY Delmar Publishers Inc 1988

Gabel J On their own A prorile of the individually insured Journal ofAmerican Health Policy 1(3)13-18 Nov IDee 1991

Kronick R Health insurance 1979-89 The frayed connection between employment and insurance Inquiry 28(4)318-332 Winter 1991

Lair T and Leftkowitz D Mental health and functional status of residents of nursing and personal care homes National Medical Expenditure Survey Research Finding Number 7 DHHS Pub No (PHS) 90-3470 Agency for Health Care Policy and Research Rockville MD Public Health Service Sept 1990

Levit KR and Cowan CA Business households and governments Health care costs 1990 Health Care Financing Review 13(2)83-93 HCFA Pub No 03326 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Winter 1991

Levit KR Lazenby HC Cowan CA and Letsch S W National health expenditures 1990 Health Care Financing Re11iew 13(1)29-54 HCFA Pub No 03321 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Falll991

The Pepper Commission US Bipartisan Commission on Comprehensive Health Care A Call for Action Washington US Government Printing Office 1990

Plunkert LM The 1980s A decade of job growth and industry shifts Monthly Labor Review 113(9)3-16 Bureau of Labor Statistics Washington US Government Printing Office Sept 1990

Swartz K Interpreting the estimates from four national surveys of the number of people without health insurance Journal ofEconomic and Social Measurement 14233-242 1986

US Bureau of the Census The current population survey Design and methodology Technical Paper 40 US Bureau of the Census Washington July 1985

US Bureau ofthe Census Current Population Survey 1991-Technical Documentation CPS91-3 US Bureau of the Census Washington DC Sept 1991

US Congress House Subcommittee on Health Private health insurance Options for reform Washington US Government Printing Office Sept 20 1990

Health Care FinaDcibullamp ReviewFall 1992votume 14 Numba 1 57

employer This characteristic was particularly strong for small ftrms and for workers in low-paying and part-time jobs Public programs provided a safety net for many but not all Americans Almost all elderly persons received health insurance coverage through Medicare and Medicaid reached segments of the poorest Americans particularly children and mothers

Trends indicate that the current insurance structure probably continued to change in the March 1992 CPS as the Nation remained in the economic recession in early 1992 People will have reduced access to employershysponsored insurance through jobs and rising costs will make premiums increasingly unaffordable for both employers and employees Trend information from the CPS can focus our attention on changes in the extent of health insurance coverage from various sources and can highlight employment characteristics that influence the source of coverage for Americans

Acknowledgments

This article was prepared in the Office of National Health Statistics within the Health Care Financing Administrations Office of the Actuary under the general supervision of Mark Freeland Data for this article were prepared under HCFA Basic Ordering Agreement Number 500-90-0010 The authors are grateful for the advice and comments of their colleagues Mark Freeland Helen Lazenby Cathy Cowan Charlie Fisher Ross Arnett Dan Waldo and Sally Burner

References

Aaron H Serious and Unstable Condition Financing Americas Health Care Washington DC The Brookings Institution 1991

Davis K and Rowland D Uninsured and underserved Inequities in health care in the United States Milbank Memorial Fund Quarterly Health and Society 61(2) 149-175 1983

Donham CS Maple BM and Levit KR Health Care Indicators Health Care Financing Re11iew 13(4) 173-199 HCFA Pub No 03331 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Summer 1992

Feldstein P Health Care Economics Third Edition Albany NY Delmar Publishers Inc 1988

Gabel J On their own A prorile of the individually insured Journal ofAmerican Health Policy 1(3)13-18 Nov IDee 1991

Kronick R Health insurance 1979-89 The frayed connection between employment and insurance Inquiry 28(4)318-332 Winter 1991

Lair T and Leftkowitz D Mental health and functional status of residents of nursing and personal care homes National Medical Expenditure Survey Research Finding Number 7 DHHS Pub No (PHS) 90-3470 Agency for Health Care Policy and Research Rockville MD Public Health Service Sept 1990

Levit KR and Cowan CA Business households and governments Health care costs 1990 Health Care Financing Review 13(2)83-93 HCFA Pub No 03326 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Winter 1991

Levit KR Lazenby HC Cowan CA and Letsch S W National health expenditures 1990 Health Care Financing Re11iew 13(1)29-54 HCFA Pub No 03321 Office of Research and Demonstrations Health Care Financing Administration Washington US Government Printing Office Falll991

The Pepper Commission US Bipartisan Commission on Comprehensive Health Care A Call for Action Washington US Government Printing Office 1990

Plunkert LM The 1980s A decade of job growth and industry shifts Monthly Labor Review 113(9)3-16 Bureau of Labor Statistics Washington US Government Printing Office Sept 1990

Swartz K Interpreting the estimates from four national surveys of the number of people without health insurance Journal ofEconomic and Social Measurement 14233-242 1986

US Bureau of the Census The current population survey Design and methodology Technical Paper 40 US Bureau of the Census Washington July 1985

US Bureau ofthe Census Current Population Survey 1991-Technical Documentation CPS91-3 US Bureau of the Census Washington DC Sept 1991

US Congress House Subcommittee on Health Private health insurance Options for reform Washington US Government Printing Office Sept 20 1990

Health Care FinaDcibullamp ReviewFall 1992votume 14 Numba 1 57