Coverage Matters for Families

Understanding how and why lack of insurance matters for families provides further insight into the menacing effects of uninsurance; it clarifies some of the less obvious reasons why coverage matters.

The insurance status of individual family members affects access to and use of care by others. Lower income families often encounter a bewildering patchwork of coverage options, which makes negotiating the health care system difficult. Parents often make health care decisions for younger family members and their experience with the health care system will influence children's access to and use of care.¹

Who Is Covered?

• About 1 in 5 families with children (19 percent) had at least one uninsured member in 2000.²
• Families with one or more uninsured members lacked the income to pay for it. Only 59 percent of families with incomes under half the poverty level were fully covered whereas 95 percent of families that earned over 200 percent of the poverty level were.³
• Parents in lower-income families were one-and-one-half times less likely to be insured than their children because eligibility limits for public coverage were higher for children than adults.⁴
• In two-parent households with both parents insured, 98 percent of children had coverage. In single-parent households, when the parent was insured, 95 percent of children were covered.⁵ However, the chance that a single-parent family had no insured members was double that of two-parent families.⁶

Parental Influence

Parents are the primary seeker of health care for their children. For the most part, children access the health care system through their parents. But parents with limited access to the health care system, with little knowledge about it, and with low trust in it may hinder rather than facilitate their children's access to and use of health care services.

• Children, insured or not, were more likely to use health care if their parents did.⁷ Coverage is clearly important, but parents are critical facilitators or barriers to children's use and benefit from the health care system.
• Uninsured children were twice as likely to see a doctor if their primary parent had visited a doctor for their own care. More parental visits predict more child visits. This relationship also exists for use of emergency department, hospital and mental health services.⁸
• Insured children were three times more likely to see a doctor if their primary parent had visited a doctor for their own care. Together, coverage AND parental utilization increase the likelihood that children will use the health care system.⁹
• Children who were eligible for public coverage were more likely to be enrolled if their parents were insured.¹⁰ In states that have raised Medicaid eligibility limits for parents between 1997 and 1999, between 13 and 20 percent of previously uninsured but eligible children were enrolled. (This coverage expansion was found after statistically controlling for other potential sources of influence.)¹¹
• Uninsured adults are more likely than insured adults to rate their experience under a physician's care negatively, to be dissatisfied with waiting times, and to have negative billing experiences.¹² As role models, parents with negative experiences using the health care system tend to pass this orientation on to their children.

Insurance and the life cycle

Insurance status changes as family members age, when employment conditions change, and when the composition of families changes.

• Insurance status—that is, whether a person is insured or uninsured—can be transitory. Many individuals and families experience gaps in coverage, which can hinder access to care, which can lead to negative health outcomes.¹³ Evidence shows that in a given year, almost as many people are insured part of the year as are uninsured all year.¹⁴
• Slightly more than 85 percent (85.2 percent) of people with private coverage are insured throughout the year, but only about 3 out of 4 (77.4 percent) of people with public insurance have full-year coverage.¹⁵
• In 2001, individuals who were widowed or divorced were about twice as likely to be uninsured for part of the year compared to married people (18.2 percent vs. 9.8 percent). The poor (those with a family income below 100 percent of the federal poverty level (FPL)) were more than twice as likely to be uninsured for part of the year compared to those above 200 percent of FPL (20.3 percent vs. 9.9 percent).¹⁶
• In the population as a whole, insurance status is associated with age.¹⁷
  - Children, on average, have lower uninsurance rates than the non-elderly population as a whole (11.7 vs. 17.9 percent).
  - Young adults, ages 18-20 have twice the uninsurance rate of 13-17 year olds (24.6 percent vs. 11.7 percent).
  - People ages 21-24—often no longer covered under parents' policies and new to the workforce—have the highest uninsurance rate of any age group (33 percent) and the lowest rate of employment-based coverage, either in their own name or as a dependent (45.8 percent versus 71 percent for 45-54 year olds).
• There are a number of ways a family member can lose coverage that are related to the income or insurance status of another family member:¹⁸
  - A child can age into a more stringent income eligibility requirement and thus lose public coverage;
  - A child can age out of the eligibility range of a parent's policy;
  - Family income can increase, thereby surpassing the eligibility limit for public coverage. Employment-based coverage may be unavailable and non-group coverage may be unaffordable;
  - Job loss, separation, divorce or death can lead to loss of coverage for one or more family members.

Financial Consequences of Uninsurance

Large health care costs for uninsured low-income families can be financially disastrous.

• Uninsured families would have a hard time paying for insurance premiums without a substantial subsidy. In 2001, a four-person family that was offered un-subsidized insurance would have paid the following share of their annual income just for average premium costs (not including deductibles and other forms of cost-sharing):
  - 19 percent for a family at 300 percent of poverty.
  - 26 percent for a family at 200 percent of poverty.
  - 52 percent for a family at 100 percent of poverty.¹⁹
• Almost 20 percent of uninsured non-elderly adults paid medical bills by using all or most of their savings, according to a recent national survey.²⁰
• A study of bankruptcy petitioners in 2001 indicated that medical problems – an illness or injury suffered by the debtor or a family member, or substantial medical bills -- were a factor in about 50 percent of all – non-business filings that year. In 38.4 percent of these cases no family members had a lapse in health insurance.²¹
• Aside from out-of-pocket spending, the cost of caring for the uninsured is borne in large part by safety net providers, subsidized care, uncompensated care, and free or discounted care offered by providers.²²