The majority of uninsured American families who are not covered by group health insurance through an employer cannot afford to buy health insurance, according to a new study by Agency for Healthcare Research and Quality (AHRQ) researchers, Didem M. Bernard, Ph.D., Jessica S. Banthin, Ph.D., and William E. Encinosa, Ph.D. Some experts have suggested that because 23.8 million uninsured Americans under age 65 who do not have access to employer-based health insurance have incomes above the Federal poverty line (FPL), they can afford to purchase policies if they so choose; however, the new study shows otherwise.
It found that measuring a family's net worth (value of their savings plus other assets minus debt) rather than just income more precisely estimates the percentage of American families who could purchase health insurance policies if they chose to do so. Until now, most studies of uninsured families have considered income the main (or sole) determinant of why a family chooses not to purchase health insurance.
Using 2002 and 2003 national data from AHRQ's Medical Expenditure Panel Survey, the researchers found that the median net worth of families who purchased health insurance was $105,819—nearly 35 times greater than the median net worth of only $3,057 for families who were uninsured. In contrast, the median income of families who purchased health insurance was $41,086—only 2.3 times greater than the median income of $17,690 for families who were uninsured. The study also found that 4.1 percent of families with access to employer-based health insurance were poor (family income below 100 percent of the FPL; the 2009 FPL was $20,050 for a family of four) and 11.1 percent were low income (family income 100-199 percent of the FPL). In contrast, among families without access to employer-based health insurance, 33.8 percent were poor and 28.4 percent were low income.
According to Dr. Bernard, an economist who led the research, the standard model based on income alone used by economists works well for estimating who will enroll in employer-based health insurance. However, it does not work well for estimating who will purchase non-group coverage, because it overestimates health insurance enrollment for people with low net worth and underestimates it for people with high net worth.
More details are in "Wealth, income, and affordability of health insurance," by Drs. Bernard, Banthin, and Encinosa, in the May/June 2009 Health Affairs 28(3), pp. 887-896. Reprints (AHRQ Publication No. 09-R059) are available from the AHRQ Publications Clearinghouse.
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