The Uninsured

Why was healthcare reform enacted on March 23, 2010 in the first place? It was previously introduced in the early 1990s and before that in the mid-1960s. The 1960s effort turned into Medicare and Medicaid, and the 1990s effort went away after tremendous pushback by almost everyone except politicians. There were efforts even earlier than the 1960s, but we will stop here to discuss why healthcare reform keeps coming up. In each of the three aforementioned eras, the driving force for change was the uninsured population. Only after individuals started to mold legislation did the movement grow all of the other branches we know today as the Affordable Care Act (ACA). It was originally passed as the Patient Protection and Affordable Care Act (PPACA). You may have also heard this legislation referred to as Obamacare.

Who are the uninsured and why is that important? Simply defined, the uninsured is anyone that does not have the means or a third party to be responsible for some portion of any cost incurred by an individual for treatment or management of an illness or injury. In the 1990s, the uninsured in the USA was reported to be somewhere between 45,000,000 and 65,000,000 or about 18% of the US population at the time. The percent quoted depended on who you ask. In the early 2000s, the number of uninsured individuals, according to a Key Facts Report published October 5, 2015 by the Henry J. Kaiser Foundation, had fallen to 16.8% in 2000 and rose back to 18.2% in 2010. 2010 was the year federal health reform was signed into law. By 2013, the percentage had fallen back to 16.7%.

There are a lot of factors that contribute to our uninsured population, some within the control of an individual and some that make the individual powerless to overcome this obstacle. A few of the things that are out of the individual’s control: increasing numbers of employers dropping healthcare because it is too expensive to their bottom line, recessions, pre-existing conditions (the refusal of an insurance company to cover someone with a serious health condition, which was abolished with the passage of the Affordable Care Act) and undocumented immigrants. Items within an uninsured person’s control include refusal to spend money on health insurance, which is sometimes due to a person being young and feeling invincible or when an individual’s religion does not permit use of medical care. There are those that will claim that the uninsured population is currently between 10 to 11%. If these percentages are correct, this number is likely to be close to as low as it will ever be. Most economists would agree that it is simply impossible to provide health insurance to everyone.

What does being uninsured have to do with healthcare cost and availability? In both the 1990s and prior to 2010, proponents of healthcare reform claimed the rise in healthcare costs were directly attributed to the uninsured. Specifically hospitals, doctors and other healthcare providers had to provide enormous amounts of unreimbursed medical care to this uninsured group while passing along those costs to the rest of those with insurance. This was the message: if you get more people insured, especially young adults who normally have fewer claims, the increase in premiums will offset the losses and uncompensated care. Eliminating the uninsured was touted to work in two directions: more people would have care and more people would pay dollars into the system. Of course, the entire proposition became loaded with a lot of other baggage.

There are two other factors rarely part of national reporting. First, many young people did the math and figured the tax for not having insurance was significantly less than the premium they felt they were being forced to pay. Based on this and the conclusion they would likely not need any care, they did not participate preventing valuable premium dollars from entering the federal and state programs. Second, the amount of uncompensated care reported by hospitals often failed to discount the amount after Disproportionate Share Hospital (DSH) Payments state Medicaid programs had to give them. You can read about this at the following CMS.Gov site: According to the following March 2014 MedPac report, $12 billion was budgeted for these reimbursements for 2014 (

What has been the result? The uninsured population has been artificially reduced by tax supported subsidies that lower what some pay for insurance without truly lowering the cost of healthcare. In addition, healthcare costs continue to rise, and as individuals are required to pay more of their cost through higher deductibles and coinsurance after securing subsidized coverage, some return to uninsured status. As it turns out, there are many contributing factors to the rise in healthcare cost, not just uncompensated care. Perhaps if the over two hundred million insured people took better care of themselves and participated in early intervention to discover chronic conditions and managed these conditions, there would be enough healthcare for everyone. Perhaps the answer is in behavior, not finding more money to pay for coverage after we get sick.