Health Insurance Coverage and Access in Rural America

Timothy D. McBride, PhD

September 20, 2004

The Uninsured in the United States

Type of Health Insurance Coverage for the U.S. Non-Elderly Population, 2003

Uninsured16%

Private68%

Public only16%

45.0 million people without health insurance

Source: U.S. Census Bureau (2004).

Rise in the Uninsured3

1.0 3

2.7 33

.4 34

.7 35

.4

38

.6 39

.7

39

.7 40

.6 41

.7 43

.4 44

.3

39

.3

39

.8 41

.2

43

.6 45

.0

13%

13%14%

14%14%

15%15% 15%

15%16%

16%16%

14% 14%15%

15%16%

25

30

35

40

45

50

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

Year

Millio

ns

of

pe

rso

ns

12%

13%

14%

15%

16%

17%

18%

19%

20%

Pe

rce

nta

ge

of

po

pu

lati

on

Uninsured population

Percent of Population

Millions of Persons and Percentage of Population, 1987-2002

Source: U.S. Bureau of the Census (2004), based on Current Population Survey (CPS).Note: CPS questions redesigned in 1999, 1997, and in the 1992-94 period.

Number uninsured, and uninsurance rate, constantly rising

Health Insurance Coverage in Rural America

Results by:

Erika Ziller, Andy Coburn, Cathy Hoffman, Sharon Loux, Timothy McBride

Kaiser Family Foundation (2003)

Data Source:

Medical Expenditure Panel Survey (MEPS), 1996-1998

Urban-Rural County ComparisonNonelderly, 1998

Urban Counties 192 million

Rural - Adjacent to Urban Counties 22 million

Rural – Not Adjacent toUrban Counties (Remote) 22 million

Trends in Insurance Coverage

Sources of Health Insurance Coverage(Age 0 – 64, December 1998)

16% 10% 11%

61% 71% 72%

19%24% 18%

0%

20%

40%

60%

80%

100%

Rural Not Adjacent Rural Adjacent Urban

Medicaid/Other Public Private Uninsured

Rural Non Adjacent (RNA) residents are far less likely to have private coverage, and more likely to have Medicaid or other public coverage. Nearly one-fourth are uninsured.

Trend: Percent of Nonelderly Uninsured, December 1996-1998

23.7%

18.5%

23.5%

23.9%25.5%

21.7%

18.7%19.3%17.9%

10%

15%

20%

25%

30%

1996 1997 1998

Rural Not Adjacent Rural Adjacent Urban

The uninsured rate for those living in RNA remained unchanged from 1996 to 1998 in contrast to declines for urban and RA residents.

C h i l d r e n ’ s H e a l t h I n s u r a n c e C o v e r a g e b y C o u n t y T y p e , D e c e m b e r 1 9 9 8

2 7 %1 7 % 1 9 %

5 2 % 6 7 % 6 7 %

2 1 % 1 6 % 1 4 %

R u r a l , N o t A d j a c e n t R u r a l , A d j a c e n t U r b a n

U n i n s u r e d

P r i v a t e

M e d i c a i d / O t h e r

S O U R C E : K C M U / M u s k ie S c h o o l , H e a l t h I n s u r a n c e C o v e r a g e in R u r a l A m e r ic a , 2 0 0 3

F i g u r e 2

P e r c e n t o f N o n e ld e r l y P o p u la t io n U n in s u r e d fo r F u l l Y e a r b y C o u n t y T y p e , 1 9 9 8

1 4 %1 5 %

2 0 %

0 %

1 0 %

2 0 %

3 0 %

R u ra l , N o t A d ja c e n t R u ra l , A d ja c e n t U rb a n

S O U R C E : K C M U / M u s k ie S c h o o l , H e a lt h In s u ra n c e C o v e ra g e in R u ra l A m e r ic a , 2 0 0 3

F ig u r e 3

Trend: Percent of Nonelderly Uninsured All Year, December 1996-1998

20.4%

14.7%

19.8%

18.5%15.8%

18.6%

13.6%13.6% 14.3%

10%

15%

20%

25%

30%

1996 1997 1998

Rural Not Adjacent Rural Adjacent Urban

RNA residents were one-third more likely to be uninsured all of 1998. From 1996-98, RA and Urban rates decreased or stayed the same while the rate for RNA residents increased.

Characteristics of the Rural Uninsured

F a m i ly In c o m e o f t h e N o n e ld e r ly U n in s u r e d b y C o u n t y T y p e , 1 9 9 8

* In 1 9 9 8 , th e fe d e r a l p o v e r ty le v e l ( F P L ) fo r a fa m ily o f th r e e w a s $ 1 3 ,6 5 0S O U R C E : K C M U /M u s k ie S c h o o l, H e a l th In s u ra n c e C o v e ra g e in R u ra l A m e r ic a , 2 0 0 3

1 2 % 1 2 %

1 5 %

5 3 %6 9 % 7 3 %

2 2 %2 0 %

2 5 %

0 %

2 0 %

4 0 %

6 0 %

8 0 %

1 0 0 %

R u r a l , N o n - a d ja c e n t R u r a l , A d ja c e n t U r b a n

200% or more of FPL* 100-199% FPL* <100% FPL*

Figure 14

P e r c e n t U n in s u r e d b y F a m ily In c o m e a n d C o u n t y T y p e , N o n e ld e r ly , 1 9 9 8

1 6 %

3 2 %3 2 %3 5 %

2 9 %

1 3 % 1 2 %

3 2 % 3 2 %

< 1 0 0 % o f F P L * 1 0 0 - 1 9 9 % o f F P L * 2 0 0 % o f F P L * o r m o re

R u ra l , N o t A d ja c e n t R u ra l , A d ja c e n t U rb a n

* In 1 9 9 8 , th e fe d e ra l p o v e r ty le v e l (F P L ) fo r a fa m ily o f th re e w a s $ 1 3 ,6 5 0S O U R C E : K C M U /M u s k ie S c h o o l, H e a lth In s u ra n c e C o v e ra g e in R u ra l A m e r ic a , 2 0 0 3

Figure 15

Employment Characteristics & the Uninsured

Key Employment Factors Driving Health Insurance Gaps in Rural Counties

• Size of Rural Businesses

• Wage-Scale of Rural Workers

A Profile of the Rural and Urban Uninsured

• Among the uninsured in rural non-adjacent counties:– 68% come from families where there is at least one

full-time worker;– almost two-thirds come from low-income families (less

than 200% of the federal poverty level) compared to half of the urban uninsured (almost half of the population in rural, non-adjacent counties are low-income families);

– 30% are children;

A Profile of the Rural and Urban Uninsured

– The rural uninsured are more likely to be white, non-Hispanics, in part reflecting the higher concentration of whites in rural America (83% vs. 67% in urban counties);

– Self-reported health status is generally poorer than for the urban uninsured; and,

– Families with two full-time workers and married couples are at higher risk of being uninsured if they live in a rural, non-adjacent area—where job-based health benefits are less available and incomes are lower.

Percent of Adults Uninsured, by Employment Status and Residence, 1998

21%

27%

18%

27%

0%

5%

10%

15%

20%

25%

30%

Employed Unemployed

Rural Urban

There is no rural-urban difference in the uninsured rate for adults who are unemployed or OLF. The rate is higher for rural than urban workers.

Employer-Sponsored Health Insurance among Workers: Offer, Enrollment, and Coverage, 1998

59%66%

86%

56%49%

83%

58%

84%

69%

0%10%20%30%40%50%60%70%80%90%

100%

ESI Offered Enrolled, If Offered Covered by ESI

Rural Not Adjacent Rural Adjacent Urban

The lower rate of ESI among RNA workers stems from lower employer offers; take up rates are the same for all three residence types.

Percent Uninsured among Self-Employed Workers by Residence, 1998

33%

24%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Rural Urban

Self-employed rural workers living in rural counties are far more likely to be uninsured than those living in urban counties.

Key Characteristics of Uninsured Workers

• Regardless of where a worker lives, working for a business with fewer than 20 employees more than doubles the risk of being uninsured

• This is pronounced for RNA, where ⅓ of small business workers are uninsured compared to ¼ of urban workers with small employers.

• Low-wage workers (< $7 per hour) are about 3 times more likely to be uninsured no matter where they live.

Firm Size among Uninsured Workers and Total Working Population by Residence, 1998

68%58%

40%56%

37%

32%

54%43%

61%44%

63%

46%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Uninsured Total Uninsured Total Uninsured Total

<20 Employees 20 Employees or More

RNA workers are the most likely to work for small business. More than 2/3 of uninsured RNA workers work for firms with < 20 employees.

Rural Not Adjacent

Rural Adjacent Urban

Wages of Uninsured Workers and Total Working Population by Residence, 1998

60%53%

26%40%

19%

40%

67%

47%

74%60%

81%

33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Uninsured Total Uninsured Total Uninsured Total

< $7 per hour $7 per hour or more

One-third of RNA workers earn less than $7 per hour. 60% of uninsured workers in RNA areas earn low wages compared to 40% in urban areas.

Rural Not Adjacent

Rural Adjacent Urban

“Underinsurance”

Dental and Prescription Drug Coverage among Privately Insured, MEPS, 2000

35%

14%

29%

9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

No Dental Insurance No Drug Coverage

Rural

Urban

Rural residents with private health insurance are less likely to have dental or prescription drug coverage.

Privately Insured Individuals Who “Never” Go to the Dentist, MEPS, 2000

15%

10%

0%

5%

10%

15%

20%

Never Go to Dentist

Rural

Urban

Rural residents are 50% more likely to report they never go to the dentist.

Mean Out-of-Pocket Expenditures among Privately Insured, MEPS, 2000

$391

$462

$354

$416

$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

OOP Expenditures (All) OOP Expenditures(Service Users)

Rural

Urban

Rural residents with private coverage have higher OOP expenses, suggesting their benefits are less comprehensive than in urban areas.

Mean Out-of-Pocket Dental Expenditures among Privately Insured, MEPS, 2000

$258

$218

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

OOP Dental Expenditures (Users)

Rural

Urban

Rural residents have higher OOP expenses for dental care, reflecting lower rates of dental coverage and potentially poorer benefits.

Access to Care: Preventive Services

Time Since Last Physical Exam (Adults 18-64), MEPS, 1998

38 47 45

3531 34

27 22 21

0

20

40

60

80

100

Rural, Not Adjacent Rural, Adjacent Urban

In Past Year Past 2-5 Years More Than 5 Years/Never

Adults in RNA areas have routine physical exams with less frequency than those in other areas.

Time Since Last Cholesterol Test (Adults 18-64), MEPS, 1998

35 41 44

2021 23

45 39 33

0

20

40

60

80

100

Rural, Not Adjacent Rural, Adjacent Urban

In Past Year Past 2-5 Years More Than 5 Years/Never

Almost half of adults did not have a cholesterol test in the past 5 years, compared to only one-third of urban adults.

Time Since Last Pap Smear (Females 18-64), MEPS, 1998

55 63 66

3024 24

16 13 11

0

20

40

60

80

100

Rural, Not Adjacent Rural, Adjacent Urban

In Past Year Past 2-5 Years More Than 5 Years/Never

Women in RNA areas were 50% more likely to have gone without a pap smear in the last five years than urban women were.

Time Since Last Mammogram (Females 39-64), MEPS, 1998

64 66 75

36 34 25

0

20

40

60

80

100

Rural, Not Adjacent Rural, Adjacent Urban

In Past 2 Years Not in Past 2 Years

More than one-third of RNA women aged 39-64 had not had a mammogram in the prior two years, compared to only one-fourth of urban women.

Policy Implications

Not All Rural Places & People Are the Same

• National surveys and reports overlook sometimes dramatic differences between rural, non-adjacent, other rural, and urban residents.

– Policy-makers need to understand that not all rural areas are the same in order to design and implement effective reform strategies.

Differences in Characteristics Have Important Policy Implications

• Strategies to increase health insurance among rural residents should have a long-term focus

– Many of the rural uninsured, particularly those in counties not adjacent to an urban area, lack insurance for long periods of time.

– These strategies would contrast with past federal reforms, such as COBRA or HIPAA, which provide transitional insurance coverage.

Rural Residents Depend on the Medicaid & SCHIP Program for Coverage

• The Medicaid and SCHIP programs are a vital coverage option for many rural residents because:

1. They are less likely to be offered employer-based coverage, and

2. They have lower wages and incomes that allow them to qualify for Medicaid/SCHIP.

• Any erosion in Medicaid/SCHIP eligibility or benefits would adversely affect rural areas

Rural Economic Realities Are Critical to Expanding Insurance Coverage

• Efforts to increase enrollment in private health insurance, either through employer or individual plans, would require generous subsidies:– Financial fragility of small rural employers– Lower wages and incomes of rural workers