Thursday, September 10, 2009

Almost 4 Out of 10 Uninsured Americans Live in Households Making More Than $50,000 Per Year

According to this Census Bureau report "Income, Poverty, and Health Insurance Coverage in the United States: 2008" (released today), there were 46.34 million uninsured Americans in 2008, up from 45.6 million in 2007.

The chart above shows the household income levels of those 46.34 million uninsured Americans. There are 9.725 million uninsured Americans living in households making $75,000 per year or more, and this represents more than 1 out every 5 uninsured (21% of the total). There are about 8 million Americans without health insurance in households making between $50,000 and $75,000, representing 17.3% of the uninsured. With those two groups combined, 38.3% of Americans without health insurance (17.75 million people) lived in households with $50,000 or more of household income in 2008 (see Table 7 for these data).

Update: According to The Kaiser Family Foundation, the average annual premiums for employer-sponsored health insurance were $4,704 for single coverage ($392 per month) and $12,680 for family coverage in 2008 ($1,056 per month). And various individual Blue Cross Blue Shield plans are available in Michigan (other states may vary) starting at $173.18 per month for the Individual Care Blue Plus plan, $52.82 per month for the Flexible Blue II plan, and $49.30 per month for the Young Adult Blue plan.

Q: With $50,000 or more in household income, wouldn't many or most of those 17.75 million uninsured households be without insurance voluntarily? That is, couldn't most of those households afford health insurance? Alternatively, with those income levels (especially the 9.725 million with household income above $75,000), couldn't many of those households choose to forego health insurance in favor of being "self-insured," at least for routine health procedures? Given the widespread availability of more than a thousand convenient and affordable retail health clinics around the country at Wal-Marts, Meijers, CVSs and Walgreens, these households could easily be on the "pay-as-you-go" model of self-insurance for health care, at least for routine medical services.

As for those uninsured Americans who are supposedly the reason for all this sound and fury, there is remarkably little interest in why they are uninsured, despite the incessant repetition of the fact that they are. The endless repetition serves a political purpose but digging into the underlying facts might undermine that purpose. Many find it sufficient to say that the uninsured cannot "afford" medical insurance. But what you can afford depends not only on how much money you have but also on what your priorities are. Many people who are uninsured have incomes from which medical insurance premiums could readily be paid without any undue strain (see chart above).


At 9/10/2009 11:33 AM, Blogger bob wright said...

In last night's speech, Obama said they will eliminate $550B of waste & fraud in Medicare to pay for the new health care bill.

Why not eliminate the $550B anyway?
Why wasn't the $550B eliminated last year?

How much waste and fraud is piling up why congress blathers on about how concerned they are?

If no health care bill is passed, is the waste & fraud just going to continue?

At 9/10/2009 1:21 PM, Blogger Dean Esmay said...

There are many potential reasons they're uninsured. $50,000/year is not a lot of money at all in some parts of the country, especially if you have children. Many of those families may well be unable to obtain insurance for anything they can afford; may even have been turned down due to pre-existing conditions, etc. For my family to get insurance, we needed over $1,000/month at one point, and we could barely swing it at all between mortgage, car payment, utilities, food, and kids' needs. We hardly lived an extravagent lifestyle either.

It also is good to ask: of those voluntarily going without insurance, are they really being responsible? If they get seriously ill, they're going to be a serious burden on the rest of us. If they can afford insurance and just aren't buying it, they aren't just putting themselves at risk, they're putting a potential burden on everyone. It's irresponsible not to carry insurance if you can afford it.

At 9/10/2009 1:27 PM, Blogger stevedp86 said...

I think we all can agree that there is a ton of waste in the industry that needs to be eliminated regardless if the end result is universal health care.

A lot of people are happy with their health insurance because it comes from their employer...however, the employer is passing on the rising health care costs in the form of lower wages.

Health insurance and pharma companies have so much political power it is ridiclious...and politicans are more concerned getting reelected then actually fixing the problem.

At 9/10/2009 2:00 PM, Anonymous Anonymous said...

This health care bill is not about reform. It is about government interference and control. Strange that the US Supreme Court ruled in Roe vs. Wade that abortion is a matter between doctor and patient. However, according to the Democrats, the rest of the doctor-patient relationship is negotiable.

If the bill was simply about government insurance that was voluntary and available to people who paid premiums, that would be one thing. But it's not. It's about government's complete control of the doctor-patient relationahip. The government decides, not patients. How did the human race survive the last 10,000 years without Obama and Company???

The president wants us to buy a car but we can't look under the hood and there can be no mention of price. We have to trust him.

I like the GOP plan. And it won't cost us a cent.

At 9/10/2009 2:01 PM, Blogger Highgamma said...

Mr. Esmay, of course, it is the "irresponsible" statement that Obama made last night that made me leap from my seat. People choosing not to buy something is "irresponsible"? We've really lost our way.

We currently have a "too sick too fail" policy in this country where if people get seriously ill, we will treat them no matter what. One could argue, perhaps, for catastrophic coverage because of that chosen public policy; however, did you watch the rest of the speech? Health coverage would be mandated to include a whole series of items that are not catastrophic coverage. We'll all be forced to buy "Cadillac plans" (though I'm not sure that the word "Cadillac" gives me much comfort).

What is the net effect? The same as most public policy. Young, healthy people will be forced to buy health coverage that they neither want nor need. (Remember we will be required to buy a bundle which includes health coverage as well as catastrophic health insurance.) They won't even be able to get the tests for which they are paying! (Mammograms and colonoscopies. etc. will generally be disallowed for these young people, yet they will pay for them.)

The net effect is as it usually is. The young will, once again, be forced to subsidize the old. As I get older and watch the young support these policies so blindly, I begin to laugh more.

At 9/10/2009 2:07 PM, Anonymous Anonymous said...

The way to insure enough income for all is to focus growing the economy, not taxing and spending. If Obama would focus on growing the economy $6 trillion over the mext 4 years, there would be plenty of tax revenue for health care programs and people could more easily afford health insurance with more income.

At 9/10/2009 3:16 PM, Anonymous Benny The Libertarian said...

$12,000 a year to cover a family of hour? And median income is below $50k a year?
Yeah, I would say health care costs too much.
I am in favor of: 1) euthaniasia for people who are terminally ill and aged 2) binding arbitration for all "malpractice" claims, handled by panels of doctors 3)Telling patients that medical service should be fast and brusque, so that costs will be lower.
Get over it--or pay $12k a year. I want it cheap and fast.

At 9/10/2009 5:37 PM, Anonymous Jean-Baptiste Say said...

I'm with Bob. How about taking that $550 B out anyway?

I still don't understand how any of what is being proposed will actually lower costs, though.

At 9/10/2009 9:03 PM, Anonymous Anonymous said...

this BO plan is cleary a power grab, an attempt to implement socialism without the brass to call it that.
By my rough calculations, there are perhaps 25 million people who I would be willing to subsidize--down and out, poor. And data show many of those are w/o coverage for brief periods (eg, between jobs). Now if we take out those who can afford but don't buy insurance, the group is smaller. Last night alone 16 million disappeared from the uninsured rolls--BO said so and I believe him (sarcasm). Young folks who don't insure must agree in blood to get any care if catastrophe hits. or buy in. illegals, nada. program-eligible but too dumb or lazy to sign up, zip.
Highgamma--you obviously don't understand how insurance works if you think the younger participants are getting screwed. the whole idea of insurance is that many pay in, fewer take out. otherwise only an idiot (or a socialist) would run an insurance company.

BO and his guys are either stupid as they come or lying through their teethe. this can't be done and reduce the spend--only a lib thinking would eat that BS.

to paraphrase Rep Wilson, "he lies!"

At 9/10/2009 10:50 PM, Blogger Highgamma said...


I believe that I do understand how insurance works. However, the proposed plans are for a combination of health care and health insurance. If I own a car and am forced to buy insurance for a car I never drive, I am clearly subsidizing the person who drives his car 80K miles per year. Also, if I'm forced to have a fixed price, pre-paid maintenance plan, I'm also subsidizing the drivers who drive a lot.

The same goes for health coverage. Single men at age 25 and age 40 will pay the same rate even though the 25 year old is substantially less likely to draw upon the health care part of the coverage (as well as the health insurance part of the coverage). The young get the short end of the stick.

Hey, I'm getting older every day. If the youth want to march in the streets to subsidize my health care, I can only smile.

At 9/11/2009 12:22 AM, Blogger Unknown said...

I think there is an error in the chart. The first bar label says "13.7m Households."

That should be individuals, not households, shouldn't it? Assuming I am correct, there are 28.6 million uninsured with household incomes below $50,000.

Assuming about 2.2 people per household, that is probably no more than 13 million multi-person households [or a smaller number of multi-person households plus many individuals].

If the govt. gave out vouchers for insurance policies at $12,000 per family, we could insure all 28.6 million for $156 billion a year [13 m households x $12,000 each].

I am not advocating that, but this number seems to indicate that the "real" problem of insuring low income families isn't all that huge compared to everything else the feds are doing. And we could implement such a voucher solution without the rest of the government take over of medicine.


At 9/11/2009 12:53 AM, Anonymous Anonymous said...

John has a point we are talking about 90 billion a year according to Obama, the press have looked at the 10 year number an quoted it. While 90 billion is a lot, its like .6% of gdp or 3% of the current federal expenditures, not small change.

At 9/11/2009 2:10 AM, Blogger Unknown said...

Thanks for posting this and thanks to Mark for getting this out to his audience. Now we have real proof that we aren't a bunch of calloused people who don't care about their neighbor not having health insurance.

At 9/11/2009 2:16 AM, Anonymous Real Mama said...

To Dean Esmay

I understand $50,000 is not a lot of $$ since I live in the Bay Area. But to your other point...if they are going without insurance and get seriously ill - then it is up to them to figure out how to pay. They ( the hospital, etc.) will have to go after them like the credit card companies and other debt collectors go after all of us. Visit my blog to see how my thoughts on how we can potentially solve the COSTS associated with health care - not the health care itself.

At 9/11/2009 6:25 AM, Blogger Mark J. Perry said...

John: Yes, you are correct, the graph has been corrected, and now says "13.7m individuals."

At 9/11/2009 11:09 AM, Anonymous JimJinNJ said...

A friend of mine are (for fun) costing out a proposal I have cooked up: first, we decide who is REALLY uninsured with no other recourse, 2) we get better-situated families to "adopt" an uninsured family--say 10 to 1. (this is similar to lending arrangements such as No government involvement at all, jsut a non-profit to set up and run the exchange website, handle funds, etc.

As BO says, there a few details to figure out but the idea is charity basically.

Another point I don't understand--shouldn't we consider Medicaide as the resource to extend to the legitimately uninsured?

At 9/11/2009 11:18 AM, Anonymous Anonymous said...

Dean Esmay--
Keep in mind that people are not (yet) restricted as to where they live. If you choose to live in one of the most expensive cities in the world, please don't expect me to subsidize you costs (health or otherwise). Move you behind to anther city. Try as a resource to compare cities on all kinds of cost.
Your protest is pathetic.

At 9/11/2009 11:22 AM, Anonymous Anonymous said...

thanks for the reply. I may have misunderstood your first post. I think we actually agree.

to be continued.

At 9/11/2009 11:26 AM, Anonymous Anonymous said...

The answer to this question "couldn't most of those households [those earning $50,000 or more] afford health insurance?" is an emphatic NO, and posing this question demonstrates how out of touch you are with the harsh realities facing families in this income bracket. The average monthly family premiums you quote of $1056 represents 25% of the GROSS income of a household earning $50,000 per year. Assume that that family pays no income tax, and just remove their Social Security, Medicare, Medicaid contribution removed from their paychecks and their take home falls to about $46,500. Now, include the fact that under the average health insurance policy, every single medical action someone takes costs more money out of pocket...every office visit, every prescription with a copay, much less a 20% contribution required for more serious treatment (which is another common feature of these plans), and you can reasonably expect the actual out of pocket healthcare maintenance costs for a basically healthy family of four with no major medical crises to be much higher than just the $1056 premium. If you assume just a modest amount, say an extra $100 per month for those additional out of pocket expenses, you end up with annual healthcare costs of $13,872... out of an available $46,500 take home pay... That's 29.8% of your pay going to healthcare in a very conservative estimation. That leaves $2719 per month for all your family expenses, less healthcare. How many of you could cloth and feed your kids, make your mortgage or rent, own and maintain a car, and cover all the unexpected expenses life springs on you for $2719 per month? The current system is broken people, and it's not rewarding "socialists" or "liberals" or "republicans"'s rewarding pharmaceutical and insurance corporations who've been allowed to put us in a strangle hold through THE LACK OF government regulation, at the tremendous expense OF ALL AMERICAN CITIZENS. We need reform now.

At 9/11/2009 11:59 AM, Anonymous Anonymous said...

re "The answer to this question "couldn't most of those households [those earning $50,000 or more] afford health insurance?" is an emphatic NO....."

I tend to agree with you as a matter of family budget. My health insurance is approximately $16K/yr--5K ded, $30-50 copay.
this is a very good PPO (BCBS). As a self-employed person it is also deductive as a business expense. I use a flex spending acct to moderate the impact of the deductible.

The question is: is this $50 person/family entitled to the same coverage in this country? I say no, but there's more...

Let's say my coverage is state of the art. Does that mean the other should get that same thing? I say no, but there's more...

How about if "we" agree to give that person Medicaide coverage OR medicine that was state of the art in, say, 1997?

My hypothesis is that they could very good care and the premium would be a lot less. They wouldn't get Crestor, for example, but they could get one of several generics at Wal-Mart for $4.

At 9/11/2009 12:07 PM, Anonymous Anonymous said...

Some of you may be familiar with which purports to show insurance reimbursement amounts by zip code and equips you to negotiate with your doctor or lab.

It works.

My wife fell and injured her wrist, which was badly broken 20 years ago.

Orthopod wanted an MRI after seeing xray. he suggests South Jersey Radiology.
Yikes! I have no rad coverage until I hit $5K deductive.

I call SJ Rad and they tell me it costs $2350. any discount for cash, no insurance. 20% if paid at time of visit.
I keep calling. Vineland NJ offers $1100 plus free transport.
I keep calling. Pensauken (NJ) Imaging, LLC offers $500.

This tells me that educating consumers is part of this issue. and doctors. he must have assumed we had insurance that would cover this and had no idea (I hope) he was sending us to the most expensive MRI in the area.

So a $50K family might be able to get more than they think if they read, call, play an active role.

It is not the whole solution but part. Just giving someone a policy paid for by their neighbors is wrong and disincents people to to help themselves.

Oh and purely coincidentally, enriches the fortunes and careers of politicians who buy votes with my tax dollars.

Of to DC for the 9/12 event.


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