Who are the Uninsured?

The number of nonelderly uninsured Americans reached 47.9 million people in 2011.[1] The gaps in the U.S. health insurance system affect people of all ages, races and ethnicities, and income levels; however, those with the lowest income face the greatest risk of being uninsured.[2]  Four in ten of the uninsured are individuals who are poor (incomes less than the federal poverty level (FPL) of $22,350 for a family of four in 2011).[3] In total, nine in ten of the uninsured are in low‐ or moderate‐income families, meaning they have family incomes below 400% FPL.

Figure 1
Characteristics of the Uninsured, Under Age 65, 2010

Note: *Among Nonelderly Uninsured Adults only, ages 19-64.
Source: Kaiser Commission on Medicaid and the Uninsured, 2011, The Uninsured: A Primer- Supplemental Data Tables.

More than three-quarters of the uninsured come from working families.[4]  Most uninsured workers are self-employed or work for small firms where health benefits are less likely to be offered. Low-wage workers who are offered coverage by their employers often cannot afford their share of the premiums, especially for family coverage. In 2011, 69% of uninsured adults said that one of the reasons they are uninsured is because the cost is too high or they lost their job, compared to just 2% who said they are uninsured because they do not need coverage.[5]  The cost of insurance has risen significantly in the past decade, mostly due to the cost of providing health care. Premiums for families have risen from just over $7,000 in 2001 to over $15,000 in 2012, and employee contributions have more than doubled.[6]

A higher share of racial and ethnic minorities are uninsured than whites.  About one-third of Hispanics and nearly one-quarter of black Americans are uninsured, compared to 14% of non-Hispanic whites.[7]  Medicaid and CHIP are important sources of coverage for racial and ethnic minorities, covering over one-quarter of Hispanic and black Americans. These programs are also important sources of coverage for children in the U.S.  About 80% of the uninsured are U.S. citizens.[8]  Uninsured noncitizens include legal permanent residents with green cards, refugees and undocumented immigrants.

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Impact of Being Uninsured

Not having health insurance makes a difference in people’s access to needed medical care, their financial security, and ultimately their health.[9] The uninsured receive less preventive care and recommended screenings than the insured. The uninsured also report higher rates of postponing care or forgoing needed care or prescriptions due to cost as compared to those enrolled in Medicaid and other public programs.[10] Research has established that extending coverage to the uninsured improves physical and mental health and reduces financial strain associated with health care costs.[11]

The financial impact of health costs for uninsured families can also be severe.  Uninsured individuals pay for more than one‐third (35%) of their care out‐of‐pocket.[12] Uninsured individuals also typically pay more for care they receive because they cannot negotiate discounted rates for care like insurers or large employers.[13]  Furthermore, these costs have direct impacts on household finances. Uninsured adults are three times as likely as the insured to report that they could not pay for basic necessities such as housing or food due to medical bills.  Medical bills may also force uninsured adults to exhaust their savings.  In 2010, 27% of uninsured adults used up all or most of their savings paying medical bills.[14]

The majority of care for the uninsured is provided by the safety net, which is comprised largely of community clinics, public hospitals, and local service providers.[15] These providers often face fiscal shortfalls and are unable to fully substitute for the access to care that insurance provides, or meet the health needs of nearly 50 million individuals. Many hospitals also provide charity care to the uninsured called “uncompensated” care because the patients do not have a source of payment other than their own funds. The states and the federal government do pay some level of supplemental payments to these providers, but it is often not enough to cover the actual cost of care they provide.[16]

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Trends in Insurance Coverage

During the recession that began in 2007, millions of people—primarily adults—lost insurance coverage and joined the ranks of the uninsured, reaching a high of 49.2 million people in 2010. In 2011, the number of uninsured began to decline, falling by 1.3 million, the first decrease in four years.[17] Despite this modest reduction in the number of uninsured, almost one in five (18.4%) of the nonelderly (under age 65) remained uninsured in 2011.[18]

Because the majority of the nonelderly receive their health insurance as a job benefit, the steady decline in employer-sponsored health coverage since 2000 and the current weak job market largely explain the growth of the uninsured.  The safety net of Medicaid and the Children’s Health Insurance Program (CHIP) has prevented a larger increase in the uninsured and, in particular, buffered children from the full effects of the difficult economic climate (Figure 2).   

Figure 2
Number of Nonelderly Uninsured, 2007-2011

* Applied Census  2010-based population controls.
NOTE: May not sum to totals  due to rounding.
SOURCE: KCMU/Urban Institute analysis of 2009 through 2012 ASEC Supplement to the CPS. Holahan J and Chen V. “Changes in Health Insurance Coverage in the Great Recession, 2007-2010.” Kaiser Commission on Medicaid and the  Uninsured. December 2011.

Young adults (19 to 25) have one of the highest rates of being uninsured of any age group (27.9%).[19] The rate has declined over the past two years, in part due to a provision in the Affordable Care Act (ACA) allowing young adults to remain on their parents’ private health insurance policies as dependents until age 26.[20] The change in coverage for this age group accounted for 40% of the overall decline in the number of uninsured between 2010 and 2011.[21]

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The Uninsured and the ACA

Over the next ten years, the Patient Protection and Affordable Care Act (ACA) of 2010 is expected to reduce the uninsured rate by more than half. Beginning in 2014, the ACA will fill existing gaps in coverage by expanding the Medicaid program to most individuals with incomes at or below 138% FPL (currently, some low-income adults are ineligible for the program), building on employer-based coverage, and providing premium subsidies to make private insurance more affordable for many between 139% of 400% of poverty. These coverage expansions are expected to extend coverage to 30 million people when fully implemented.[22]

As a result of these provisions, experts predict that the uninsured rate will fall to 8% of the nonelderly, versus the 20% it is expected to be without reform.[23] Those who remain uninsured after health reform implementation include individuals who many not qualify for assistance, such as those who are not in the United States legally, as well as other individuals who may be exempt from the law’s requirement that all individuals get coverage. These individuals will still need to rely on the nation’s health care safety net of public hospitals and clinics that provide care to the uninsured.  

Source: This background brief includes excerpts from The Uninsured: A Primer , Five Basic Facts on the Uninsured, and KaiserEDU’s Tutorial Overview of the Uninsured, by the Kaiser Commission on Medicaid and the Uninsured.

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Updated: September 2012