NCPA - National Center for Policy Analysis

Myths About The Uninsured

September 20, 2000

Why don't some people have health insurance? If it were simply a matter of being able to afford the premiums, an income-based subsidy would solve the problem. And if every family thinks health insurance is essential, all the families who qualify for free public programs like Medicaid would enroll -- but millions of them don't.

The matter is far more complex. Almost half of uninsured Americans have household incomes at least twice the federal poverty level, while the number of low-income people who lack insurance has remained relatively stable in recent years.

A recent study of non-poor uninsured Californians found that for many respondents "health insurance cost about twice as much as they were willing to pay."

  • 60 percent of those surveyed admitted that they worry about access to care or the financial risk of being uninsured, but 57 percent disagreed with the statement, "Health insurance ranks very high on my list of priorities for where to spend my money."
  • 43 percent agreed that "health insurance is not a very good value for the money."

Fortunately, being uninsured is not the same as being without health care. For example, according to a recent report by the Texas Comptroller, through public and private means, Texas spends an average of about $1,000 per year on every uninsured individual in the state.

Unfortunately, expanding public programs often encourages people to drop their higher-quality private insurance policies. According to the Center for Studying Health System Change, after the State Children's Health Insurance Program (CHIP) was implemented in 1997 the percentage of children from low-income families covered by private insurance policies fell sharply. Although the number of low-income children enrolled in public programs rose, this did nothing to reduce the number of children without insurance.

Source: Devon M. Herrick (NCPA research manager), " Five Myths about the Uninsured in America," Brief Analysis No. 339, September 20, 2000, National Center for Policy Analysis.

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