NCPA - National Center for Policy Analysis

Census Bureau Overestimates Uninsured Rate For Higher Income Groups

July 27, 2000

Census Bureau data regarding the uninsured rate in the higher-income brackets may be overestimated by a flaw in survey terms. The Census Bureau uses the term "household" to refer to all individuals living in the same residence, whether related or not. They consider all income of those in the household as "household income." Households include broad living arrangements such as college roommates, multiple families and adult relatives. The problem is that not all members of these households have access to the total income of the household. This affects the ability to purchase health insurance.

For example:

  • A family with an income of $80,000 could consist of a two-income family with two children where each adult makes $40,000; or it could be a family of two wage-earners making $30,000 each and a related adult family member making $20,000 who cannot be covered by the same health insurance because he or she is outside the immediate family, such as a niece or nephew.
  • Three young adult unrelated roommates making $18,000 each would be listed as a household with income of over $50,000, despite the fact that each roommate's personal income is less than $20,000, and none can be a source of insurance for the others because they are all unrelated.
  • Two families, each with an income of $40,000, sharing the same house, would be included as a household with over $80,000 in household income.

The failure to account for these differences overestimates the rate of uninsured in the higher income levels and paints an inaccurate picture of the uninsured problem.

  • The Bureau reported that 8.3 percent of individuals in households with incomes over $75,000 were uninsured; however, when reports only consider actual families, the percentage falls to 6.8 percent.
  • A family with two workers earning a total of $75,000 is less likely to be insured than a single individual making $75,000 because each only has access to $37,500 of that income; thus while 5.2 percent of workers earning $75,000 or more is uninsured, that number jumps to 9.7 percent for those earning between $25,000 and $49,999.

When income is recalculated to exclude income of unrelated persons and related adult family members, the number of higher-income uninsured drops.

Source: "Census Bureau Reports May Overestimate Uninsured Rate in Higher Incomes Households," BNA's Health Care Policy Report, March 20, 2000; and Paul Fronstin and Rachel Christensen, "The Relationship Between Income and the Uninsured," EBRI Notes, March 2000, Employee Benefit Research Institute, 2121 K Street, N.W., Suite 600, Washington, DC 20037, (202) 659-0670.


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