Making Work Pay II

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Abstract

Only 37 percent of adults in low-income working families had employer-sponsored health insurance and 42 percent had no coverage. Health care costs are also rapidly rising out of reach for even middle-income Americans. In this essay, Perry and Blumberg propose comprehensive reform that ensures coverage for everyone at every income level, while still encouraging work. Their proposals include state purchasing pools, individual mandates, and strategies for reducing health care costs.

Introduction

While employment has never been a guarantee of health insurance, the link between employment and health insurance has weakened, particularly for low-income families. Between 2000 and 2005, the number of uninsured Americans grew by 6 million. Most of this growth was among low-income working families (Clemans-Cope, Garrett, and Hoffman 2006). Limited access to public insurance for these families, especially for adults, combined with the limitations of private, individually purchased insurance leave many modest-income workers and their family members without access to affordable, adequate health insurance.

Strategies for addressing low-income working families’ heath care needs must take account of the weaknesses of private markets as currently structured, the gaps in the public insurance system, and the pressures of health care costs rising far faster than incomes. Below we outline such a strategy—a systematic approach for expanding health insurance coverage and ensuring consistent coverage for all income and employment groups and for all life-cycle transitions.

Impacts of Being Uninsured

Health insurance provides an important financial support to families struggling to cover daily living expenses. This support is particularly important for low-income families, which are more likely to have members in fair or poor health than are higher-income families, as shown in table 1 (Bloom, Dey, and Freeman 2006; Pleis and Lethbridge-Çejku 2006).

(End of excerpt. The entire report is available in PDF format.)

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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