Center for Studying Health System Change

Determining Vulnerability: A Complex Issue

Passage of legislation to expand insurance coverage for children was made possible because children are relatively inexpensive to cover (due to their good health and low health care use) and because there was a strong national consensus about the importance of access to care for children. Whether this consensus can be forged for other groups -- including the near-elderly and young adults -- is unclear, but may ultimately be the most important factor in determining for which groups further expansions will be directed.

Rather than trying to determine who is most vulnerable, perhaps it is more useful to consider how individuals in different age groups are uniquely vulnerable, and what these differences imply regarding strategies to increase insurance coverage. Relative to most other age groups, health insurance coverage does not appear to be a problem for most near-elderly individuals, many of whom have relatively stable financial situations after a lifetime of employment and fulfilled family responsibilities. However, those near-elderly who are uninsured may be among the most intractable and difficult to address since they are among the poorest and sickest of the uninsured population. Most apparently do not have access to affordable retiree health benefits or employer-sponsored coverage, and purchasing individual coverage is beyond the reach of most uninsured near-elderly. Although their higher health needs and poor economic circumstances suggest the need for greater urgency in addressing the problems of this group, it is doubtful that many uninsured near-elderly persons will be helped without a significant public subsidy.

In contrast, young adults are the most vulnerable to being uninsured. Much of the problem among young adults is undoubtedly related to making the transition between childhood and adulthood, which involves losing eligibility for many public programs and dependent coverage under their parents’ insurance. At the same time, they do not have the degree of labor force participation and economic security for themselves and their families that would enable easy access to private insurance coverage. While most uninsured older adults are at or near the end of their working lives and will find it difficult to obtain health insurance before they become eligible for Medicare, many younger adults will eventually obtain coverage as they move up the economic ladder.

Another issue that makes contemplating assistance to young adults difficult is that some voluntarily refuse health insurance, either by declining employer-sponsored insurance or by selecting jobs with no health benefits to maximize wage income. While this self-selection into uninsurance should not be overstated -- since most young adults accept coverage when offered and those who are uninsured have generally worse health -- it does suggest that an assistance program to young adults that is strictly voluntary without being heavily subsidized may get even fewer takers than among the near-elderly.

While the generally good health status of young adults would make coverage less costly, good health also decreases the salience of health insurance and the willingness of healthy young adults to incur significant financial burden to obtain coverage. In other words, a degree of financial burden that is considered acceptable by near-elderly persons may be onerous to the majority of young adults. Young adults also appear to experience access problems in part because fewer are connected with regular providers and they are less experienced and knowledgeable about using the system, factors that may not be mitigated merely by obtaining health insurance coverage.

Given these findings, policy makers need to consider what the ultimate objective of incremental health insurance expansion is before they target specific groups. If the goal is to reduce the number of uninsured persons, then targeting young adults would be most effective, not only because of the high rate of uninsurance among this group, but also because they are less expensive to cover and limited public funds can be spread over a larger number of individuals (as was the case with children).

If the goal is to target assistance to those with significant health care needs, then there is some justification for focusing on the near-elderly, although there are uninsured persons in all groups who have significant health needs. And because poor health often goes hand-in-hand with low income, targeting the medically neediest -- especially the near-elderly -- will probably not be feasible without some significant additional commitment of public funds.

However, if the goal is to target assistance to those with unmet needs, then it is less clear that incremental health insurance expansions should be targeted at any particular age group. Despite the higher health needs of uninsured near-elderly, all uninsured adults appear to encounter significant financial barriers to getting the care they need, regardless of age. While determining unmet health needs is much more complicated, the ability to obtain needed health care is ultimately the main reason why policy makers are concerned about the problem of uninsured Americans.