Poverty: Insurance Theory and the Medically Uninsured

Abstract

The federal/state Medicaid program is designed to provide health insurance for the nation's poorest, yet between 15 and 20 percent of the population continue to have no health insurance. Classic utility-based insurance theory is examined to see if it well explains why some do and some do not purchase health insurance at the state level or if a host of other non-economic factors are needed. This pooled, cross-sectional time-series analysis shows that the state characteristics most strongly associated with the prevalence of a lack of health insurance is the percent of persons whose income falls below the poverty line, the percent of the state's population that is female and the percent of the population with only a high school education. This analysis suggests that the starting point for policies aimed at limiting the number of insured should be limiting poverty and perhaps recognizing the gender/education influence in designing state eligibility requirements. Copyright International Atlantic Economic Society 2005I18, I10,

Behavior in the Market for U.S. Army Recruits: PLS and 2SPLS Analysis of the Impact of Health Insurance Unavailability in the Non-Military Sector, 2003-2007

“…Given the limitations on Medicare coverage, Newhouse (1994, p. 7) observes that many elderly persons regard Medicare coverage as insufficient to meet their needs, leading to the finding that "…over 80 percent of Medicare beneficiaries…had some form of supplemental health insurance, with a third having individually purchased insurance." Frick & Bopp (2005) observe that the classic utility-insurance model makes it patently clear that having a very low income can seriously restrict the ability to purchase health insurance. The Frick and Bopp (2005) study not only focuses on the effects of poverty on health insurance purchases but also on other factors.…”

“…Frick & Bopp (2005) observe that the classic utility-insurance model makes it patently clear that having a very low income can seriously restrict the ability to purchase health insurance. The Frick and Bopp (2005) study not only focuses on the effects of poverty on health insurance purchases but also on other factors. For example, Frick & Bopp (2005) find that the percent of the population without health insurance is an increasing function of the percent of the population whose income lies below the poverty level, the percent of the population that is female, and the percent of the population with only a high school diploma.…”

“…The Frick and Bopp (2005) study not only focuses on the effects of poverty on health insurance purchases but also on other factors. For example, Frick & Bopp (2005) find that the percent of the population without health insurance is an increasing function of the percent of the population whose income lies below the poverty level, the percent of the population that is female, and the percent of the population with only a high school diploma. ISSN 1948-5433 2010 www.macrothink.org/rae 4 most interesting aspect of this study is the effort to include as an explanatory variable a measure of the effects of being either self employed or an independent contractor.…”

“…Since ENLIST and UNINS are specified as being contemporaneous, a 2SPLS (two-stage panel least squares) estimation is undertaken, with the instrument being the two-year lag of the percent of the population in each state that is at or below the federally defined poverty level, POVt-2. The choice of this instrument is based on the finding in Frick & Bopp (2005) that a higher poverty rate raises the percent of the civilian population without health insurance, whereas ENLISTt and POVt-2 were found to be very highly correlated and variable POVt-2 is not correlated with the error terms in the system. ISSN 1948-5433 2010 As shown in equation (7), the estimated coefficients for all six of the non-trend explanatory variables exhibit the expected signs, with three being significant at the one percent level, and three being significant at the five percent level.…”

“…This attention covers a broad spectrum of topics, ranging from hospital costs, profitability, and efficiency issues to medical malpractice to physician staffing to health care inflation (Chirikos, 1998-99;Daniels & Gatsonis, 1999;Given, 1996;Glied, 2003;Goodman & Stano, 2000;Jordan, 2001;Karsten, 1995;Okunade, 2001Okunade, , 2003Olsen, 1996). These issues notwithstanding, the issue that has received the greatest growth in attention is that of health insurance coverage (Bharmal & Thomas, 2005;Cebula, 2006;Cutler, 1994;Dushi & Honig, 2003;Frick & Bopp, 2005;Gruber, 2003;Harris & Keane, 1999;Kronick & Gilmer, 2002;Newhouse, 1994;Nyman, 2003;Swartz, 2001Swartz, , 2003. This high visibility has resulted in enormous public controversy over proposed federal legislation in the form of HR 3200 ("America's Affordable Health Choices Act of 2009") and other somewhat similar health care reform proposals.…”