As the federal budget reconciliation process heats up, Congressional committees will soon be drafting legislation that spells out the program cuts Congress will need to offset the cost of extending existing tax cuts. Given that non-defense discretionary spending represents less than 18 percent of the federal budget, and the Administration has pledged to protect Social Security and Medicare spending in the budget debate, federal spending on private and public health insurance—specifically Marketplace coverage and the Medicaid program—is one of the very few sources policymakers can turn to for significant budget savings. At the same time, some conservative and industry voices have argued that individuals and families would be better off without health insurance. In fact, a mountain of evidence demonstrates that health coverage confers improved health outcomes and significant financial security on health insurance enrollees.
Could Americans Be Better Off Without Health Insurance?
Right-of-center health policy analysts, libertarian think tanks, and self-interested stakeholders have recently argued that health insurance drives up prices for health care services while failing to improve population health. These thinkers and entrepreneurs advocate for a narrow range of solutions – for example, a “retail model” that requires patients to pay for care on their own, without the financial support of a health insurance plan, or calling for a government role limited to encouraging healthy behaviors and technical innovations.
The American health care system is demonstrably flawed—market consolidation among health plans and health systems has driven up insurance premiums and provider prices, patients experience significant waits for appointments with primary care, behavioral health, and other providers of critically needed care, and patients must endure time-consuming prior authorization requirements and fail-first policies to see the providers and access the medications they need. These problems demand solutions—but that solution isn’t to rip away the access to care, improved health outcomes, and financial security that health insurance facilitates for more than 300 million people in the United States.
What We Know From the Evidence
Over the decades, a plethora of studies have examined the impact health insurance coverage and coverage expansions have had on individuals’ health care and health status. A 2017 synthesis of existing evidence, for example, considered more than 25 studies within that decade that examined the relationship between health insurance and financial security, access to care, chronic disease outcomes, self-reported health, and mortality for nonelderly adults. The authors determined that health coverage expansions significantly increase patients’ access to care and use of multiple types of care (e.g., preventive care, primary care, medications, and surgery), and produce “significant, multifaceted, and nuanced benefits to health.” Nearly a decade earlier, a similar review concluded that coverage matters most for older and sicker individuals and for those with health-care amenable conditions. While aging adults are more likely to experience conditions such as cancer and heart disease, this analysis also noted that the health consequences of insurance are particularly significant for conditions such as hypertension, diabetes, and HIV infection.
In the time since these reviews, further studies have demonstrated the impact health coverage has on access, health outcomes, and financial security. We consider findings from some classic studies and newer research along these dimensions below.
Access to timely care: Health coverage improves access to primary care, preventive care, and timely care for emerging health conditions. For example, evidence demonstrates that newly covered individuals enjoy increased utilization of primary care, preventive visits, and care for chronic conditions—all of which improve health outcomes and population health. State-specific coverage expansions that pre-date the Affordable Care Act (ACA), for example, have been shown to improve utilization of preventive visits in Massachusetts and access to critical cancer screenings in Oregon. The ACA’s coverage expansions have also improved access to preventive care and other health care services. For example, one study found improved screening, staging, and treatment for cervical cancer among young women with coverage under the ACA’s extension of dependent coverage to young adults under age 26. Studies of the ACA’s coverage expansions have also found improved access to health services for all in tandem with additional benefits to traditionally underserved communities, such as people of color. For example, ACA implementation led to larger reductions in the share of blacks and Hispanics who report forgoing care because of cost compared to white individuals.
Improved health outcomes: In addition to improving access to primary and preventive care—which help people maintain and improve their health status—evidence demonstrates that health coverage influences other measures of improved health. For example, one recent study found that uninsured patients are more likely to experience an unplanned surgery for access-sensitive conditions, such as colectomy for colon cancer, suffer worse clinical outcomes, and have longer hospital stays than patients with private insurance. Numerous older studies have found significant reductions in all-cause mortality and mortality related to health-care amenable conditions for insured patients, compared to uninsured patients. Recent studies have found mortality reductions among newly insured older adults and determined that insured patients with life-threatening conditions, such as traumatic brain injury, experience lower in-hospital mortality rates than uninsured patients. Recent research has also confirmed that the ACA’s Medicaid coverage expansion reduces mortality among enrollees—for example, among near-elderly enrollees, for individuals who experience cardiovascular events, and for health-care amenable causes of death—compared to non-expansion states.
Improvements for Vulnerable Populations: Health coverage is notably associated with improved health outcomes among vulnerable population groups, such as patients with chronic disease, people with a history of uninsurance, and children who live in immigrant families. For example, insured patients with HIV infection are more likely to obtain an undetectable viral load and less likely to miss critical health care visits than uninsured patients, while transgender individuals with health insurance self-report greater improvement in physical and mental health than those without health coverage. In addition, children in immigrant families who live in states that have expanded health insurance coverage are more likely to access needed care and preventive visits than children in similar families who live in less generous states.
Financial Security: A significant secondary role for health insurance is to protect individuals and families from the high and unpredictable cost of health care services. Individuals who develop a life-threatening disease or experience a catastrophic accident can quickly incur health care bills that threaten their family’s financial health. More than half of adult Americans, for example, report they have acquired debt related to medical or dental bills. While coverage is imperfect—high deductibles and cost-sharing requirements leave patients with significant financial exposure—health insurance largely protects families from the financial risk of serious health needs. For example, multiple studies have found that health coverage reduces the probability of unpaid medical bills for Medicaid enrollees, young adults with dependent coverage, and individuals with subsidized private coverage. In addition, recent studies have found that fewer patients incurred catastrophic health expenses following the ACA’s coverage expansions. In an examination of California trauma patients, individuals’ probability of facing catastrophic bills—defined as more than 40 percent of their income after food and housing costs—fell by 74 percent following ACA implementation, with even greater risk reduction for Black and Hispanic patients. Similarly, the proportion of adults incurring catastrophic health care spending fell from 7.4 percent in 2010 to 5.9 percent in 2017. Before implementation of the ACA, seven in ten uninsured trauma patients, particularly those with low-incomes and those who experienced severe injury, were at risk of incurring catastrophic health care bills.
Key Takeaways
A large body of research has established the important role health insurance plays in securing access to care, improving health outcomes, and shoring-up families’ financial security. Much of this research examines the ACA’s coverage expansions, which are also enduringly popular with the American public. Efforts to cut federal support for health coverage, reduce Marketplace enrollment, or otherwise compromise the gains the US has made since our last national policy debate on health coverage will undermine the health and financial status of American families.