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Sources of Health Insurance Coverage in Georgia

by Tony Novak, CPA, MBA, MT,   originally published December 26, 2010   updated June 13, 2011

 

This article reproduces the highlights and key findings of a report titled "Sources of Health Insurance Coverage in Georgia: 2008 Tabulations of the March 2009 Annual Social and Economic Supplement to the Current Population Survey by William S. Custer, Ph.D. and Patricia Ketsche, Ph.D., Center for Health Services Research Institute of Health Administration of the J. Mack Robinson College of Business at Georgia State University. This republished summary of the research is meant for public non-professional use so all of the supporting data is removed. The original text is reproduced in bold. The highlights and other commentary was added by me. A copy of the entire report, marked up highlighted by me for purposes of preparing this article is available in PDF format. All of the data tables, details and references omitted in this article can be found in the original document.

Summary of Findings

Nationally, the number of uninsured Americans increased by over 700 thousand to 45.6 million, while in Georgia the number of uninsured increased slightly to 1.67 million between 2007 and 2008. Georgia and the nation as a whole saw a continued decreased in private coverage coupled with an increase in public coverage. Compared to national estimates, a significantly larger proportion of Georgians lack any source of coverage. Eighteen percent of all Georgians and over 19 percent of non-elderly Georgians lack coverage. Georgians are slightly more likely to have public coverage (20 versus 19.4 percent) than in the nation as a whole. Georgia’s S-CHIP program (PeachCare for Kids) contributes substantially to higher rates of public coverage. The numbers of Georgians with out health insurance are likely to increase substantially when the census reports its numbers for 2009. The recession significantly decreased employment and as a result employment-based health insurance. The growth in health care cost has been eroding employer sponsored coverage in Georgia. The likelihood of having employer sponsored coverage has fallen by over 5 percentage points since the year 2000 based on the 2 year moving average. It is likely all families experienced an increase in the probability they were uninsured in 2009, regardless of firm size.

The fragility of the employer sponsored health insurance market nation-wide and in Georgia is leading to a trend to greater coverage through the public system for some populations, most notably for children. In addition, the share of the population lacking coverage is generally increasing, but some populations appear to be most at risk:

 Those in families with incomes between 100 and 200 % of the federal poverty level,

 Those in families headed by workers at small firms, especially very small firms with fewer than 25 employees,

 Those in families headed by a part time or part year worker, and  Young adults ages 18 to 24.

These numbers do not reflect the impact of the recession. It is very likely that future census numbers will quantify the effects of increase unemployment of private coverage, Medicaid, and the uninsured.

Preface

The figures in this report are tabulations of the Annual Social and Economic Supplement to the Census Bureau’s Current Population Survey (CPS). In March of each year the Census Bureau surveys approximately 86,000 families across the nation, receiving information on almost 210,000 individuals. One section of the survey solicits information on the source of health insurance coverage for each individual in the household, and since 1995 we have reported the results of those questions for Georgia. There are a variety of sources of information regarding insurance coverage and each uses a different methodology to count the number of uninsured. The CPS is one of the most widely quoted sources of information about insurance coverage nationwide and permits comparisons of the sources of coverage between states. An additional advantage of reporting from the CPS is that the annual nature of the survey provides estimates of change in coverage over time. A change in survey methodology in 2000 has made direct comparisons with survey results from years prior to that time difficult. This report contains some analysis of the trends in coverage over the past 7 years and some discussion of the implications of those trends. Where trends are presented, we use a two year moving average. This is consistent with the methodology recommended by the Census Bureau to smooth some of the variation that arises from the size of the sample in each year’s survey.

In order to properly interpret the information that follows, please note the following:

 Respondents are asked about their health insurance coverage for the preceding year. It is possible for individuals to correctly state that they had several sources of coverage, so the percentages reported by insured category here may not total to 100.

 Based on a comparison with administrative records, the CPS consistently underreports the number of individuals enrolled in Medicaid.

 Most of the tables in this report exclude individuals aged 65 and over. These individuals are almost universally covered by Medicare.

Health Insurance Coverage in Georgia and the United States

Compared to national estimates, a significantly larger proportion of Georgians lack any source of coverage. Eighteen percent of all Georgians and over 19 percent of non-elderly Georgians lack coverage. Nationwide, 15 percent of Americans and 17 percent of non-elderly Americans lack coverage. On the other hand, levels of public coverage for the non-elderly in Georgia are slightly higher (20 versus 19.4 percent) than in the nation as a whole. Georgia’s S-CHIP program (PeachCare for Kids) contributes substantially to higher rates of public coverage.

Sources of Coverage by State

Georgia ranks 11in the share of its population lacking coverage and 5in the number of individuals who are uninsured. There is a wide variation in the likelihood of being uninsured across states. Texas has the highest share uninsured at 28 percent, while Massachusetts has the lowest share uninsured at 6 percent.

Factors Affecting Source of Health Insurance

One of the most important determinants of health insurance coverage is family income. Family income is expressed as a ratio to the Federal government’s poverty level in table 3. The poverty level is determined in part by the size of the family, so examining the sources of health insurance coverage by this ratio presents a clear picture of the relationship between a family’s disposable income and health insurance coverage. It is important to note, however, that this does not adjust for local differences in the cost of living.

There is a clear positive relationship between family income, as expressed as a percentage of the poverty level, and employment based health insurance. Only one in 6 individuals living below poverty has employer sponsored coverage, while 90 percent of those in families earning 4 times poverty or more have such insurance. Those individuals whose families have incomes just above or below the federal poverty level (FPL) are more likely to be uninsured than those with higher incomes. Just under half of Georgians living in families with incomes below the poverty level receive public coverage while 35 percent of them are uninsured.

Over the last 5 years Georgians with incomes below or near poverty are increasingly likely to be uninsured. The two year moving average shows an increase over 15 percentage points in the share of individuals lacking coverage among the near poor Georgians since 2000.

Employment Based Coverage – Work Status of Family Head

The primary source of health insurance for Georgians remains employment based plans. Over 90 percent of Georgians with private coverage obtain that insurance through an employment-based plan. Table 4 indicates that of those non-elderly Georgians who live in a family headed by a full-time, full year worker, 71 percent have employment based health insurance. That percentage falls to under 30 percent for those whose family heads experienced some unemployment during the year, and to just 16 percent for those families headed by a non-worker.

Families headed by non-workers are much more likely to have public health insurance coverage than other families in Georgia, accounting for 22 percent of all Georgians receiving public coverage, although they account for only 8 percent of non-elderly Georgians. The availability of public coverage for families headed by non-workers partially explains why they are slightly less likely to be uninsured than individuals in families headed by part year workers. While employment based health plans are the source of most of the private health insurance coverage purchased in Georgia, 68 percent of the individuals without health insurance live in families headed by a full-time, full year worker, and 88 percent of all uninsured individuals live in a family headed by someone with at least some attachment to the work force.

Employment Based Coverage – Firm Size of Family Head

One of the factors affecting the costs of health insurance is firm size. Smaller employers may face higher costs for providing health benefits than larger firms for three reasons. First, their small size means that they are less able to spread risks. Second, their small size makes it harder for them to self-insure and avoid costly state mandates and taxes. Finally, they face higher administrative costs since they are less likely to have staff devoted to health benefits. Table 5 describes the differences in the sources of health insurance for individuals depending on the size of the family head’s employer.

Just under half of non-elderly Georgians whose family head is employed by a firm with fewer than 25 employees has employment-based health benefits, while 75 percent of the individuals whose family’s highest earner are employed by firms with more than 100 employees have employment-based coverage. While Georgians whose family head is working at a firm with fewer than 25 employees make up 24 percent of the population, they comprise over 40 percent of those without coverage. Families whose head works for the smallest firms are more likely to be uninsured than Georgians in families whose head is a non-worker. About half of Georgia’s uninsured population lives in a family headed by a worker at a firm with fewer than 100 employees.

The growth in health care cost has been eroding employer sponsored coverage in Georgia. The likelihood of having employer sponsored coverage has fallen by over 5 percentage points based on the 2 year moving average. Over the two years ending in 2008 the decline has leveled off among workers. However it is likely all families experienced an increase in the probability they were uninsured in 2009, regardless of firm size.

Age and Gender

Other characteristics also play a role in an individual’s demand for health insurance coverage such as an individual’s age and gender. Younger adults are likely to be healthier, less likely to perceive a need for health insurance, and less likely to be eligible for coverage as a dependent of a worker. Women of childbearing years are more likely to use health care services than men of the same age, while older women use less health services than older men. Women and children are more likely to be eligible for Medicaid and PeachCare for Kids which have been successful at providing increased coverage to Georgians. Table 6 examines the source of Georgian’s health insurance by age and gender.

Children under 18 are the most likely among all Georgians to have public coverage and the least likely among all Georgians to be uninsured. There is little difference by gender among children. Among adults, men are more likely than women to lack coverage, while women are more likely than men to have public coverage. The chart below shows the trends in the probability of being uninsured by age group.

While over the last two years the change in coverage has been modest, among young adults the decline in private coverage since 2000 is significant and has resulted in an increase in the uninsured rate of over 8 percentage points. Moreover, those aged 45 to 65 were once the least likely to be uninsured, but over the last two years have been the only age group to continue to see an increase the percentage of uninsured.

Children in Georgia

While private coverage among children has declined in recent years, the expansions of public coverage have prevented a comparable increase in the number of uninsured children in Georgia. The type of coverage Georgia’s children have is highly related to their family’s income. Children living in poverty or in families with incomes just above poverty have high rates of public coverage and limited private coverage. About two thirds of Georgia’s uninsured children live in families with incomes at or below 200 percent of FPL. These children are generally eligible for either Medicaid or PeachCare.

Non-Group Private Coverage

The erosion of employment-based health insurance has led to increased attention to individual health insurance policies as an alternative source of private insurance. Many insurance plans coupled with health savings accounts have been developed and marketed over the last 5 years. Yet, despite the declines in employer sponsored coverage, individual purchased health coverage has not significantly changed over the last 8 years nationally, and the percentage of non-elderly Georgians with individually purchased health insurance has declined.

In spite of the weakness of the employment-based system it appears to have retained its advantages over purchasing health insurance as an individual.

Summary findings

The fragility of the employer sponsored health insurance market nation-wide and in Georgia is leading to a trend to greater coverage through the public system for some populations, most notably for children. In addition, the share of the population lacking coverage is generally increasing, but some populations appear to be most at risk:

 Those in families with incomes between 100 and 200 percent of the federal poverty level,

 Those in families headed by workers at small firms, especially very small firms with fewer than 25 employees,

 Those in families headed by a non-worker, part time worker, or part year worker, and

 Young adults ages 18 to 24.

These numbers do not reflect the impact of the recession. It is very likely that future census numbers will quantify the effects of increase unemployment of private coverage, Medicaid, and the uninsured".

This report does not reflect the impact of the government and commercial health insurance exchanges that are likely to grow in importance and possibly eventually replace traditional sources of insurance.

 

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