February 26, 1999

An Increasing Number of Californians, Especially the Working Poor, Have No Health Insurance Coverage

By Janet Gilmore

Berkeley — Despite a booming economy, the number of Californians without health insurance coverage grew at a rate of 50,000 per month in 1997, resulting in more than seven million Californians without medical insurance, according to a report released today (Jan. 15).

This increase in the uninsured occurred in an era when many Californians are dropping from the rolls of Medi-Cal, and the cost of purchasing coverage outside of an employer-paid plan continues to increase.

Such findings are included in "The State of Health Insurance in California, 1998," an annual overview and analysis of the industry issued by the Health Insurance Policy Program, a joint project of the Center for Health and Public Policy Studies at the University of California, Berkeley, and the UCLA Center for Health Policy Research.

"For many people there's nowhere to turn," said Helen Schauffler, director of the UC Berkeley program and a principal author of the report. "Their employer does not offer benefits, they do not qualify for a government program and they cannot afford to purchase private health insurance. California's new governor and legislature should act immediately to address this critical public health challenge."

The report, which examines many aspects of health care coverage for Californians under age 65, reveals that Medi-Cal coverage for the poor dropped from 42 percent in 1996 to 32 percent in 1997. This occurred while the proportion of the state's population living in poverty increased nearly five percent.

The drop in insurance coverage for the poor is likely linked to welfare reform measures that discouraged legal immigrants from applying for Medi-Cal and moved many residents off the welfare rolls, according to the report's authors.

At the same time, researchers suspect that many residents were left uninsured because they gained jobs with small firms that could not afford to provide health insurance coverage for employees.

Without employer-sponsored plans, relatively few Californians can afford to purchase their own individuals policies. In fact, only 4.8 percent of the state's residents did so in 1997.

"California's health insurance coverage continues to erode with troubling consequences for the financial well being, access to health services and health status of the state's residents," said E. Richard Brown, director of the UCLA program and a principal author of the report.

The uninsured have the least access to health promotion programs and to preventive care services that have proven to be effective and cost-effective in reducing disease and preventing premature death.

A striking example of this problem is that only 34 percent of uninsured women over age 50 received mam-mograms in the last two years and only 39 percent received a clinical breast exam in the past year.

In addition, uninsured Californians were less likely to seek medical services on their own. Because of the financial costs involved, nearly one-third of uninsured adults did not seek medical services when they need it. Among insured residents, only seven percent did not seek medical attention when needed. This lack of access was highest among low-income working families, Latinos and African-Americans.

"These findings are very troubling because delaying treatment for health problems can produce much more serious and expensive health problems later, or even death," said UC Berkeley's Schauffler.

California's Medi-Cal and Healthy Families programs have the potential to cover more than one million of the state's 1.85 million uninsured children. But serious deficiencies exist within the programs' policies and structure and these deficiencies are limiting enrollment, according to UCLA's E. Richard Brown.

"Tens of thousands of currently eligible children are being kept out of Medi-Cal and Healthy Families by an overly complex and burdensome application and inadequate outreach efforts," said Brown. "In addition, many immigrant parents fear that their current immigration status and future opportunities for citizenship will be put at risk if their eligible children —even U.S. citizen children— use these programs."

The report also found that:

Health Maintenance Organizations or HMOs are increasingly dropping their health promotion programs addressing substance abuse, HIV/AIDS prevention and sexually transmitted diseases.

Latinos generally fared worse than any other ethnic group in terms of access to health care: 38 percent of this population is uninsured. In addition, only 42 percent of Latinos have job-based insurance, compared to 69 percent of their non-Latino white counterparts.

African-Americans experienced a drop in Medi-Cal coverage, but it was offset by an increase in health care coverage provided through employers.

Asian-Americans experience an increase in the uninsured. In 1997, 24 percent of this group was uninsured, compared to 19 percent a year earlier.

Roughly half —49 percent— of noncitizens were uninsured in 1997, compared to 44 percent in 1995.

Among Californians below the poverty level —a family of three making less than $13,500 a year— 43 percent were uninsured, compared to 38 percent a year earlier. This was the only income group that experienced an increase in its uninsured rate.

Among Californians who earn $40,000 a year, only 6 percent were uninsured, compared to 42 percent of those who earn $12,000 to $19,999 a year and 59 percent of those who earn less than $12,000.

"We've divided our population," said UC Berkeley's Schauffler. "We've decided that some groups are deserving and some groups are not based on something that has nothing to do with their need. It doesn't make sense.

"As a society we have to decide if we want to keep picking off'deserving groups' or if we want to design a comprehensive solution to cover all people. These are hard-working people and we're treating them like second-class citizens."

The report recommends that the new governor and legislature expand programs to cover more of California's uninsured children and adults, improve California's managed-care system, reform Medi-Cal and provide programs that promote the health of all Californians.

The authors call for a statewide task force to develop a plan to assure the availability of affordable health insurance for all state residents. The task force's recommendations would be due to the new governor and legislature by January 1, 2000.

E. Richard Brown, of UCLA, contends, "This requires a public solution. The private sector is not going to do it."

"The State of Health Insurance in California, 1998," is funded by a grant from The California Wellness Foundation as part of its Work and Health Initiative. This is the third in a series of reports that provides comparisons to previous years' data and national data.

Gary L. Yates, president and chief executive officer of The California Wellness Foundation, stressed the importance of this year's report.

"This report makes it very clear that the problem of access to health insurance is getting worse, with profound implications for the health of the state's residents. Action is needed now. We hope this report will provide policy makers with the information they need to craft effective solutions to one of the California's most critical public policy challenges."

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