Covering the Working Uninsured

The latest government statistics estimate that 47 million Americans do not have health insurance coverage. According to the Kaiser Family Foundation, 54 percent of those Americans are in working families. These are the working uninsured and they are often in part-time and hourly jobs where they do not have access to a major medical plan through their employer or spouse.

Many companies are turning to limited-benefit health plans to provide affordable health insurance to these working uninsured. Limited-benefit plans are typically 100 percent employee paid and can be offered at no cost to the employer. Premiums for such a plan often start at one or two hours' pay per week, making access to health insurance a reality for part-time employee making $8 to $12 per hour. The characteristics of risk assessment for the working uninsured are completely different from the population that has access to traditional major medical coverage. For underwriters it is important to identify these risks for the best classification possible.

A Matter of Priority

The health insurance industry often makes an incorrect assumption that everyone knows the importance of healthy living and the consequences of poor lifestyle choices. This may be true for those with traditional major coverage who have had access to the health-care system. However, for the working uninsured, their ability to access health care even if their employer offers a limited-benefit plan often ends up being a matter of priority.

CIGNA Market Research completed in 2008 found that 82 percent of the working uninsured felt that quality health insurance was too expensive. More than half of the respondents who felt this way had a household income of $25,000 or below. This same study found that 71 percent of the working uninsured often skipped routine doctor visits because of the cost. This situation obviously leads to an increase of risk classification, even though 61 percent of the population admits that they frequently worry that an accident or illness could cause major financial trouble.

The priority to enroll in health insurance is not as high for the working uninsured. It is key to remember that unlike salaried or more highly compensated employees with traditional major medical coverage, many of the working uninsured are in industries such as restaurant, retail and hospitality and are only making $8 to $12 per hour. This income range means that immediate financial obligations are a higher priority than “optional” expenses like health insurance. CIGNA research found that health insurance is eighth on the list of financial priorities among the working uninsured, ranking behind rent/mortgage, groceries, utilities, gas, car insurance and vehicle maintenance.

This information tell underwriters that the financial priorities of the working uninsured –putting health insurance far down the list — can impact their ability to receive regular health care that could help them take the steps to lead a healthy life and avoid catastrophic illnesses in the future.

A Chronic Characteristic

The working uninsured population is often painted as young, active and indifferent to medical care. However, a recent study published in the Annals of Internal Medicine found that the U.S. working-age population who suffer from chronic health conditions do not have insurance coverage and have less access to health care compared to their insured counterparts.

Using data from the National Health and Nutritional Examination Survey, the study estimated that 11.4 million working-age uninsured have been diagnosed with a chronic disease. These illnesses include asthma, previous cancer, cardiovascular disease, diabetes, hypertension and obstructive lung disease. The study did not cover those with multiple chronic illnesses, but did find that those who were chronically ill but not insured were more than three times more likely not to have consulted a health professional — 22.6 percent against 6.2 percent. They were also more than four times more likely not to have had a regular site for medical care in the past 12 months, compared to those with insurance coverage — 26.1 percent against 6.2 percent. Finally, they were also much more likely to use an emergency room as a standard place of medical care — 7.1 percent against 1.1 percent.

With these findings it is fair to conclude that many of the working uninsured may already suffer from a chronic condition that has not been diagnosed.

Learning the Lifestyle

A complete comprehension of the working uninsured's lifestyle is vital for the most accurate risk classification rating.

Due to occupations in the service and hospitality industries, the working uninsureds often endure non-traditional work schedules during the evenings and weekends. Studies have shown that working these shifts leads to poor diet, obesity issues and diabetes. A 2009 study by Harvard/Brigham and Women's Hospital researcher Frank A.J.L. Scheer has found that the risky behaviors of working against the natural body clock, eating meals immediately before bed, and lack of time to prepare meals contribute directly to these health issues.

This is added to the fact that the working uninsureds often do not have access to the disposable income that covers the high cost of eating healthy. Fresh fruits and vegetables, whole grains, lean meats, fresh fish and low-fat dairy products are often replaced by fast-food staples such as hamburgers, tacos, fried foods and milkshakes. These food items are cheaper on people's wallets in the short-term but make them long-term underwriting risks.

The preventive services offered by a quality limited-benefit health plan lowers risk once the working uninsured become regular health-care customers. However, during the risk assessment it is important to remember the variety of health issues that may have not been addressed with preventive care. Tobacco cessation, information about alcohol use, chiropractic issues, and hearing and vision exams all probably have been neglected — meaning more risk. Female members of the working uninsured are risks due to a lack of annual mammogram and pap smear exams. And because of regular financial concerns, all members of the working uninsured are subject to poorly managed stress.

The number of employees at risk of becoming part of the working uninsured will continue to expand as businesses align the employment status of their employees to new economic realities. As coverage options for the working uninsured receive more attention from the public and private sectors, all risk factors must be taken into consideration in order to create an accurate plan.

Curt A. Wieden is vice president of product and marketing for CIGNA Voluntary, headquartered in Phoenix. He may be reached at 800-258-9260 or Curt.Wieden@cignavoluntary.com, www.cignavoluntary.com.