Calif. Estimates of Uninsured Too High: Study

Published April 1, 2006

It is often estimated that roughly 20 percent of all Californians–about 7 million people–lacked health insurance at some point in 2004. A report from the Pacific Research Institute, however, contends a more accurate estimate is closer to 9 percent of Californians, just over 3 million residents.

In his January 2006 report, “California’s Uninsured: Crisis, Conundrum, or Chronic Condition?” John R. Graham, director of health care studies for the institute, examines how existing estimates were produced and explains why those estimates are likely to be misleading.

“The number [of around 19-20 percent] that is usually cited in the public discourse by the media and politicians is a great overstatement of the reality of the situation,” said Graham in an interview for this article.

Number Widely Used

The 20 percent estimate has been widely used by policymakers–such as state Sen. Sheila Kuehl (D-Santa Monica) and U.S. Senator Dianne Feinstein (D)–as well as advocacy groups, including the California HealthCare Foundation, Healthcare Access for All-California, and the California Labor Federation.

The estimate is based on the Current Population Survey (CPS), conducted by the U.S. Census Bureau. The CPS interviews a large number of people from across the United States, and those interviews are used to produce national and state-by-state estimates of health insurance coverage. The CPS asks whether an individual has been without health care at any time during the past 12 months. According to the CPS, just over 18 percent of Californians are uninsured.

Better Source Available

A better source of data, Graham contends, is the Survey of Income and Program Participation (SIPP), a monthly survey of U.S. citizens also conducted by the U.S. Census Bureau.

While the CPS found 14.6 percent of Americans were without health insurance at some point in 2001, the SIPP data indicate only 6.8 percent of Americans were without health insurance at some point that year.

“Someone may not remember well what occurred during the [entire] past year,” said Graham. “The SIPP survey only asks about the past month” and extrapolates the data to get yearly numbers.

Graham’s report cites Census Bureau researcher Shailesh Bhandari on the accuracy of the SIPP data as saying, “The monthly information makes the SIPP closer to the truth.”

Paul Fronstin, Ph.D., senior research associate at the Washington, D.C.-based Employee Benefit Research Institute (EBRI), is not sure that’s true. He noted, “The Census Bureau and others think that SIPP is better because there is less of a recall bias. [But] it has never been proven that there is less recall bias.” He continued, “With that said, I won’t take a side for the SIPP or CPS because I don’t think we’ve done enough research to draw such a conclusion.”

Numbers Differ Greatly

In his study, Graham looks at the national data on percentages of insured in different categories of age, income, and race from the SIPP data, and applies those numbers to California to get a total for uninsured people in the state. (The SIPP data do not provide state-by-state estimates for those who lack health insurance.) By applying the national ratios to California, Graham finds the percent of uninsured in the state is 8.6 percent, less than half the CPS-based estimate of 18.4 percent.

Graham also compares his estimates of the number of uninsured in different groups with estimates in a study produced by the California HealthCare Foundation (CHCF) using data from the CPS. Graham’s estimates of the number of uninsured are usually about half as high as those in the CHCF.

Kuehl, who typically cites 20 percent as the share of California’s population that is uninsured, said, “I try to find a group that is gathering data without an ax to grind.” She cites the CHCF and the UCLA Center for Health Policy Research as reliable research organizations. “The CHCF looks only at the uninsured; it doesn’t look at the underinsured such as individuals who have a high deductible and couldn’t possibly pay it.

“The problem in California is that every day employers drop employees from company health care plans, and so the percentage of uninsured could be larger today,” Kuehl said. “The real number is a moving target.”

“Either figure indicates that there’s a crisis in California,” Kuehl concluded.

Illegals Increase Problem

Graham acknowledges the percent of California’s population that is uninsured is higher than in many other states. He attributes this in part to the large number of illegal immigrants in the state. Illegal immigrants, who are included in both the CPS and SIPP surveys, contribute significantly to the number of uninsured. Among ethnic groups, a greater share of the Hispanic population in California is uninsured than is true of other ethnic groups. The SIPP data suggest about 15 percent of Hispanics are uninsured, and the CPS data puts the figure at 32 percent.

Kuehl disagreed with Graham on this point. “I don’t believe that immigration is the biggest issue per se,” she said. “The real issue is the number of low-paying or minimum-wage jobs [in California] that don’t provide health care insurance.”

Graham doesn’t believe the state’s health care system is beyond repair. “There’s not a systematic failure of health care, but there’s definitely reform to be done,” he said.

One relatively simple solution, said Graham, would be “to make Health Savings Accounts tax-deductible.” He noted the federal government and several states already do so. Tax deductibility, Graham explained, would make it slightly less expensive for individuals to purchase health insurance and health care services.

Michael Coulter ([email protected]) teaches political science at Grove City College in Grove City, Pennsylvania.

For more information …

John Graham’s January 2006 report, “California’s Uninsured: Crisis, Conundrum or Chronic Condition?” is available online at

The California HealthCare Foundation has a Web site at