Census Overstates Uninsured by 15 Million

Published September 2, 2004

New Census data released on August 26 reveal 243.3 million Americans were covered by health insurance in 2003, up 1 million from the previous year’s figures. The number of people with health insurance has increased steadily for the past 15 years: The U.S. has never seen more people covered by insurance than it did in 2003.

At the same time, the Census Bureau reports 44.9 million Americans were without health insurance for some period of time during 2003. The uninsured, according to the Census Bureau, represented 15.6 percent of the U.S. population in 2003–no different from 1996.

15 Million Error

Census Bureau officials acknowledge their uninsured number is inflated, since Census data count as “uninsured” adults and children who are eligible for, but not enrolled in, Medicaid and the State Children’s Health Insurance Program (S-CHIP).

According to Census data, more than 15 million “uninsured” individuals reside in households with annual incomes of less than $25,000. Most meet the income test for Medicaid or S-CHIP eligibility, but they are not enrolled.

When a person who is eligible for Medicaid but not enrolled in the program enters the health care system–through a hospital emergency room or outpatient clinic, for example–that person is automatically enrolled in the Medicaid plan. By definition, then, many–perhaps most–of these 15 million “uninsured” persons are folks who have not sought health care. Counting this population as “uninsured” gravely distorts the accuracy of the data, as these are individuals who can become insured at any time.

Frankly, there is no such thing as an “uninsured” individual eligible for Medicaid. For all intents and purposes, these Medicaid-eligibles should be considered insured persons who simply have not yet “activated” their insurance by seeking health care.

While employed as an analyst with the Center for Advanced Social Research at the University of Missouri-Columbia, I conducted research that found many Medicaid recipients say they don’t have insurance coverage. When interviewed by a trained researcher and asked if the government pays for their medical care, they say yes. When asked if they remember the name of the government program, they cite Medicaid.

But many interviewees said they don’t consider government-run health care to be insurance. This is not surprising, given that Medicaid recipients pay no premiums and often pay no deductibles or copayments for services they receive. So the Census Bureau data on the uninsured are skewed even more, since they include persons enrolled in Medicaid who report themselves to be uninsured.

Further skewing the Census Bureau’s uninsured statistic is a sizeable increase in the immigrant population. Roughly 9 million documented and undocumented aliens are generally included in Census estimates. Many immigrants hesitate to participate in a government program of any kind for fear of establishing a paper trail for immigration and national security authorities. Cultural mores, folkways, and language barriers also conspire to keep these people uninsured.

Sending the Wrong Message

The Census Bureau says its data collection methodology “is not designed primarily to collect health insurance data.” Yet it releases its new data with great fanfare, encouraging the data’s misuse by politicians and other proponents of government interference in the health care marketplace.

The Census Bureau’s inflated uninsured numbers send the wrong message to politicians. One of presidential candidate John Kerry’s health care proposals singles out the Medicaid population for special legislation. His campaign literature notes there are “millions of uninsured children who are eligible for health care coverage under Medicaid or S-CHIP but are not enrolled.” Spending millions of dollars to enroll these essentially insured Americans would make no difference in their access to health care, but would surely waste scarce tax dollars.

Until the Census Bureau significantly revises its data collection and reporting methods, policymakers and the general public must not rely on these figures for making public policy. These data are known and acknowledged to be flawed; legislators and special interest advocates have no excuse for relying on these numbers when crafting public policy. This issue is too important for millions of dollars to be wasted on solutions built on wrong information.

Conrad F. Meier ([email protected]) is managing editor of Health Care News, a monthly publication of The Heartland Institute.