February 9, 1999

Employed But Not Insured: 
A State-by-State Analysis of the Number of Low-Income
Working Parents Who Lack Health Insurance
by Jocelyn Guyer and Cindy Mann

Table of Contents

Press Release
I.  Overview
II.  Data on Uninsured Parents
III.  State Medicaid Coverage for Parents
IV.  States Have a New Opportunity to Expand Medicaid to Cover More Low-Income Working Parents
V.  Conclusion
VIAppendices

Click here to view PDF version of this report.

I. Overview

States now offer health care coverage to uninsured children in low-income working families through Medicaid and, in some states, through newly established child health programs. The parents who head these families, however, remain at high risk of being uninsured. More than 5.4 million low-income working parents were uninsured in 1997 according to the U.S. Census Bureau data analyzed in this report.(1)

Figure 1Unless action is taken, the number of uninsured working parents is likely to grow. More and more low-income parents are joining the workforce at the same time that employer-based coverage for low-wage workers is declining. Although states generally provide Medicaid to parents who are receiving welfare, including parents combining welfare and work, few states cover low-income working parents who have no current or recent attachment to the welfare system. As a result, most parents who are supporting their families through part-time or full-time work are ineligible for Medicaid even if they work at jobs that pay very low wages and that do not offer health care coverage.(2)

While the Medicaid earnings thresholds for working parents vary widely among the states, this is not a report about "good" versus "bad" states. For example, all of the states listed in Figure 2 have recently expanded coverage for low-income children — some quite substantially — and many are looking for ways to also cover their parents. Few states provide Medicaid more broadly to low-income working parents because, until recently, federal Medicaid law generally limited coverage to parents who were receiving welfare or who recently had left welfare.(4)

Parents Already Enrolled in Medicaid May Be Able to Retain Medicaid Coverage at Somewhat Higher Income Levels

The earnings thresholds noted here apply to low-income working parents in three-person families who are applying for Medicaid. As discussed later in this report, parents may be able to retain Medicaid at somewhat higher income levels if they are enrolled in Medicaid under these more restrictive thresholds and then increase their earnings. For example, parents who have been on welfare and Medicaid and then increase their earnings to a level that would make them ineligible for Medicaid if they were first applying for coverage can retain Medicaid coverage for a limited period of time under "Transitional Medical Assistance" rules.

This restriction no longer operates under federal law. As a result of a provision in the 1996 federal welfare law that delinked Medicaid eligibility from eligibility for welfare, states have a new option to expand coverage more broadly to low-income working parents. Because the option to expand is through Medicaid, the federal government will provide states with federal Medicaid matching payments that will finance anywhere from 50 percent to 77 percent of the cost of such an expansion (with the exact portion depending on each state's federal Medicaid matching rate). Rhode Island and the District of Columbia already have used this option to expand coverage to more low-income working parents along with their children, and Missouri and Wisconsin recently adopted parent coverage expansions through federal Medicaid waivers. Every state can now take advantage of the new federal option — and federal Medicaid matching payments — to provide this critical support to low-income working families.

 

II. Data on Uninsured Parents

In 1997, according to Census Bureau data, there were 15.8 million working parents whose family income was below 200 percent of the poverty level — $27,300 a year for a family of three. More than a third of these parents — 5.4 million parents — were uninsured throughout all of 1997.

Among the 4.9 million working parents with income below 100 percent of the poverty level in 1997, about a quarter were covered through Medicaid and another quarter were insured through employer-sponsored or "other" coverage (including other sources of private coverage and the military's health insurance program). The single largest group of working poor parents — 46 percent — were uninsured throughout all of 1997.

Figure 3Tables 1 and 2 provide state-specific estimates of the number and percentage of working parents who were uninsured in each state during the mid-1990s. Table 1 shows estimates of the uninsured rate among working parents with income below 200 percent of the poverty level, while Table 2 shows such estimates for working parents with income below 100 percent of the poverty level. Because the state-level Census data are based on small samples, particularly for the less populated states, these data generally should not be used to compare uninsured rates across states. The data do, however, give a sense of the magnitude of the problem in each state.(5)

Low-income working parents are at high risk of being uninsured because, as described in more detail below, they have limited access to publicly-funded coverage and, at the same time, they often are not offered coverage through their employers. In 1996, only 43 percent of workers making $7 or less per hour were offered health insurance coverage by their employers.(6) In contrast, among workers making more than $15 an hour, 93 percent were offered coverage. Moreover, not all low-wage workers who are offered coverage can afford to purchase that coverage, particularly as more of the cost of coverage has been shifted on to employees in recent years. Between 1988 and 1996, the cost to employees of purchasing coverage for themselves increased at an average annual rate of 18.3 percent and the cost of purchasing family coverage over this same period grew at an average annual rate of 11.9 percent.(7)

Table 1
Working Parents in Families with Income Below 200 Percent of Poverty
Lacking Health Insurance, Mid-1990s
Number of working parents below 200% of poverty Number without health insurance Percent without health insurance 90 Percent Confidence Interval*
Low High
United States 16,060,000 5,410,000 33.7% 32.3% 35.1%
Alabama 274,000 78,000 28.6% 18.4% 38.8%
Alaska 34,000 12,000 34.5% 22.6% 46.3%
Arizona 412,000 187,000 45.5% 36.6% 54.4%
Arkansas 248,000 86,000 34.7% 26.2% 43.3%
California 2,226,000 901,000 40.5% 36.1% 44.8%
Colorado 181,000 56,000 31.1% 18.8% 43.4%
Connecticut 120,000 27,000 22.1% 8.2% 36.0%
Delaware 35,000 12,000 33.0% 19.2% 46.7%
District of Columbia 20,000 5,000 27.4% 12.9% 41.9%
Florida 859,000 328,000 38.1% 32.1% 44.2%
Georgia 494,000 216,000 43.7% 33.9% 53.5%
Hawaii 73,000 6,000 8.0% 1.1% 14.9%
Idaho 101,000 37,000 37.0% 27.9% 46.1%
Illinois 609,000 142,000 23.4% 17.1% 29.6%
Indiana 293,000 70,000 24.0% 13.4% 34.6%
Iowa 190,000 44,000 23.1% 13.6% 32.6%
Kansas 167,000 42,000 25.4% 15.4% 35.5%
Kentucky 267,000 105,000 39.4% 28.7% 50.1%
Louisiana 321,000 115,000 35.9% 26.3% 45.6%
Maine 73,000 26,000 35.9% 23.4% 48.4%
Maryland 207,000 64,000 30.8% 16.9% 44.6%
Massachusetts 222,000 58,000 26.1% 16.1% 36.1%
Michigan 432,000 111,000 25.7% 18.2% 33.1%
Minnesota 234,000 51,000 21.6% 11.2% 32.0%
Mississippi 255,000 78,000 30.8% 22.2% 39.3%
Missouri 308,000 96,000 31.3% 19.8% 42.7%
Montana 78,000 19,000 24.2% 16.4% 32.1%
Nebraska 102,000 20,000 19.5% 10.0% 29.1%
Nevada 88,000 30,000 33.9% 21.6% 46.2%
New Hampshire 49,000 14,000 29.0% 14.2% 43.7%
New Jersey 303,000 109,000 36.0% 26.8% 45.3%
New Mexico 162,000 78,000 48.1% 39.0% 57.2%
New York 960,000 333,000 34.7% 29.3% 40.0%
North Carolina 415,000 137,000 33.1% 24.8% 41.4%
North Dakota 39,000 8,000 21.1% 11.4% 30.7%
Ohio 569,000 130,000 22.9% 16.3% 29.5%
Oklahoma 268,000 85,000 31.7% 22.8% 40.6%
Oregon 194,000 47,000 24.1% 13.6% 34.7%
Pennsylvania 549,000 128,000 23.4% 16.8% 29.9%
Rhode Island 33,000 8,000 23.1% 9.1% 37.2%
South Carolina 254,000 87,000 34.2% 22.9% 45.5%
South Dakota 43,000 8,000 18.8% 9.7% 27.9%
Tennessee 415,000 106,000 25.5% 16.3% 34.8%
Texas 1,639,000 798,000 48.7% 43.6% 53.7%
Utah 163,000 33,000 20.1% 12.4% 27.7%
Vermont 39,000 9,000 23.0% 13.3% 32.8%
Virginia 356,000 99,000 27.7% 17.1% 38.3%
Washington 262,000 65,000 24.8% 13.0% 36.7%
West Virginia 135,000 44,000 32.6% 23.4% 41.9%
Wisconsin 247,000 41,000 16.7% 7.0% 26.4%
Wyoming 41,000 14,000 33.7% 24.3% 43.1%
*There is a 90 percent chance that the actual uninsured rate among working parents below 200 percent of the poverty level, if it were determined from a survey of all households, would fall in the range defined by the low-end and high-end estimates of the 90 percent confidence interval. The confidence interval is higher in states with smaller sample sizes.
Source: CBPP tabulations of Census Bureau's March Current Population Survey data from 1996-98. Data are for 1995 - 1997. Based on parents living with children between the ages of 18 and 65 in families with income below 200 percent of poverty and in which the parents worked a combined total of more than 13 weeks a year. Due to rounding error, the uninsured rate presented in column 4 may not equal the quotient of columns 2 and 3.

Table 2
Working Parents in Poor Families Lacking Health Insurance, Mid-1990s
Number of working poor parents Number without health insurance Percent without health insurance 90 Percent Confidence Interval
Low High*
United States 4,818,000 2,222,000 46.1% 43.5% 48.8%
Alabama 81,000 32,000 39.5% 18.9% 60.2%
Alaska 8,000 3,000 36.1% 12.2% 60.0%
Arizona 148,000 93,000 62.6% 48.2% 77.1%
Arkansas 64,000 39,000 61.1% 43.9% 78.2%
California 794,000 379,000 47.8% 40.4% 55.2%
Colorado 37,000 16,000 42.4% 12.7% 72.0%
Connecticut 35,000 13,000 36.4% 4.0% 68.7%
Delaware** 7,000 3,000 45.1% 12.6% 77.6%
District of Columbia** 6,000 2,000 38.6% 10.3% 66.9%
Florida 266,000 140,000 52.6% 41.4% 63.8%
Georgia 134,000 72,000 54.0% 35.1% 72.9%
Hawaii 19,000 3,000 15.6% 0.0% 34.1%
Idaho 35,000 19,000 53.0% 37.1% 68.9%
Illinois 178,000 57,000 31.8% 19.2% 44.4%
Indiana 73,000 35,000 48.2% 22.7% 73.6%
Iowa 56,000 18,000 32.0% 12.9% 51.2%
Kansas 40,000 16,000 41.0% 19.3% 62.7%
Kentucky 101,000 54,000 53.9% 36.3% 71.4%
Louisiana 95,000 52,000 54.4% 36.4% 72.3%
Maine 18,000 11,000 59.9% 34.2% 85.7%
Maryland 51,000 20,000 38.6% 9.3% 68.0%
Massachusetts 59,000 18,000 30.6% 10.2% 50.9%
Michigan 124,000 42,000 33.7% 18.6% 48.8%
Minnesota 47,000 14,000 30.0% 3.7% 56.4%
Mississippi 87,000 36,000 41.7% 25.6% 57.7%
Missouri 83,000 32,000 38.4% 14.8% 62.1%
Montana 25,000 9,000 35.4% 20.2% 50.6%
Nebraska 22,000 5,000 20.6% 0.0% 41.7%
Nevada 25,000 14,000 55.7% 29.3% 82.2%
New Hampshire** 10,000 5,000 47.6% 9.3% 86.0%
New Jersey 63,000 30,000 48.4% 26.6% 70.2%
New Mexico 63,000 38,000 60.7% 46.2% 75.1%
New York 300,000 118,000 39.4% 29.5% 49.3%
North Carolina 120,000 59,000 49.3% 32.8% 65.7%
North Dakota 13,000 4,000 28.2% 9.4% 47.0%
Ohio 159,000 55,000 34.7% 20.7% 48.6%
Oklahoma 88,000 40,000 45.3% 28.8% 61.7%
Oregon 58,000 20,000 34.3% 13.3% 55.3%
Pennsylvania 136,000 53,000 38.9% 23.7% 54.1%
Rhode Island** 9,000 5,000 54.2% 23.8% 84.6%
South Carolina 69,000 28,000 41.2% 18.4% 63.9%
South Dakota 13,000 4,000 28.4% 8.5% 48.3%
Tennessee 110,000 36,000 32.8% 13.9% 51.8%
Texas 573,000 362,000 63.1% 54.9% 71.3%
Utah 31,000 13,000 41.7% 20.8% 62.6%
Vermont 10,000 3,000 32.1% 10.8% 53.5%
Virginia 95,000 36,000 38.2% 15.6% 60.8%
Washington 68,000 24,000 35.2% 10.9% 59.4%
West Virginia 37,000 22,000 58.8% 40.1% 77.6%
Wisconsin 62,000 15,000 24.1% 2.0% 46.1%
Wyoming 11,000 5,000 48.6% 29.4% 67.8%

*There is a 90 percent chance that the actual uninsured rate among working parents below 100 percent of the poverty level, if it were determined from a survey of all households, would fall in the range defined by the low-end and high-end estimates of the 90 percent confidence interval. The confidence interval is higher in states with smaller sample sizes.

**Figures are based on a sample size that falls below the minimum recommended by the Census Bureau for reliable estimates.
Source: CBPP tabulations of Census Bureau's March Current Population Survey data from 1996-98. Data are for 1995 - 1997. Based on parents between the ages of 18 and 65 living with children in families with income below 100 percent of poverty and in which the parents worked a combined total of more than 13 weeks a year. Due to rounding error, the uninsured rate presented in column 4 may not equal the quotient of columns 2 and 3.

End Notes:

1. The national estimates of the number and percentage of uninsured working parents in this report are based on calculations done by the Center on Budget and Policy Priorities using data from the U.S. Census Bureau's March 1998 Current Population Survey. In this report, "low-income" is defined as having income below 200 percent of the federal poverty level ($27,300 a year for a family of three). The term "working parent" includes household heads and their spouses between the ages of 18 and 65 who lived with children and who worked a combined total of more than 13 weeks during the year. The data show that poor parents who work more than 13 weeks during the year work an average of 28.4 hours during each work week.

2. In general, this report considers the basic Medicaid income eligibility rules that apply to low-income families with children in each state. Pregnant women, disabled parents, and parents who are themselves under the age of 19 may be eligible for Medicaid at higher income levels than the levels presented in this report. A small number of states also cover parents through "medically needy" eligibility categories at somewhat higher income levels, although in practice states with medically needs categories generally use them primarily to cover people with high medical bills. Appendix B provides additional details on the Medicaid eligibility categories for families with children and describes the methodology for identifing the state-specific earnings thresholds for working parents included in this report.

3. Maine also extends Medicaid to single parents with earnings up to 100 percent of the poverty level, but it only covers parents in two-parent families if one of the parents is incapacitated or the principal wage earner works fewer than 100 hours a month. As noted later in this report, Missouri and Wisconsin have adopted but not yet implemented Medicaid expansions for parents.

4. The one exception is that states have had the option to provide coverage to families with children with income somewhat above welfare income eligibility thresholds without regard to whether they were eligible for welfare under what is known as the "medically needy" eligibility category. In most states, however, this category is used primarily to offer partial coverage to families that have high medical bills relative to their incomes and that "spend down" to the medically needy income eligibility levels. States also have had the opportunity to vary from federal law by seeking a waiver from the federal government. Delaware, Hawaii, Massachusetts, Minnesota, Oregon and Vermont have expanded coverage for parents through waivers.

5. State estimates of the number and percentage of uninsured working parents are based on calculations done by the Center on Budget and Policy Priorities using U.S. Census Bureau data from the March 1998, March 1997 and March 1996 Current Population Surveys. In developing the estimates in Tables 1 and 2, the Center used a standard strategy employed by researchers and others of pooling CPS data for a three-year period to increase the accuracy of state-specific estimates of uninsured rates. A three-year average of CPS data is used in the new child health insurance program (CHIP) to allocate the federal child health block grant funds among states.

6. Philip F. Cooper and Barbara Steinberg Schone, More Offers, Fewer Takers for Employment-Based Health Insurance: 1987 and 1996, Health Affairs, 16(6) (1997), pp. 142-149. The percentage of workers with wages at or below $7 per hour who have "access" to employer-based coverage is somewhat higher (55 percent in 1996) because some low-wage workers are offered coverage through the employer of a family member.

7. Ellen O'Brien and Judith Feder, How Well Does the Employment-Based Health Insurance System Work for Low-Income Families?, Kaiser Commission on Medicaid and the Uninsured, September 1998.

Additional health policy reports.

Background Information | Board of Directors
Publication Library | Center Staff | Search this site
Job Opportunities | Internship Information | Top Level
International Project |

To join the Center's e-mail notification list, ask questions,
or send comments, write
bazie@cbpp.org
Center on Budget and Policy Priorities
820 First Street, NE, Suite 510
Washington, DC  20002
Ph: (202) 408-1080
Fax: (202) 408-1056