By Thomas D. Rowley

The author is an independent researcher, writer, and editor based in Arlington, Virginia.
This study was funded under a cooperative agreement with the Federal Office of Rural Health Policy, Health Resources and Services Administration, DHHS (# U1CRH00025).

The latest numbers show an increase of 2.5 million in the number of Americans without health insurance, some 14.6 percent (41.2 million) were without coverage during the entire year in 2001. (September 2002, Current Population Survey) Consequently, the lack of insurance-or uninsurance--remains an issue of great concern to the general public, policymakers, and researchers. Of particular interest to parties focused on rural issues are the rural dimensions of uninsurance: how it differs from urban uninsurance, how it differs across rural America, and how it affects rural healthcare providers. This report highlights findings from 11 recent studies on rural uninsurance to help answer such questions.

Importance of Insurance

Individuals know well the importance of health insurance: without it, health care is often simply unaffordable. Health insurance status-whether one has it or not-can mean the difference in getting medical care and going without.

The health insurance status of the U.S. population, especially the size and composition of the uninsured, concerns the general public and policymakers for several reasons.

· Since health insurance is critical in ensuring that people get timely access to medical care, it is critical to the health and well-being of the population.

· The health insurance status of the population has great bearing on several equity and efficiency dimensions-the appropriate amount of public subsidization of health care, the impact of insurance on the efficient use of care, and the way in which insurance affects the distribution of care across the population.

· Timely and accurate estimates of the population's health insurance status are essential in crafting and evaluating public policies aimed at expanding insurance coverage. (Rhoades et al.)

The Rural Difference

Whether urban or rural, the uninsured are predominantly low-income, working Americans and their families, and most have no insurance because they do not obtain coverage from their workplace-either because it is not offered or it is not affordable. (Rowland).

Despite these similarities, significant differences exist between the rural and urban uninsured. One difference that remains a bit unclear, however, is that of the rural rate of uninsurance versus the urban rate. Which exceeds the other and by how much depends upon the type, time, and design of the surveys yielding those estimates-each having its own set of strengths and weaknesses. (Fronstin)

Using the March 1999 Current Population Survey (which measured health insurance status in 1998), Pol found that the urban rate was higher than the rural (16.4 percent vs. 15.7 percent). Using 1998 case study data and looking at states rather than the nation, Ormond, Wallin, and Goldenson found that the rural rate exceeded the urban in all five of their study states. The 2001 Current Population Survey (the most recent data available for rural areas) shows that nationally, the urban rate is still higher than the rural (14.2 percent vs. 13.1 percent).

Regardless of the exact number of rural uninsured and whether it exceeds the urban number, other important differences between the rural and urban uninsured on several dimensions appear to be clearer and more consistent.

Differences in type of coverage. Ormond, Zuckerman, and Lhila found that the proportion of the non-elderly population covered by private health insurance (primarily employer-sponsored coverage) falls as the county of residence gets more remote, dropping from 74.6 percent for urban residents to 71.5 percent for residents of rural counties next to an urban county (rural adjacent)) to 62.6 percent for residents of rural counties removed from any urban county (rural nonadjacent).

And while public coverage helps meet some of the need in rural areas created by a lack of private coverage (15.5 percent of rural, nonadjacent residents were publicly insured, compared with only 11.1 percent of urban residents), the percentage of people left without any health insurance--public or private--increases as the county of residence gets more remote: from 14.3 percent in urban to 17.5 percent in rural adjacent to 21.9 percent in nonadjacent areas.

Differences in employment. According to Pol, disproportionately more rural residents than urban rely on individual insurance plans or insurance coverage purchased through small employers. And among rural residents who are employed, a higher proportion than the urban employed is in a job not conducive to moderately priced group health insurance-that is working for a small employer, self-employed, or in an agricultural occupation. Ormond, Wallin, and Goldenson support this assertion with their finding that lower rural coverage rates are associated with the prevalence of part-time or self-employment in the rural economy.

Differences in length of time without insurance. In a study of Nebraska households, Mueller, Patil, and Ullrich found that the median spells of uninsurance were approximately six months for urban residents, 16 months for rural residents, and 22 months for frontier residents. In addition, they found that spells were more likely to end for urban residents regardless of the length of the spell.

Looking at physician utilization following a spell of uninsurance (that is, once residents gained insurance), the researchers found that urban residents actually decreased their utilization, frontier residents increased theirs, and rural residents maintained their existing pattern. Possible reasons for the decrease in urban utilization, according to the study, include 1) urban residents had not interrupted their normal pattern of utilization during the spells of uninsurance because the spells were relatively short, 2) urban residents had increased their visits to physicians near the end of the spell because of the availability of free care at clinics and the prospect of paying co-payments and/or deductibles once insurance was obtained, and 3) urban residents were faced with pre-existing condition clauses in their newly gained insurance coverage, which kept them away from the doctor.

Possible reasons for the increased utilization among frontier residents include 1) frontier residents had a pent-up demand for care because of their longer spells of uninsurance, 2) frontier residents may have been less likely while uninsured to seek free care out of a sense of pride as well as a lack of access to free clinics, and 3) frontier residents did not let expectations of co-payments or deductibles deter them from seeking care once insurance was obtained.

Differences among population groups. Select groups within the overall population-particularly those who are vulnerable in terms of economic and/or health concerns--are often of special interest to policymakers. In a study focused on rural minorities, Mueller, Patil, and Boilesen found that lack of insurance, rural residence, and minority status all combine to lower the utilization of healthcare services.

In a study focused on rural children, Coburn, McBride, and Ziller found that rural children were more likely than urban to lack health insurance at a point in time. Rural children were also more likely to have protracted spells, but the average duration of uninsurance was shorter for rural children. Looking at the characteristics of the uninsured children, the researchers found that a higher proportion of rural children lived in poverty-a fact that likely contributed to their lack of insurance.

Differences in need. Difference in health insurance status between rural and urban people takes on additional importance when one considers that rural populations tend on average to be older, poorer, and have lower levels of education-all of which can contribute to a lower health status and a higher need for health care. (Ormond, Zuckerman, and Lhila)

Differences among rural areas. Rural America is diverse. Its economies, terrains, cultures, assets, and liabilities vary. Issues related to health insurance vary as well, as shown in differences between rural areas that are adjacent to urban areas and rural areas that are not, and between different subgroups of the rural population. Consequently, the rural uninsured cannot be thought of as a single, homogenous group.

Impacts on Rural Health Care Providers

Not surprisingly, health insurance (and the lack thereof) has great impact on health care providers and, by extension, on the availability of health care in a given area. To a large extent, health insurance status of patients determines whether and how much health care providers are paid for their services. And while most health care providers expect to provide a certain amount of uncompensated care, such care can, if it becomes too large a share of a provider's services, endanger a provider's ability to continue service.

In looking at the rural health care safety net, Ormond, Walling, and Goldenson report that because rural areas have a higher proportion of Medicare and Medicaid enrollees as well as a higher proportion of uninsured (according to their findings) than do urban areas, providers in rural areas are potentially more vulnerable-subject to state and federally determined reimbursement rates on the one hand and asked to provide more charity care on the other.

Sutton et al. provide a measure of that vulnerability. In their study of uncompensated and charity care by rural hospitals, they found that approximately 17 percent of the 246 rural counties studied were at risk of losing access to local hospital services because all hospitals in the counties had an average 3-year negative total margin of profit. They also found that rural hospitals that treat a high proportion of low-income patients provide significantly more charity and uncompensated care than do other hospitals.

For Further Analysis…

As with many domestic policy issues, efforts to help the uninsured are crafted and delivered at various levels-federal, state, and local. As a result, there is a need for research and analysis, and therefore data collection, at all levels. Socholitzky and Turnbull provide a guide to help local groups obtain data on the uninsured people in their communities.

Given the importance of health insurance coverage in affecting access to health care and subsequent health status, it is essential to continue monitoring the extent to which the rural population is receiving such coverage.

The Reports

The reports included in this summary were selected because 1) they focused on one or more aspects of health insurance coverage (or lack thereof) in rural areas, and 2) they were prepared within the last five years. The reports come from a range of institutions, including the federally funded Rural Health Research Centers. They were identified by the federal Office of Rural Health Policy and through a literature search provided by the Rural Information Center Health Service.

Following, is the list of reports in order of appearance in the above synthesis.

"Health Insurance Status of the Civilian Noninstitutionalized Population: 1998", by J. Rhoades, E. Brown, and J. Vistnes. MEPS Research Findings No. 11. Agency for Healthcare Research and Quality. April 2000.

"Low-Income and Uninsured: The Challenge for Extending Coverage," by D. Rowland. The Kaiser Commission on Medicaid and the Uninsured. Testimony before the U.S. Senate Committee on Finance. March 13, 2001.

"Counting the Uninsured: A Comparison of National Surveys," by P. Fronstin. EBRI Issue Brief Number 225. Employee Benefit Research Institute. September 2000.

"Supporting the Rural Health Care Safety Net," by B. Ormond, S. Wallin, and S. Goldenson. Occasional Paper Number 36. Assessing the New Federalism. The Urban Institute. March 2000.

"Rural/Urban Differences in Health Care Are Not Uniform Across States," by B. Ormond, S. Zuckerman, and A. Lhila. Assessing the New Federalism. Series B, No. B-11. The Urban Institute. May 2000.

"Health Insurance in Rural America" by L. Pol. Rural Policy Brief 5(11). RUPRI Center for Rural Health Policy Analysis. August 2000.

"Lengthening Spells of Uninsurance and Their Consequences," by K. Mueller, K. Patil, and F. Ullrich. J of Rural Health, Vol. 13, No.1. Winter 1997.

"The Role of Uninsurance and Race in Healthcare Utilization by Rural Minorities," by K. Mueller, K. Patil, and E. Boilesen. HSR: Health Services Research, Vol. 33. No. 3. August 1998.

"Patterns of Health Insurance Coverage Among Rural and Urban Children" by A. Coburn, T. McBride, and E. Ziller. Working Paper #26. Maine Rural Health Research Center. November 2001.

"Is the Rural Safety Net at Risk? Analyses of Charity and Uncompensated Care Provided by Rural Hospitals in Washington, West Virginia, Texas, Iowa, and Vermont" by J. Sutton, B. Blanchfield, A. Singer, and M. Milet. Project HOPE Walsh Center for Rural Health Analysis. January 29, 2001.

How Many Uninsured? A Resource Guide for Community Estimates, by E. Socholitzky and N. Turnbull. The Access Project. June 1999.