Health Insurance Coverage and Income Inequality in the United States: Findings from the American Community Survey, 2010 to 2023.

OBJECTIVE: This note seeks to provide crucial insights into disparities in private and public health insurance coverage as determined by income inequality and real income in the United States. Socio-demographic dynamics are complex, as they are shaped by multidimensional factors, including income, socioeconomic status, geography, and educational attainment. Analysis of health insurance coverage disparities across the United States geographical units may reveal inequalities in health care access and, consequently, in health outcomes. Data and Methodology: The data for this analysis are sourced from the American Community Survey, which is conducted by the United Census Bureau. This survey provides detailed information on the Gini index (as a measure of income inequality), real household income, and private and public health insurance coverage. The study utilizes annual data from 2010 to 2023, covering 52 geographical units (50 states, the District of Columbia and Puerto Rico). To explore the relationship between health insurance coverage, income inequality and real income, a panel model incorportating fixed and random effects was employed to explore private and public health insurance coverage as a function of income inequality and real income. Furthermore, 52 geographical units are classified into four groups from the richest to the poorest, where each state income group contains 13 geographical units. This classification reduces the analytical complexity and allows for an easier discernment of effects across different income tiers.

KEY FINDINGS: The results demonstrate that private health insurance coverage is approximately double that of its public counterpart. Divergent effects are observed: increasing income inequality reduces private health insurance coverage (elasticities from -1.08 to -0.67), while simultaneously increasing public health insurance coverage (elasticities from +0.60 to +1.58). In contrast, real income growth positively affects both coverage types showing, nearly unitary elasticities. Disparities across the four income groups suggest an uncoordinated policy response: high income geographical units experience the strongest negative response to inequality, whereas low income geographical units are less affected.

CONCLUSION AND POLICY IMPLICATIONS: The findings underscore the structural link between economic conditions and health insurance coverage. They suggest the need for targeted policies that could raise household income, such as job creation and wage growth to ensure equitable health insurance coverage and ultimately improve the health of Americans. Current policies appear to heavily burden the Federal government with subsidies to programs like Medicaid, Medicare, and Veterans Affairs programs. Future research could study the specific responses of each of these programs to income inequality and real income variations. This finer analysis could better guide the distribution of government funds and policies. A further line of inquiry could consider a regional analysis to address geographical dimensions and the issue of ecological fallacy, although this is beyond the scope of this note.