Cornell University PUBPOL 2350: Health Insurance Landscape

Cornell University

Introduction to the Course

  • Course Title: Why Are There Still Uninsured People in the United States?

  • Course Code: PUBPOL 2350

  • Date: September 25, 2025

Regeneron Internship and Co-Op Informational Session

  • Date and Time: Wednesday, October 1st, 4:45-5:45 PM

  • Location: Central Campus, Olin Room 155

  • Topics Covered:

    • Application process

    • Expectations

    • Company overview

    • Ambassador experiences covering areas such as research, data analytics, networking, etc.

  • Format: Questions and Answers session following the presentation by Regeneron.

Administrative Notices

  • Prelim #1 Schedule:

    • Date: Thursday, September 25th

    • Time: 7:30 PM – 9:00 PM

    • Locations by last name:

      • A – Q: Statler Auditorium

      • R – S: MVR G151

      • T – Z: MVR G155

  • Class Cancellation Reminder: No class on Tuesday, September 30th; no office hours on Monday.

Today's Topics

  1. Discussion on why so many people receive insurance through their employer.

  2. Exploration of the uninsured problem and reasons for ongoing uninsured individuals in the United States.

  3. Affordable Care Act (ACA) Exchanges: Functioning as a source of health insurance for low- and middle-income households.

Employer-Sponsored Health Insurance

Historical Context

  • World War II Context:

    • Labor shortages due to federal wage controls to combat inflation.

    • Federal government allowed employers to offer health insurance without violating wage controls.

    • Resulted in a reliance on employer-sponsored health insurance, characterized as an accidental system.

Financial Aspects of Employer-Sponsored Health Insurance

  • Example Breakdown:

    • Total employee value: $50,000

    • Salary offered: $50,000

    • Health insurance premium structure:

      • Employer contribution: $46,000

      • Employee contribution: $4,000

      • Salary after insurance payments: $45,000

    • Taxes applied (35%):

      • Employee taxed: $17,500

    • Salary after taxes and insurance: $29,250

    • Comparison of individual health insurance policy cost and financial implications.

    • Tax Advantages: Presents a favorable financial situation for employees receiving insurance through employers vs. purchasing individually.

Payment Structure

  • Workers Pay Premiums: 100% of an employer’s contribution is shifted to employees through reduced wages.

    • Alters the perception of health insurance provided by an employer; it influences total compensation rather than being a gift.

  • Legislative Change: The 1954 U.S. tax code amendment exempted employer and employee health insurance payments from taxes.

Advantages of Employer-Sponsored Insurance

  • Equity: Uniform pricing for all workers choosing the same health plan within an employer.

  • Insurance Quality: Insurance offered through large employers tends to have lower loading charges.

  • Incentives for Health: Employers invested in promoting health among employees leads to broader strategies.

Disadvantages of Employer-Sponsored Insurance

  • Risk Pooling Issues: Smaller firms struggle to pool health risks effectively.

  • Employment Mobility: Workers frequently change employers, resulting in frequent switches of health plans.

  • Cost of Private Insurance: Individuals without employer-sponsored insurance face higher costs in purchasing individually due to loading charges.

Uninsured Statistics and Access Issues

  • Health Insurance Sources:

    • Public insurance programs: Medicaid, Medicare, Military

    • Private insurance via employer/group

    • Private insurance in individual markets

    • Uninsured individuals in the U.S. (9.5% in 2023)

      • Breakdown: 57.5% employer/private, 25.5% public, 7.5% individual market.

  • Access to Care:

    • Uninsured individuals receive 50% less medical care than insured individuals.

    • Cost-related problems: Notably high among un- and under-insured adults aged 19-64.

    • Access Issues Statistics:

      • Insured all year, not underinsured: 48% faced issues.

      • Insured all year, underinsured: 57% faced issues.

      • Consequences for uninsured individuals include not filling prescriptions or avoiding specialist care due to costs.

Demographics of Uninsurance

  • By Race/Ethnicity (2023):

    • Percentage Uninsured:

      • White, non-Hispanic: 5%

      • Black: 9%

      • Hispanic: 17%

      • Asian: 6%

    • Public Insurance: Diverse participation in public vs. employer/private insurance.

U.S. Health Insurance Coverage Issues

  • The U.S. contrasts with other high-income countries by not providing universal health insurance.

  • There is no requirement to buy insurance, except for an incomplete ACA mandate (2014-2018); fines have been removed (2019).

Challenges and Gaps in Coverage

  • Why Some Firms Don’t Offer Insurance:

    • 53% of all firms provide health insurance but rates decline with smaller companies.

    • Cost Considerations: Smaller firms especially struggle to supply comprehensive health benefits.

  • Individual Market Challenges:

    • Health insurance policies in the individual market are often inferior to employer-sponsored plans due to adverse selection and higher marketing costs.

Federal Poverty Level and Health Insurance Coverage

  • Data Representation:

    • Coverage by federal poverty level (FPL) in 2023 highlights that many low-income individuals are uninsured due to Medicaid inaccessibility or other factors.

    • The value illustrated in terms of individuals/households' income vs. health insurance types available.

Reasons for Uninsurance

  1. Voluntary nature of health insurance in the U.S.

  2. Economic constraints preventing the purchase of health insurance or prioritizing other needs.

  3. Inadequate governmental coverage (e.g., Medicaid exclusions).

  4. Employer health policies may not exist or be affordable.

  5. Individuals face high premiums in the individual market compared to employer rates.

  6. Eligible individuals may forego purchasing insurance due to perceptions of fairness in premiums compared to their health status.

  7. Not everyone eligible for ACA Exchange subsidies opts to enroll.

Affordable Care Act (ACA) Overview

  • The ACA encourages states to expand Medicaid and subsidizes private insurance for low- to middle-income populations in the range of 138% to 400% of FPL.

  • Total Subscribers: 24 million predicted to decline by 8 million due to reduced subsidies.

Functionality and Understanding of ACA Exchanges

  • State-operated exchanges serve as platforms for private insurers to sell plans categorized by coverage levels (platinum to bronze).

  • Subsidies available based on income levels for low- to middle-income applicants not offered insurance by employers.

  • Government Subsidies: Designed to decrease with an increase in income level.

Economic Implications of ACA Subsidies

  • Illustrative examples show the disparity of subsidies based on age and income, denoting the importance of understanding one’s potential costs and coverage available depending on economic standing.

  • Insurer competition within the exchanges aims to lower premium prices while providing diverse options.

Summary

  • Key Points:

    • The nature of health insurance being voluntary contributes significantly to uninsured rates.

    • Social economic factors impact health insurance affordability.

    • The existence of programs such as Medicaid does not cover all low-income individuals.

    • Employer provision of health insurance varies significantly, affecting overall access.

    • The individual market presents unique challenges that lead to limited appropriate insurance availability.

    • Personal choices directly influence one's ability to engage with the health system effectively.