There are few arguments against the notion that access to health insurance has the potential to reduce medical costs to the individual, thereby increasing access to medical services and improving health (Kirby & Kaneda, 2010). Health insurance is specifically designed to subsidize the cost of accessing medical services, thus reducing the financial burden of healthcare to the consumer; this is especially important for the poor and the sick
However, despite the access and financial benefits of health insurance, being insured does not consistently predict better health (Kronick, 2009). One potential reason is that health is influenced by a larger construct: socioeconomic position. Socioeconomic position is known to influence perception of care, health behaviors, and health outcomes (Braveman, Egerter & Williams, 2011).
Prior studies find that higher socioeconomic status and having health insurance are separately associated with better health outcomes, but few examine these relationships as interrelated. Few studies specifically examine whether the positive effect of health insurance on health is connected to socioeconomic status. This study hypothesizes that: 1) people who have insurance have higher self-rated health than those who do not; 2) people who have higher income are more likely to have both insurance and higher self-rated health. Substantial policy implications emerge from these hypotheses, especially given increasing income disparity and ongoing debates about universal health insurance in the United States (U.S.).
Literature Review
In the following subsections we review literature pertinent to our research questions.
Insurance and Health
In the past 20 years, numerous studies have found that being insured is related to better access to healthcare, and having a usual source of care, regular preventive care, and fewer avoidable hospitalizations (Hoffman & Paradise, 2008; Kirby & Kaneda, 2010; Ross & Mirowsky, 2000). Those who are insured have lower mortality and morbidity, higher health-rated quality of life, and increased life expectancy (Arroyave, et al., 2013).
Findings are not unanimous, however. Ross and Mirowsky (2000) find that even with adjustments for initial health, individuals with insurance have worse or no different health than the uninsured. Black et al. (2013) and Kronick (2009) find that controlling for demographic factors, health status, and health behaviors, the uninsured do not have worse health outcomes than the insured. In addition, despite the increase in the percentage of Americans with private health insurance since the 2010 enactment of the Affordable Care Act (ACA), population health has not improved, and life expectancy has decreased slightly (Ho & Hendi, 2018).
The mixed results of studies and the lack of improvement in health suggests that many factors other than health insurance contribute to health, perhaps to an even greater degree.
Income and Health
One factor that is known to be strongly associated with health is socioeconomic status, broadly comprised of elements such as education, employment/occupation, income/wealth and environment, and often represented by income (Cowan, et al, 2012). Studies have found that higher income and other socioeconomic elements are associated with better health status, self-rated health, and life-expectancy (Braveman, Egerter & Williams, 2011; Chetty, et al., 2016; Health Affairs Health Policy Brief, 2018; Pathak, Low, & Swint 2021; Ross & Mirowsky, 2000; Woolf, et al., 2015).
Income and Insurance
Few studies have examined the relationship between income and insurance. Three studies find that income is a predictor of having health insurance (Burtless & Svaton, 2010; Fronstin; 2005; Markowitz, Gold & Rice, 1991).
Pathways between Socioeconomic Status and Health
In explaining why socioeconomic status matters in health, a number of pathways have been considered. Socioeconomic position is thought to influence health through illness/health-promoting resources, experiences, and health behaviors (Braveman, Egerter & Williams, 2011). Concentrated poverty is correlated with economic instability, lack of social solidarity, decreased social capital, and other resources and experiences that contribute to health (Dreier, Mollenkopf, & Swanstrom, 2013). Social policies (poor access to healthcare, food deserts, poor quality housing, etc.) that reinforce the material conditions of concentrated poverty are another partial explanation of the wealth-health phenomenon (Dreier, Mollenkopf, & Swanstrom, 2013).
The Pathway of Income-Insurance-Health
Access to healthcare via health insurance is theorized to be an important pathway between socioeconomic status–particularly income–and health (Braveman Egerter & Williams, 2011). In addition, the inconsistent research findings regarding the relationship between insurance and health may due to the effects of socioeconomic status. For example, for those living in areas of concentrated poverty, quality of care is lower for the insured and the uninsured alike (Dreier, Mollenkopf & Swanstrom, 2013).
To date, the income-insurance-health pathway remains theoretical. The lack of empirical evidence begs the following questions: 1) Does health insurance impact health independently of socioeconomic status, or in relationship with socioeconomic status, or both? 2) Does socioeconomic status (as measured through income) impact health directly, or through its impact on access to health care (health insurance), or both?
Other Factors Impacting Income, Insurance, and Health
This study focuses on the relationships between the socioeconomic element of income, health insurance status and health. Other measures of socioeconomic status, such as education and employment, are interrelated with income and complexly related to having insurance and health status. For example, higher education and employment predict higher income (Hadley, 2003), which predicts having insurance (Markowitz, Gold & Rice, 1991) and better health (Guma, Sole-Auro, & Arpino, 2019). Therefore education and employment are included in our model as influencing all of the three main variables of income, insurance and health.
Other factors that may influence income, health insurance and health are age, ethnicity, race, gender, marital status, geography, and country of birth (U.S. born or not). Age affects the probability of having insurance, since 14.5% of working age adults are uninsured, while all adults 65 and older have Medicare (Cohen, et al, 2020). Older individuals are also more likely higher income, but worse health (Cheng et al, 2013). Blacks and Hispanics tend to have a lower income (Akee, Jones, & Porter, 2019), are less likely to have health insurance (Health Affairs Health Policy Brief, 2018), and are more likely to have poorer health than Whites (Cogburn, 2019). On average, women work for less pay, in smaller firms, with fewer benefits and more part-time work than men (Boniol et al, 2019), so they are more likely to have lower income and less likely to have employer-sponsored health insurance. Despite greater longevity, women have lower self-reported health and other health disparities (United Health Foundation, 2021).
Regarding marital status, married people tend to have higher household incomes (Perry, 2019). Married women are more likely to have employer-sponsored health insurance through either their own employment or that of their spouse (Simpson & Cohen 2017).
Geographical considerations show that mortality is higher in rural compared to urban areas (Gong, et al., 2019). In one study, higher mortality in rural areas is partially explained by socioeconomic deprivation and lack of health insurance (Gong, et al., 2019). Since certain U.S. regions, such as the South, have higher concentrations of rural areas than other regions, these characteristics play out on a regional basis.
Assessing the impact of country of birth is difficult, as income levels, health insurance coverage and health are not uniform across immigrating nationalities. In general, the foreign-born are less likely to have insurance, but the longer they live in the U.S., the more likely they are to obtain it (Greico, 2004). With exceptions for certain nationalities, the foreign-born are also more likely to have lower income (USA Facts, 2019). In one exception, Neilson (2017) reports that foreign-born Blacks have incomes 30% higher than native-born. And while many of the foreign-born may have higher rates of diabetes, infections, and occupational injuries, they tend to have lower rates of mortality, circulatory diseases, overweight/obesity, and some cancers (Argeseanu, Ruben, & Narayan, 2008). Their health, however, resembles natives the longer they are in the U.S. Due to the complexities of country of birth, the direction of the relationship with insurance coverage, income and health is uncertain.
Literature Summary
The literature indicates that researchers have not fully unpacked the relationships between income, health insurance status, and health. Additional studies are necessary to understand whether insurance and income are associated with each other, and together, with health, and to develop a more unified theory of health insurance, socioeconomic status, and health.