Rural, Urban Differences in Health Insurance

Most people get their health insurance through their jobs. But having health insurance appears to be related more to income than to employment.

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We’ll make a mistake in revamping our health care system if we think greater employment is the key to getting more people covered by health insurance. It may not be.

And we shouldn’t think that rural communities and cities will react the same way to reforms, because they certainly perform differently in today’s system.

We know that in the U.S., health care is primarily tied to employment. It would make sense, then, that as employment increases so would the rates of those who have health insurance.

That’s not what I found. Instead, I discovered that as the number of people employed goes up in rural counties so does the rate of uninsured. Moreover, there is no relationship between the rate of uninsured and the rate of employment in urban counties. 

In rural counties, then, employment and health insurance are negatively correlated. In other words, as the number of people employed increases, so does the number of people without health insurance. 

Clearly there are other factors at play that cause people to lack health insurance besides whether or not they have jobs. Perhaps income?

Health insurance is more closely associated with income than with employment. In 2006 — the last year for which county rates of uninsured are available — as median income went up, the number of people without health insurance decreased. This was true in rural and urban counties alike.

Roberto Gallardo
Health insurance is more closely related to income than it is to having a job.

Health insurance was more closely related to the poverty rate than to employment. As the poverty rate accelerates, so does the rate of people lacking health insurance.

As I did these calculations, I found that the reasons for a high rate of uninsured are different in rural communities than in the cities. For instance, poverty appears to increase the rate of uninsured more in urban counties than in rural counties.

Finally, there appears to be a connection between the type of employment found in a county and the lack of health insurance. As the percentage of workers who are self-employed increases, so, too, does the rate of people who are uninsured. This relationship is particularly strong in rural counties.

As the percentage of people earning wages working for others increases, the uninsured rate decreases.

What does all this mean for rural communities? Clearly, there are differences in the way the insurance markets work in rural and urban America that need to be considered.

Roberto Gallardo
The higher the proportion of self-employed in a county, the higher the rate of uninsured. What will this mean to rural counties, where self-employment has been increasing?

First, being employed does not guarantee having health insurance. This is particularly true in rural areas, where an increase in the percentage of people with jobs was associated with an increase in the rate of uninsured.

Second, even if everyone in a household is employed, this doesn’t mean they can all afford health insurance. The higher the poverty rate the higher the rate of uninsured. This is particularly true in urban areas.

Finally, higher rates of self-employment were correlated with higher rates of uninsured. This was particularly true in rural areas. Certainly the continued acceleration in the rate of self-employed in rural areas since 2000 tells us that the number of people in the rural workforce who are without insurance is likely to increase in the years ahead.

Note on Sources: This is a preliminary study based on uninsured rates for each county, developed by the Census Bureau’s Small Area Health Insurance Estimates. All the results are statistically significant.

Roberto Gallardo is a Research Associate II at the Southern Rural Development Center at Mississippi State University and a Yonder contributor.


Topics: Health


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