Health coverage expansion efforts that require cost-sharing by target uninsured populations may be impeded by competing household budget priorities, a new California HealthCare Foundation (CHCF) issue brief finds.

What Do Californians Buy If They Don't Buy Health Insurance?, based on research by Helen Levy and Thomas DeLeire of the University of Chicago, finds the decision to buy health insurance represents a tradeoff for households between health insurance and other goods and services. The issue brief examines the difficult spending decisions confronting many California families and shows that spending for basic needs leaves little room for many discretionary items including health insurance.

The study places health insurance purchase decisions in the broader context of household spending patterns. Comparing spending between uninsured and insured households, the researchers find that uninsured households spend a greater percent of their income on basic needs such as housing, food, and transportation than do insured households. The uninsured also spend proportionately less than the insured on entertainment, eating out, and utilities. Although uninsured households generally have less income than do insured households, the researchers observed these patterns—spending more on a few basic needs — even when comparisons were limited to insured and uninsured households at comparable income levels.

According to Marian Mulkey, program officer at CHCF, "The study confirms that families struggling to make ends meet may not find room in their budgets for monthly health insurance payments. Policy solutions that depend on voluntary participation and a significant premium contribution are unlikely to result in broad coverage expansion."

"People living without health insurance are more likely to go without needed care or to delay treatment for health problems than the insured. This often leads to poorer health outcomes," Mulkey added.

Over six million Californians were uninsured during 2001. As insurance premiums continue to increase and public insurance programs face budget cuts, challenges of getting and maintaining health insurance are likely to increase.