March 24, 2025
Health coverage: Does everyone really need it?
Health insurance is key to a strong country — it improves health and boosts our economy.
It is vital that all Americans have access to high-quality care through a mix of public and private coverage programs.
Health coverage keeps people healthy and strengthens our economy.
At Kaiser Permanente, we support expanding health coverage, so that everyone has it. Unfortunately, millions of people are at risk of losing their coverage.
Potential Medicaid cuts could take away care from people with low incomes and people with disabilities. Enhanced premium tax credits that help people afford health coverage will expire after 2025.
Recently, policymakers have started to question whether health coverage improves health. We know for a fact that it does.
So, let’s take a look at how health insurance works — and why it’s so important that everyone has access to it.
How health insurance works
Health insurance spreads medical costs across a large group of people. Since health care can be expensive and is often unpredictable, health coverage protects individuals and families from financial ruin. By also covering healthy people when they need less care, health insurance makes care more affordable and accessible for everyone. This economic security benefits society as a whole.
Health insurance in the United States is a mix of public and private coverage. People can get health insurance:
- Through their jobs
- Through government programs like Medicare and Medicaid
- By buying individual policies through government-run health benefit exchanges
Covered care often includes regular checkups, preventive screenings, emergency treatment, prescriptions, and hospital visits.
Many people, especially those with private insurance, pay into a shared fund that covers the costs of their care.
25% higher risk of premature death
for people without health insurance as compared to people with coverage.
To keep health insurance affordable and stable, insurers rely on a mix of healthy people and people with more health care needs to create a balanced pool of insured people. This balance helps spread out costs and keeps premiums stable. Without balance, premiums can rise sharply, causing people without immediate care needs to leave while people who have more need for care stay in the pool, leading to more imbalance. This is known as an actuarial “death spiral.” Avoiding this is critical to all health coverage programs, public and private alike.
Recently, high deductible plans have become more common in both private insurance and public coverage. In an effort to keep premiums lower, these plans cover fewer expenses at first. Comprehensive coverage only starts once an individual has paid a certain amount of money out of pocket.
To offset this, these plans often pair with health savings accounts that people and employers can contribute to. These accounts provide tax benefits to encourage people to save for future health costs. Preventive services, like checkups and screenings, are often fully covered and don’t require out-of-pocket costs. These features help ensure people can get the health care they need.
At Kaiser Permanente, we believe a mix of public and private coverage best serves America’s needs. Low- and no-cost government programs offer essential safety nets. Private insurers usually pay providers higher rates than public programs, help employers offer competitive benefits to their employees, promote competition, encourage new ideas, and give consumers more options.
Coverage improves health
Health coverage is clearly associated with better health outcomes. Research proves it. A few examples:
- People without insurance have a 25% higher risk of premature death compared to people with coverage.
- People with health insurance are much more likely to be screened for breast cancer (75.7% versus 45%), cervical cancer (75.2% versus 42%), and colorectal cancer (72.2% versus 29.8%). These screenings can catch problems sooner when they are easier to treat, preventing complications and serious health issues from ever happening. Over the past 3 decades, advances in screening and treatment have reduced the cancer death rate by 33%.
Coverage reduces health care costs
Health coverage helps people get care for small problems before they become big ones.
- Without coverage, many people delay care until their conditions worsen. This leads to higher costs for both patients and the broader health system.
- Preventive care saves money. It helps people better manage new and ongoing health conditions and avoid expensive treatments and hospitalizations.
Coverage keeps America’s health care system stable
Health coverage is crucial for keeping hospitals open and medical professionals available in our communities. This is especially true in rural and underserved communities.
Since 2005, 192 hospitals in rural areas have shut down. Eight closed in 2023 alone.
States that haven’t expanded Medicaid face even greater challenges. These are states that chose not to raise the income limits for Medicaid, even though the Affordable Care Act allows it. In 2019, rural hospitals in these states were more than twice as likely to not get paid for services compared to rural hospitals in expansion states.
When more people have health coverage, hospitals’ funding is more reliable and stable. This allows them to invest in staff, technology, and expanded care options.
Coverage drives economic productivity and opportunity
People who have health coverage are better employees.
They miss fewer days of work — thanks to preventive care that keeps them healthy.
And, they’re more productive because they feel healthy and well.
Policies that expand access to affordable health insurance support positive health and economic outcomes.
Policy recommendations
To ensure as many people as possible have access to health care and to improve health, we support policies that:
- Extend the availability of enhanced premium tax credits to help individuals, families, and small business owners afford health insurance
- Retain the current share of federal funding for Medicaid
- Continue coverage for adults with low incomes who are receiving care and coverage from Medicaid expansion
- Make sure Medicare keeps payment rates steady for providers and plans
Health coverage is key to a strong country — it improves health, strengthens health systems, and supports economic growth.
By making coverage accessible we can create a healthier, more resilient future.
