Underinsurance (healthcare)

Underinsurance is the state of an individual having some form of health insurance that does not offer complete financial protection. This results in the underinsured individual to therefore lack the ability to cover out-of-pocket healthcare expenses. There is not yet one clear definition that has been established to include all of the domains that must be addressed. There are three domains that are included when considering underinsurance in healthcare. They include; (1) the economic characteristics of health insurance, (2) the benefits that are or are not covered, and (3) actual access to health services and resources. All of these aspects must be considered when defining, measuring, and identifying instances of underinsurance.

The term “uninsured” is often better known and more often discussed. This is because it has a clear definition of an individual not possessing health insurance coverage. This clearly defined term allows for accurate measurements of the number of uninsured people, and more reliable research results. However, an individual being underinsured, or experiencing underinsurance is much more difficult to research and measure. This is because there is not one simple clear-cut definition of underinsurance. Rather there are three different types of definitions that are most commonly discussed; economical, attitudinal and structural. This difficulty and inconsistency in defining the term has led to a lack of research and knowledge of the topic. It has been established that individuals who are categorized as underinsured, are at high financial risk, and face barriers in the level of access to care. This difficulty in access to care is similar to those who are completely uninsured.

The economic definition of underinsurance is a person’s actual ability to pay for their recommended health care and services. This includes the cost of the insurance premiums, co-payments, and deductibles. An economic definition of underinsurance specifically defines a certain monetary limit above which the expenses of health care coverage become a significant financial burden, and interfere with access to care. This definition of underinsurance is utilized and identified when an individuals' out-of-pocket expenses for necessary medical care are above a specified percent of that individual’s income, within a given time frame. This definition is also used when a person chooses to delay, or not receive necessary health care services solely because of the out-of-pocket costs associated with the services.

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