In this article we presented the list of 15 cities with the highest uninsured rates in America (click to skip ahead and see the top 10 cities with the highest uninsured rates).
United States is the most medically advanced country in the world. Global pharmaceutical industry spent around $1.5 trillion over the last 10 years in research and development (R&D) and U.S. pharma companies account for more than half of this spending (see the biggest pharma companies in the world). For reasons we don’t get into in this article these companies charge relatively exorbitantly high prices to American patients to recoup their investments, whereas European patients and the rest of the world pay lower prices for the health benefits of new and improved treatment options.
Health care is extremely expensive in the United States and one reason for this is high drug prices. There are several other factors. For example health insurance companies don’t have any meaningful incentives to reign in the rising cost of health care. Let’s take a look at the perverse incentives provided by the U.S. healthcare law, known as the 80/20 Rule:
“The 80/20 Rule generally requires insurance companies to spend at least 80% of the money they take in from premiums on health care costs and quality improvement activities. The other 20% can go to administrative, overhead, and marketing costs.
The 80/20 rule is sometimes known as Medical Loss Ratio, or MLR. If an insurance company uses 80 cents out of every premium dollar to pay for your medical claims and activities that improve the quality of care, the company has a Medical Loss Ratio of 80%.
Insurance companies selling to large groups (usually more than 50 employees) must spend at least 85% of premiums on care and quality improvement.
If your insurance company doesn’t meet these requirements, you’ll get a rebate on part of the premium that you paid.”
So, if you are an insurance company executive, you’d rather see your customers pay $30,000 in annual health insurance than $20,000 because you can keep $6000 instead of $4000 of that amount for your expenses. Basically, our health care law incentives insurance companies and health care providers to increase the cost of care year after year. Health insurance companies such as Anthem, Inc. (ANTM), Cigna Corporation (CI), Humana Inc. (HUM), and UnitedHealth Group Incorporated (UNH) currently trade at much lower price earnings multiples than the rest of the stock market. We believe these stocks will continue to grow their earnings as health care costs continue to increase and these stocks will appreciate significantly.
One main result of ever increasing health care costs is that there is a large number of people who can’t afford health insurance premiums and are uninsured. In this article we presented the list of 15 major cities (with total population of at least 300,000) that have the highest uninsured rates in America. Our data are sourced from the CDC, released in December 2019, and cover the 2016, 2017 period. We have to note that the national average for the insured rate was 7.9% in 2017 and 8.6% in 2018. So, the number of insured people in the following 15 cities with the highest uninsured rate is probably higher today:
15. Phoenix, AZ
The CDC estimates that 19.9% of people in Phoenix are uninsured. The age-adjusted prevalence estimate of current lack of health insurance among adults aged 18-64 years in Phoenix in 2017 is 19.8%.
14. Las Vegas, NV
The CDC estimates that 19.9% of people in Las Vegas are uninsured. The age-adjusted prevalence estimate of current lack of health insurance among adults aged 18-64 years in Last Vegas in 2017 is 20.2%.
Pixabay/Public Domain
13. Austin, TX
The CDC estimates that 21.4% of people in Austin are uninsured. The age-adjusted prevalence estimate of current lack of health insurance among adults aged 18-64 years in Austin in 2017 is 20.6%.
12. Jacksonville, FL
The CDC estimates that 20.7% of people in Jacksonville are uninsured. The age-adjusted prevalence estimate of current lack of health insurance among adults aged 18-64 years in Jacksonville in 2017 is 21.0%.
11. Memphis, TN
The CDC estimates that 22.3% of people in Memphis are uninsured. The age-adjusted prevalence estimate of current lack of health insurance among adults aged 18-64 years in Memphis in 2017 is 23.4%.
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Click to see the top 10 cities with the highest uninsured rates.
Disclosure: 15 Cities with Highest Uninsured Rates in America is originally published at Insider Monkey. No positions in any of the stocks mentioned in the article.
