The majority of uninsured American families who are not covered by group health insurance through an employer cannot afford to buy health insurance, according to a new study by HHS' Agency for Healthcare Research and Quality.

Some experts have suggested that because 23.8 million uninsured Americans under age 65 who do not have access to employer-based health insurance have incomes above the federal poverty line, they can afford to purchase policies if they so choose. But new data show otherwise.

"Wealth, Income, and The Affordability of Health Insurance," published in the May/June 2009 issue of Health Affairs, shows that measuring families' median net worth - the value of their savings plus other assets minus debt rather than just income - provides more precise estimates of the percentage who could purchase policies if they chose to do so. Until now, most studies have used income alone to estimate how many more Americans could be covered by health insurance.

"This study has important implications for defining who can afford to pay for health insurance in the next wave of health care reform," AHRQ Director Carolyn M. Clancy, M.D., said. "We need accurate, evidence-based findings to ensure that we are providing policymakers with reliable information."

Using national survey data, the researchers found that the median net worth of families who purchased health insurance was $105,819 - nearly 35 times greater than the median net worth of only $3,057 for families who were uninsured. Median net worth means that half the families had net worth above or below that amount.

In contrast, the median income of families who purchased health insurance was $41,086 - only 2.3 times greater than the median income of $17,690 for families who were uninsured.

The researchers, who used 2002 and 2003 data from AHRQ's Medical Expenditure Panel Survey, also found that 4.1 percent of families with access to employer-based health insurance were poor (family income below 100 percent of the federal poverty line) and 11.1 percent were low income (family income 100-199 percent of the federal poverty line). In contrast, among families without access to employer-based health insurance, 33.8 percent were poor and 28.4 percent were low income.

According to Didem Bernard, Ph.D., an AHRQ economist who led the research, the standard model based on income alone used by economists works well for estimating who will enroll in employer-based health insurance. However, it does not work well for who will purchase non-group coverage because it overestimates health insurance enrollment for people with low net worth and underestimates for people with high net worth.