Michael Young is a 36-year-old self-employed drywall worker. He is also an example of what many policy-makers believe is the biggest problem in the nation's health care system.

On an income of $800 to $1,200 a month for himself and his wife, Young cannot afford health insurance. But the amount he makes, plus the fact that he is able-bodied and childless, makes him ineligible for Medicaid, the program that helps pay for medical care for low-income individuals.

So when Young fell from a scaffold last month, smashed his ribs and ended up in the George Washington University Hospital emergency room, he suddenly found himself with an unanticipated bill of several hundred dollars that he will have to pay off a little at a time.

At least 31.5 million Americans are not covered by any health insurance or government programs such as Medicare for the elderly or Medicaid for the poor, according to Census Bureau figures. Millions more have bare-bones policies or suffer lengthy breaks in coverage between jobs.

The rising cost of health care has made health insurance a virtual necessity for all but the very rich. About two-thirds of the insured are covered by their employers, who usually pick up most of the premium costs. But for those who work part time, in low-paying jobs, or for themselves, paying the premiums -- in Young's case it would have been $300 a month -- is often impossible.

The growing number of men and women in these kinds of jobs as a result of changes in the economy is a major reason why the number of uninsured increased by at least 6 million in the last decade. Many health care experts say the consequences for hospitals -- which nationwide lose $8.5 billion a year on indigent care, according to the American Hospital Association -- will be increasingly serious.

At GWU Medical Center, the emergency room and other departments of the hospital lose $23 million a year on uninsured indigent patients, according to Mark Smith, chairman of GWU Hospital's department of emergency medicine. Other parts of the medical center that are not technically part of the hospital also lose money on the uninsured.

Losses like these led GWU and Howard University Hospital to announce last week that they would cut their work forces by 150 employees and 281 employees respectively to save money. Howard also announced that it would start limiting services to charity patients.

About 114,000 people in the District have no health insurance, and District hospitals are estimated to spend $176 million on indigent care annually. The hospitals' problems are compounded by the drug-use epidemic and patients who must stay in the hospital after acute care is no longer needed because they have no other place to go.

Michael Barch, GWU Hospital's director of administrative affairs, said some uninsured patients do pay their bills and "for some who can pay on a limited basis, we work out a payment plan. Over the years, hundreds of quite low-income patients have systematically paid off their bills" under such plans, he said. But for "the overwhelming majority who are just poor and can't afford to pay, well, we treat them as charity."

Since those with the least income are covered by Medicaid, it is the working poor who suffer the most from having no insurance.

"Three-quarters of the nation's uninsured are employed or dependents of employees," said Jeffrey Merrill, a health economist who is vice president of the Robert Wood Johnson Foundation, which specializes in projects to improve access to health care. "Nearly half of the working uninsured are employed by small businesses with 10 or fewer employees."

Small businesses, operating on the margin financially, are often unable to afford health insurance for their employees, according to Merrill. "Insurance companies usually charge small businesses significantly higher premiums because they have fewer employees to spread risk over and require higher administrative costs in handling the policies."

Young said many construction firms hire workers such as himself as subcontractors rather than as employees. As a result, the workers get health insurance only if they buy it themselves. "I'm not poor but I'm not rich," he said, and that means he can't afford insurance and at the same time make a go of his business.

The result, he said, is "we don't go for checkups," and once "when I broke my hand, I didn't go to the doctor," he said, displaying a large permanent lump on his hand. He can get some care at the veterans hospital, he said, but not for everything, and "if it has anything to do with work, they won't take it."

Skipping preventive care and going to the doctor only in the direst emergencies is common among the uninsured, leading to worse illness and crippling conditions later, according to health care experts. "The first time they see a doctor is when they go to the emergency room," said Rep. Fortney H. "Pete" Stark (D-Calif.).

As Dora Burke, 32 -- who has two children and an income of under $10,000 a year from cleaning houses -- put it: "I don't go to the doctor, I simply don't -- only when it's real serious."

Christina Novakovic, a widow employed by a church group to help feed the homeless, does get hospital insurance from her employer. But it doesn't cover doctor bills or some other costs, so she goes to the free Zacchaeus Medical Clinic on N Street NW for her high blood pressure and other ailments. "God bless them for that," she said. When she had hepatitis, "they took care of me at the hospital," she said, but she owes $1,000 in certain uncovered costs. "I don't have it."

Another Zacchaeus patient is Barbie Buckingham, wife of a self-employed carpet mechanic who has five children "and one on the way" and cannot afford health insurance. A family policy would be prohibitively expensive, she said, because of the size of the family and because she had cancer surgery and one child had open heart surgery several years ago.

The family's income, she said, is under $20,000 -- barely above the $19,120 poverty line for a family of seven. But even if their income were slightly lower, the family would not be eligible for Medicaid, which does not cover everyone below the poverty line.

Under the law in Maryland, where she lives, she might be eligible for Medicaid during pregnancy. But neither she nor her husband could qualify for ongoing Medicaid help unless family income were under $8,200. Despite her cancer, "I never have gone in for periodic checkups on whether I am okay. I can't afford it," she said.

In 1986, about 41 percent of the nation's poor were in the Medicaid program. Income cutoffs set by the states are usually below the poverty line, except for small children and pregnant women. And regardless of income -- even if zero -- Medicaid under federal law is not open to able-bodied, childless, non-pregnant single adults or childless couples below 65.

In the last year, Medicaid eligibility has been expanded somewhat, preventing any further increase in the number of uninsured, according to Merrill.

But concern over the implications of the millions who don't have insurance has increased in recent years, though the difficult budgetary and ideological questions involved have prevented any kind of consensus.

Stark, chairman of the House Ways and Means health subcommittee, wants to mandate coverage under a government insurance program for those who don't already have it and pay for it with a new payroll tax. Sen. Edward M. Kennedy (D-Mass.) wants to require all employers to cover their workers, with a new Medicaid-type program picking up those who don't work. A similar proposal is advocated, with different details, by the congressional commission headed by Sen. John D. Rockefeller IV (D-W.Va.).

Some conservative groups favor tax and voucher proposals that would minimize direct government intervention in insurance, while insurance firms worry that some versions of national health insurance would destroy their business.

For James Krause, 61, a self-employed California printer, a solution can't come fast enough.

Just after the company that wrote his health insurance failed, and before he could purchase a new policy, he suffered a heart attack and stroke that cost him $40,000 in medical bills. He was forced into bankruptcy and lost his company. The insurance he could buy today on an individual basis for himself and his wife would cost nearly $7,000 a year because of his age and existing condition.

"It should be a basic right like police, or a fire or highway department," he said. He always thought that uncovered health disasters struck only the historically underprivileged. But he said, bitterly: "I wasn't poor. It could happen to anyone."