Uninsured tally dips to 45.7 million, with more covered by government

The share of the American population covered by employer-sponsored insurance continues to slide.

By Doug Trapp — Posted Sept. 15, 2008

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The number of uninsured people in the U.S. declined by 1.3 million in 2007, the first such statistically significant drop since 1999. But that does not lessen the need for health system reform, policy experts said.

Increased enrollment in government-sponsored health plans was largely responsible for the reduction in the number of uninsured to 45.7 million, according to U.S. Census Bureau figures released Aug. 26. Last year, the uninsured made up 15.3% of the population, down a half percentage point from the year before.

The Census survey found 1.3 million more Medicaid and State Children's Health Insurance Program enrollees in 2007, thanks in part to state eligibility expansions. The total number of people with government care, including Medicare and military coverage, increased by about 2.7 million between 2006 and 2007 to 83 million.

The news is a mixed blessing for physicians, said Robert Doherty, the American College of Physicians' senior vice president for governmental affairs and public policy. Although more people are insured, government programs often do not pay physicians as well as does employer-sponsored health insurance, meaning more enrollees in certain parts of the country might have difficulty finding physicians willing to see them.

"If the answer to our health care system is to just put more into the current Medicaid system, that's obviously going to be problematic," Doherty said.

The fact that nearly 46 million people were uninsured means the nation continues to face a crisis, said American Medical Association President Nancy H. Nielsen, MD, PhD. "Uninsured patients often don't get the preventive care they need, leading to more difficult and more costly conditions to treat. A good first step to address health care costs is to cover all Americans, ensuring they have better access to health care."

The Association's plan for reform would help stabilize the current system by combining tax credits with insurance market reforms to help more people buy coverage, Dr. Nielsen said. Those with higher incomes would be required to buy health insurance, and coverage for higher-risk patients would be subsidized.

The Census Bureau estimates -- collected through 100,000 phone calls and visits as part of the Current Population Survey -- tend to reflect people's insurance status at a particular point in time in 2007 rather than capture their situation for the entire year.

Bad news behind the good

A rising population masked a continued slide in employer-sponsored coverage in 2007.

Although the number of people with work-based insurance last year increased by nearly 300,000 to reach 177.4 million, the percentage of people with such coverage decreased by four-tenths of a percentage point, to 59.3%. The government share has been rising and the employer share falling for a decade, Census figures show.

"What's worrisome about this is the continued erosion of employer-based coverage," Doherty said. "As that continues, it's going to put more pressure on the public sector to pick those people up."

Meanwhile, the number of people buying health insurance on their own last year dropped by about 400,000 to 26.7 million.

"On the surface, it looks like what you've got is stability," said Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank. "But underneath the surface, it's clear that what you've got is instability."

Steady increases in insurance premiums are leading more employers to stop covering workers, Cannon said. These increases are driven partly by people using more health care than they otherwise would if they controlled the money spent on it, he said.

Insurance companies see other cost drivers at play. Wide variations in physician practice patterns, as well as costly new drugs and treatments that haven't been proven to be more effective than less expensive options, are major factors, said America's Health Insurance Plans spokesman Robert Zirkelbach.

The 2007 Census estimates also likely haven't captured the economic downturn that began late last year, which could produce a reversal of any perceived gains. "States tend to expand coverage in good times, but in times where there's a recession or downturn in the economy, states will cut back," Doherty said.

If states continue to face shortfalls, legislators will be tempted to balance their budgets by cutting Medicaid pay to physicians, said Catherine Hess, senior program director at the National Academy for State Health Policy.

An unpaid health policy adviser to presidential candidate Sen. John McCain (R, Ariz.) said the issue of the uninsured is overblown because only people who are actually denied care are truly uninsured. Many are eligible for public programs or can buy insurance, said John Goodman, PhD, president of the National Center for Policy Analysis, a conservative think tank. Almost anyone else can visit an emergency department, he said.

But American College of Emergency Physicians President Linda Lawrence, MD, called Goodman's assertion "reckless" and said EDs are already breaking under the strain of uncompensated care. "Access to care in the emergency department is no substitute for the comprehensive health care reform policy that should be at the heart of the platform of any presidential campaign."

More kids, Hispanics covered

State-driven expansions in Medicaid and SCHIP likely reversed a recent hike in the number of uninsured children. In 2006, that number reached 8.7 million, up about 600,000 from 2005, the Census report said. Last year the tally dropped back by about 500,000.

But the survey also found that the percentage of children living in poverty reached 18% for the first time since 1998. That is a concern because poor kids have higher rates of uninsurance, Hess said.

Hispanics also experienced a higher level of coverage in 2007, with 525,000 fewer uninsured than in 2006. One reason for this might be that more children of Hispanic citizens or legal immigrants have enrolled in Medicaid or SCHIP, said Leighton Ku, PhD, MPH, a professor of health policy at George Washington University.

But another possibility is that a federal push to enforce citizenship rules at the workplace and increased hostility toward undocumented immigrants have discouraged some Hispanics from participating in the Census survey. This could have skewed the results toward Hispanic U.S. citizens, who are more likely to have health insurance, Ku said.

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Picking up the slack

Two long-term health insurance trends continued in 2007: More people enrolled in government health plans and a smaller percentage of people had private health coverage. The increase in government coverage was the main reason for the 1.3 million decrease in the number of uninsured.

2006 2007
Any private
201.7 million
202.0 million
Employment-based 59.7%
177.2 million
177.4 million
Direct-purchase 9.1%
27.1 million
26.7 million
Any government
80.3 million
83.0 million
Medicare 13.6%
40.3 million
41.4 million
Medicaid 12.9%
38.3 million
39.6 million
Military health
10.5 million
11.0 million
No insurance 15.8%
47.0 million
45.7 million

Note: Respondents may have had more than one type of coverage

Source: U.S. Census Bureau, August

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Some are up, some are down

Five states and the District of Columbia reduced their percentage of uninsured residents in the past four years. Another 10 states saw expansions in their uninsured populations during that same time period.

Change in 2-year averages Average uninsured number
States with rate decreases
West Virginia -2.7% 268,000
Massachusetts -2.4% 527,000
District of Columbia -2.2% 64,000
Indiana -2.1% 766,000
Connecticut -1.5% 344,000
Wisconsin -1.2% 480,000
States with rate increases
Louisiana 3.3% 807,000
Mississippi 3.0% 543,000
New Mexico 2.6% 425,000
Nebraska 2.3% 212,000
Kansas 2.0% 320,000
North Carolina 2.1% 1.5 million
Kentucky 1.6% 569,000
New Jersey 1.4% 1.3 million
Texas 0.9% 5.7 million
New York 0.8% 2.6 million

Note: 2-year averages were from 2004-06 and 2005-07. Rate changes in other states were not statistically significant.

Source: U.S. Census Bureau, August

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External links

"Income, Poverty, and Health Insurance Coverage in the United States: 2007," U.S. Census Bureau, August (link)

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