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The Uninsured in the United States

What the Rise to 46.3 Million Means

October 2009

Public Citizen Health Letter

On September 10, the U.S. Census Bureau released its most recent data on the uninsured, reflecting the situation for the year 2008. The number of uninsured rose from 45.7 million in 2007 to 46.3 million in 2008. This resulted in a slight increase in the percentage without coverage, from 15.3 percent in 2007 to 15.4 percent in 2008.

This year the numbers have greater urgency because they reflect the economic recession and highlight the problem at a time when Congress and the President are focusing on expanding coverage while “bending the curve,” i.e., holding down the rate at which costs are rising. It is not mere coincidence that the new data were made public the day after the President addressed Congress and the nation on the topic of health reform, emphasizing the need for covering more people more thoroughly.

Because employment-based health insurance accounts for the largest share of all coverage (58.5 percent in 2008), there is a clear relationship between jobs and insurance coverage. The expectation is that a 1 percent rise in unemployment results in a decrease of about 1 percentage point in the rate of employer-sponsored insurance for both adults and children. Between 2007 and 2008, however, this expectation was not fully borne out: unemployment rose more than one percent (from 4.6 to 5.7 percent) while the rate of employer-sponsored insurance decreased by only .8 percent (from 59.3 to 58.5 percent) during the same period.

The rise in the total number of uninsured was not more pronounced because government stepped in to cover some of the emerging gaps. The number of people covered by private health insurance decreased by fully one million, and their share dropped from 67.5 percent in 2007 to 66.7 percent in 2008. These declines were more than offset by an increase in the number of those relying on government health insurance, which rose from 83.0 to 87.4 million between 2007 and 2008. As a result, the proportion of those with government-funded coverage rose from 27.8 percent to 29.0 percent during the same period.

Public options – Medicaid, Medicare, military health care, the Children’s Health Insurance Program (CHIP), and individual state health plans – were instrumental in mitigating a more marked rise in the uninsured. Medicaid beneficiaries, for example, rose by 3 million; in 2008, 9.8 percent had no coverage other than Medicaid for the entire year. Medicare increased by 1.4 million beneficiaries. And CHIP made a definite dent in the number of uninsured children, which went down from 11.0 percent and 8.1 million in 2007 to 9.9 percent and 7.3 million in 2008. This represents a marked improvement in the coverage of children; indeed, the uninsurance rate and the number of uninsured children are the lowest since 1987, the first year comparable health insurance data were collected.

These data confirm what other economic indicators suggest: a growing proportion of employers are finding it too expensive to offer health coverage to their employees and public financing of care is playing a more prominent role in health coverage. Moreover, even those who have insurance are struggling to meet medical expenses because of higher premiums, less coverage, and heftier deductibles or co-payments.

As in previous years, those who perceive themselves as being at lower risk of illness may opt to go without coverage. As a result, young adults between the ages of 18 and 34 represent the largest proportion of the uninsured, accounting for 40.9 percent of those without coverage.

The breakdown by race and ethnicity shows that the increase in the uninsured was experienced differentially by each demographic group. Among whites, the number of uninsured rose by 800,000 and the percent, from 10.4 to 10.8 percent. Among Hispanics, which are the most likely to lack coverage, the number of uninsured remained statistically the same, but the percent decreased from 32.1 to 30.7 percent. For Blacks, the rate and number of uninsured was almost the same as the prior year, at 19.1 percent and 7.3 million. For Asians, the uninsurance rate went from 16.8 to 17.6 percent between 2007 and 2008, a slight rise that was not considered statistically different.

The proportion of the uninsured has a marked income gradient: fully 24.5 percent of those with a household income of less than $25,000 were uninsured, and this proportion declined as income rose. Among those with a household income of $75,000 or more, 8.2 percent were uninsured.

Because each state has its own characteristics, resources, and ways of addressing health coverage, the percentage of uninsured varies greatly across the country. State-specific rates indicate that Massachusetts has the lowest proportion of uninsured (2.6 percent) while Texas has the highest (28 percent).

The most recent numbers reflect both the results of the status quo as well as the salutary impact of public-sponsored health care. As unemployment rises and more employers are unwilling or unable to offer coverage to their employees, the number of uninsured is likely to rise even further. The 2008 data on the uninsured do not reflect the full impact of a recession which caused the unemployment rate to rise from 5.7 to 9.4 percent between 2008 and 2009. And in many cases the safety net is already overloaded or too frayed to catch those who are not covered. Public Citizen therefore continues to advocate for a single-payer that would cover everyone and pool our resources, using the system’s bargaining power to achieve fairer, more efficient delivery of care. The current debate, dispiriting as it often is, is an opportunity to make our voices heard. Public Citizen urges our readers and members to support a single-payer system in which services are based on health need rather than corporate greed.