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The number of Americans without health insurance fell last year, but treat it as an aberration. Expect a spike this year and next. The latest figures from the U.S. Census Bureau show that the percentage of people without health insurance in 2007 was 15.3% (45.7 million people), down from 15.8 % in 2006 (47 million people).
The overall numbers hide the real story: a continuing decline in the number of people covered by their employer-based insurance. That percentage decreased to 59.3% in 2007 from 59.7% in 2006. The difference was made up by the states pumping money into government programs such as Medicaid and the State Children's Health Insurance Programs (SCHIP). Many states, flush with budget surpluses in 2007, expanded their programs that year. The number of people on Medicaid, for example, jumped from 38.3 million in 2006 to 39.6 million in 2007. But that's a temporary phenomenon. The Census report is based on 18-months-old data from before the economy slowed, the housing bubble burst and food and energy prices hit the roof, says Paul Fronstin of the Employee Benefits Research Institute. Dozens of states cut back on government programs for the poor this year as the slow economy crimped revenue.
"The problem is that this blip-up in investment in public programs is not sustainable as economic growth slows and pressures on state budgets intensify," says Mark Goldberg of the National Coalition on Health Care, a coalition of employers, unions, providers, insurers and patient advocacy groups. Deep cutbacks in many states' health programs have already been announced this year and more are expected before the year is out.
Plus the downward trend in employer-based coverage is far from over. "In fact, the erosion will likely accelerate," says Goldberg. As health care premiums continue to escalate, an increasing number of employers will drop coverage or require workers to contribute more. Workers, who've already seen their out-of-pocket share of costs double between 2000 and 2007, may find they can no longer afford to participate in their employer's plan.
The trends highlighted in the report are sure to fuel the health care reform effort. Both presidential candidates have plans to reform health care. The Democratic nominee, Sen. Barack Obama, would require all big employers provide coverage or pay into a plan and parents would be required to insure their children. Republican Sen. John McCain would provide tax credits to individuals to buy insurance in the private market as well as subsidies to low-incomers with preexisting health conditions.
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