K. Davis, Changing Course: Trends in Health Insurance Coverage, 2000–2008, Hearing on "Income, Poverty, and Health Insurance Coverage: Assessing Key Consensus Indicators of Family Well-Being in 2008," Joint Economic Committee, U.S. House of Representatives, September 10, 2009.
This morning, the U.S. Bureau of the Census released the alarming news that the number of uninsured Americans hit 46.3 million in 2008, up from 45.7 million in 2007. This increase of 0.6 million uninsured would have been much worse without a growth in government-provided health insurance that covered 4.4 million people, including an increase of 3.0 million covered under Medicaid. In contrast, employment-based coverage declined by about 1.1 million individuals, from 177.4 million in 2007 to 176.3 million in 2008.
Today’s data release shows the importance of the nation’s safety-net insurance system—Medicaid and the Children’s Health Insurance Program (CHIP). The major bright spot in these new data was the fact that the rate of uninsured children is at its lowest rate since 1987, at 9.9 percent. This improvement was a reflection of increased coverage for children under government health insurance programs, which rose from 31.0 percent in 2007 to 33.2 percent in 2008. Still, more than 7.3 million children remain uninsured, which highlights the importance of the reauthorization and expansion of the CHIP program earlier this year to cover 4 million more uninsured low-income children.
States have also played an important role in stepping up to the plate to address the issue of the uninsured. Massachusetts, which enacted health reform in April 2006, has moved into first place, with the lowest uninsured rate in the nation. In Massachusetts, 5.5 percent of the population was uninsured in 2008, compared with 25.1 percent in Texas, the state with the highest uninsured rate. Massachusetts leads the nation as a result of its 2006 comprehensive health reform.
The most alarming news in today's Census release is that the number of adults under age 65 without health insurance is high and rising: 20.3 percent of adults ages 18 to 64 were uninsured in 2008, up from 19.6 percent in 2007, representing an additional 1.5 million adults. About one million fewer people are covered by employment-based coverage, falling from 177.4 million in 2007 to 176.3 million in 2008, including a marked decline in coverage among part-time workers. But even these numbers may understate the effect of the severe and ongoing recession, because the Census numbers are based on counts of people without coverage at any point during the year. Those individuals who were insured early in 2008 who lost coverage later in the year are counted as insured for 2008.
The continued rise in unemployment rates in 2009 likely means many more are uninsured in 2009.
Since the start of this decade, when 38 million were uninsured, health insurance coverage has steadily eroded, with 20 percent jump in the number of uninsured over the decade. Even before this severe recession, the number of uninsured was projected to grow to 61 million by 2020. We simply cannot afford to continue on our current course.
The need for health reform is urgent and compelling:
The health insurance system in this country is fundamentally broken. It does not accomplish what insurance was created to accomplish: ensure access to needed care and protect against the financial hardship that medical bills can cause. The deterioration in health insurance coverage has reached the point where financial hardship is not the exception, but the rule.
As a nation, we pay a price for being the only major country without health insurance for all. Workers miss work from preventable illness, die from conditions that are amenable to medical care, or retire early from preventable disability. Children miss school or drop out of high school without graduating because of preventable health problems. The Council of Economic Advisers estimates that covering the uninsured would result in a net increase in economic well-being totaling $100 billion a year. Coverage for all would increase the labor supply and level the playing field for large and small businesses.
Recognizing the seriousness of our flawed health system, Congress began to take action early this year to cover more people who are at high risk. Reauthorization of the Children’s Health Insurance Program (CHIP) will cover an estimated 4.1 million uninsured low-income children in addition to the 7 million covered in 2008. The CHIP program has been a major success: trends in the numbers of uninsured children, unlike those for uninsured adults, have improved over the last decade.
Provisions in the American Recovery and Reinvestment Act of 2009 (ARRA) have also helped prevent the loss of health insurance coverage resulting from the severe and sustained economic recession. The Act provided $86.6 billion over 27 months to help states maintain and expand Medicaid enrollment as more unemployed working families qualified for coverage. In addition, ARRA provided a 65 percent premium subsidy to help recently unemployed workers retain their employer-based coverage under COBRA for up to nine months.
Measures in health reform bills currently under consideration in Congress include:
The Congressional Budget Office estimates that if the House bill is enacted, the number of uninsured people would decline to 17 million by 2019, from a projected 54 million if no action were taken. Employer-sponsored plans would remain the primary source of insurance for most families, covering 60 percent of the population, or 166 million people. About 10 million people would newly enroll in Medicaid, with most of those individuals previously lacking any coverage.
Recognizing the plight of families facing an unraveling safety net of health insurance coverage, the President last night reiterated his call for bold change to address the crushing burden of rising health care costs for both businesses and families. Failure to act will lead to greater and greater numbers of Americans without adequate, affordable insurance—unable to obtain the care they need, with families struggling under the weight of rising health insurance premiums and out-of-pocket health care costs. Insurance premiums have risen from 11 percent of family incomes in 1999 to 18 percent today. If we continue on our current course, they will reach 24 percent of income by 2020.
Health reform could provide substantial relief to families by slowing the growth in health insurance premiums, and could make the responsibility for paying premiums a shared one among households, employers, states, and the federal government. Estimates prepared for The Commonwealth Fund suggest that the average family could save $2,300 in 2020 from comprehensive health reform that embraces competition and choice.
The comprehensive reforms proposed by the President will help spark economic recovery, put the nation back on a path to fiscal responsibility, and ensure that all families are able to get the care they need while protecting their financial security. The cost of inaction is high. The time has come to take bold steps to ensure the health and economic security of this and future generations. Health reform is an urgently needed investment in a better health system and a healthier and economically more productive America.