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Record-High Uninsured Rate Fuels Partisan Feud over Health Care

By Rebecca Adams. CQ HealthBeat Associate Editor

September 16, 2010 -- The percentage of people living in the United States without health insurance rose to 16.7 percent in 2009, the highest rate since the Census Bureau began collecting data in 1987 and an increase of 1.3 percentage points over 2008 levels, according to a report released Thursday.

The previous record high was 15.8 percent, a rate reached in 1998 and 2006.

Census Bureau officials attributed much of the decline to the economic downturn as people lost full-time jobs that came with health coverage and then either remained unemployed or were forced to take jobs without benefits.

The number of people with health insurance actually fell for the first time since the bureau began analyzing health insurance data. The number of people who did not have insurance rose above 50 million for the first time — to 50.7 million in 2009. That's up from 46.3 million in 2008.

The decline would have been more precipitous if Americans had not been able to move into such government health programs as Medicaid, the federal-state health program for the poor; the State Children's Health Insurance Program, for the low-income children not eligible for Medicaid, and Medicare, the federal program for the elderly and people with disabilities.

President Obama said the children's health program "helped inoculate our children from the economic distress experienced by their parents, as there was little change in the percentage of children without health insurance." Obama added that the health care law (PL 111-148, PL 111-152) he signed in March "will build on that success by expanding health insurance coverage to more families."

The percentage of people covered by employment-based insurance continued to fall and hit the lowest rate in 22 years, going from 58.5 percent in 2008 to 55.8 percent in 2009.

However, the percentage of people covered by government programs —30.6 percent — was the highest since 1987. Medicaid accounted for a significant share of those government-provided benefits, reaching 15.7 percent of people in the United States.

Divergent Interpretations

Lawmakers and interest groups seized on the stark numbers to argue for their differing viewpoints on the law, which Obama signed in March.

Democrats and their allies said the numbers underscore the need for the law, which aims to expand both government-provided and employer-sponsored coverage.

"Last year, too many Americans lost their health insurance because of egregious insurance company abuses," said Senate Finance Committee Chairman Max Baucus, D-Mont. "The increase in uninsured Americans last year is clear evidence of how critical it was to to take action to protect patients, and that's exactly what the Affordable Care Act will do."

In the short term, the federal government is subsidizing coverage for people with pre-existing medical conditions and who have been without insurance for six months. The law also includes a tax credit that will temporarily help some small businesses and offers government subsidies to companies that provide retiree insurance for people who are not eligible for Medicare.

Starting in 2014, the law will require most individuals to buy insurance, will provide subsidies for low-income and some middle-class people, and will create health exchanges which will market policies under federal rules requiring minimum benefit levels.

"The health reform law will make a difference for tens of millions of people without insurance who will finally be able to afford quality health coverage," said House Ways and Means Health Subcommittee Chairman Pete Stark, D-Calif. "Republicans who want to repeal health reform have a message for them: You're on your own."

Republicans said they had a better way of handling the problem of the uninsured.

"The Republican alternative bill not only reduced the cost of insurance but reduced the number of uninsured,'' said Jim Billimoria, House Ways and Means GOP spokesman.

The Congressional Budget Office found that by 2019 under the Republican health care plan, "the number of nonelderly people without health insurance would be reduced by about three million relative to current law, leaving about 52 million nonelderly residents uninsured."

The GOP also said that some of the uninsured may be choosing to go without coverage, pointing to a 2009 study by former Congressional Budget Office director June E. O'Neill that said about 43 percent of those without policies could probably have afforded to buy them.

The census statistics showed that people were more likely to be uninsured as their incomes declined. About 26.6 percent of people whose annual household income was below $25,000 were uninsured, according to the bureau's report. At the same time, 9.1 percent of those in households with annual incomes of $75,000 or more did not have health coverage.

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