Private coverage on the decline

WHEN IT COMES to insurance, the latest figures from the U.S. Census Bureau show 2009 was a year of superlatives, and none of them good.

The "Income, Poverty and Insurance Coverage in the United States: 2009" report shows the most uninsured, the highest number of people covered by government-sponsored programs and the lowest rate of employer-sponsored insurance since the bureau began tracking insurance data in 1987.

"People who follow this closely were surprised by just how big the increase was," says John Holahan, director of the Health Policy Center at the Urban Institute, noting that the ranks of the uninsured grew by 4.4 million, leaving 16.7% of Americans without coverage.

Holahan says high rates of joblessness only partly explain the trend. Rising premiums are likewise contributing to the problem. A recent employer survey by the Kaiser Family Foundation found that while premiums have increased an average of 114% during the last decade, the percentage of the premium paid by employees has increased 147%.

"Lower income employees are less likely to take up the coverage when an employer offers it because they can't afford the premium," he says.

As employer-sponsored coverage dropped last year, coverage by public plans increased. The number of Americans on Medicaid grew by 5.2 million last year to 47.8 million. More than three out of every 10 (30.6%) Americans now receive coverage through a government-funded insurance program, including 15.7% who receive coverage through Medicaid.

The new report shows the pain was widely distributed. Virtually every geographic and demographic group-with the exception of children-showed an increase in the uninsured rate. Regionally, the Midwest and South were particularly hard hit. In the Midwest the rate of uninsured climbed to 13.3% from 11.6% while the rate soared to 19.7% from 18.2% in the South.

Although reforms may bring respite for many, Jonathan Oberlander, professor of social medicine and health policy at the University of North Carolina, Chapel Hill, notes that relief is four years away. If the number of uninsured continues to rise as drastically as it did in last year and the employer-sponsored system continues to fray, healthcare reform finance projections could be off the mark.

The University of Chicago also cautions that measurements of poverty have their limitations. They do not account for the taxes people pay, the tax credits they receive or in-kind benefits such as housing assistance. Such credits and transfers have expanded more rapidly than other income sources in recent decades.

Measures do not account for geographic differences in living costs either. Yet if poverty levels continue to be markers for health-insurance subsidies, these measures might come up for debate.

-Shelly Reese

Commentary is independent of source data