TOPICS > Health

Number of Americans without Health Insurance Hits Record High

August 30, 2006 at 6:30 PM EST
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RAY SUAREZ: Americans took home slightly larger paychecks last year for the first time in six years, but the number of those living below the poverty line remained about the same. The U.S. Census Bureau released that information and other key economic indicators yesterday in its annual snapshot of economic health.

The good news? The 1 percent rise in median household income outpaced the rate of inflation for the first time since 1999. The median rose to $46,000; it’s still behind where it was in 1999.

But the new numbers don’t mean individual salaries are rising. Instead, census researchers said a big reason was more people working per household.

DAVID JOHNSON, U.S. Census Bureau: A lot of this is the factors of a lot of new workers coming in, and they have lower earnings than the median. You could have secondary earners in the household that provide additional household income.

RAY SUAREZ: The data also showed the poverty rate didn’t increase, for the first time in five years. Thirty-seven million people, or about one in eight Americans, live below the poverty line. For African-Americans that rate is even higher, one in four; and for Latinos, one in five.

The survey also revealed one other piece of significant news: The number of uninsured Americans rose by more than 1 million people, including by more than 360,000 children, to 46 million. It was the first rise in the number of uninsured children in years, and an overall increase of 7 million uninsured Americans since 2000.

For a closer look at the growing numbers of the uninsured, I’m joined by our health correspondent, Susan Dentzer.

And, Susan, unemployment has remained low. Household income ticked up slightly. So why that increase in the number of uninsured?

SUSAN DENTZER, NewsHour Health Correspondent: Ray, I think what it says is that having a job in America is increasingly becoming detached from the question of whether or not you have health insurance.

We see now, as you said, economic recovery since 2001 has created numbers of new jobs. But, in fact, it hasn’t necessarily translated into more coverage for many people and, in fact, quite the opposite.

We see employment-based coverage continuing to crumble, and that’s the real story of the rise in the health un-insurance numbers that were released yesterday, that the number of people who became uninsured, 1.3 million, the driving force behind that was the loss of employer-based coverage in the private coverage market.

RAY SUAREZ: Is there such a thing as a typical uninsured person? Or has a lot of that growth come from one kind of worker?

SUSAN DENTZER: Well, what we’ve known for a long time is that four out of five people without health insurance are workers or in families where somebody is working full time. So the vast majority of the uninsured have, for a long time, been working people, primarily lower paid people, and also, to a large degree, Hispanics and, to a lesser degree, blacks.

But what we saw most recently — and in 2005, the numbers released yesterday bear this out — increasingly we’re seeing also a loss of coverage in households and families earning $50,000 a year and more, in the middle class. And so that shows that the loss of coverage really is hitting a broad swath of American workers.

It’s tending to be workers who are working for small businesses, people who are working in kind of cyclical-driven industries that go up and down with the economy. But by and large, it’s hitting a broad swath of workers. And the driving force behind that is the cost of health insurance coverage.

The costs

RAY SUAREZ: Well, you talk about this affecting even higher than the median-income workers. If they wanted to buy their own health insurance, what are we talking about as the cost to buy health insurance?

SUSAN DENTZER: The average health insurance premium for a family now exceeds $11,000 a year. It's higher than the earnings that you could earn, earning a minimum-wage job. It's about a quarter of that median family income, so it's a huge, huge dent in the pocketbook.

And it's because of that rising cost that so many businesses are dropping coverage. Just since the year 2000, according to a survey done by the Kaiser Family Foundation, we've lost about -- it's gone from about 69 percent of employers offering coverage to their workers. We're now down to about 59 percent, just in the period since 2000.

And, again, the reason by and large has been the cost of health insurance. Although the cost is growing now at a lower rate than it was earlier in this decade, it's still growing annually at about two to three times the rate of inflation overall.

And for some small businesses, premiums can still go up 20, 30, 40 percent a year. That's pushing a lot of businesses out of the business of offering health insurance to their workers. And to the degree they pass those costs along to workers, sometimes workers are passing up the coverage that is offered to them by their firms.

RAY SUAREZ: Now, even with those rising costs, if you look at where the action has been on answering the needs of the uninsured, in state legislatures and national government, there's been a lot of emphasis on children, yet this time we saw 361,000 more children uninsured. Why?

SUSAN DENTZER: And that's exactly what makes these numbers so troubling to so many people. Since 1997, as you said, when we enacted the State Children's Health Insurance Program, coverage has mostly been growing for kids. The deliberate efforts on the parts of states to reach out to low-income families and pull children into both SCHIP coverage, as it's known -- State Children's Health Insurance Program -- and Medicaid.

What seems to have happened in the last couple of years is that states have reversed that. There are fewer outreach efforts; there are more barriers being erected to enrollment of people in those programs.

In some instances, it's cost -- there are deliberate efforts to make it harder to re-enroll once you're already enrolled in the programs. So the net effect seems to be pushing people, children in particular, who are qualified for these programs out.

And that's especially troubling, because we know that there are probably 4 or 5 million uninsured children still out there who are qualified for these programs but not enrolled. So to the degree we're adding to the pool of people that are qualified but not enrolled, it's a serious problem.

Underinsured

RAY SUAREZ: Now, the questions that researchers ask to get these numbers are kind of yes-no, stop-go kind of questions. You either had coverage or you didn't. Does that capture also what's happening in the broader market where people are getting less coverage, a different kind of coverage because of the kind of cost changes for employers that you're talking about? Are a lot of people insured, but not insured the way they used to be?

SUSAN DENTZER: Yes, is the answer to that. That's not evident in this survey. This survey doesn't ask questions about type of coverage.

We know from lots of other data that there's a broad problem of underinsurance in the country. Even people who have coverage may have coverage that doesn't cover as much as ideally it should. And there are other issues like that.

What this does speak to, though, is: Do you have coverage or do you not? There's some sense that maybe this particular survey overstates the degree to which people are uninsured. And there is some statistical data that suggests that.

But by and large, what this is telling us is that, at any given point in time, in 2005 for sure, we know, roughly speaking, 46 million Americans, almost 47 million Americans, were without health insurance.

RAY SUAREZ: Susan Dentzer, thanks for being with us.

SUSAN DENTZER: Thanks, Ray.