Number of Uninsured Hits New High, Census Shows
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GWEN IFILL: Today’s new census report boils down the health care affordability crunch into cold, hard numbers. The number of Americans without health insurance keeps rising, but last year so did household income. Here to discuss the reasons why and the policy implications of these findings is Susan Dentzer of our Health Unit. The unit is a partnership with the Robert Wood Johnson Foundation.
So, Susan, a 5 percent increase in the number of uninsured, why?
SUSAN DENTZER, NewsHour Health Correspondent: Gwen, what we see is that, five years into an economic recovery and expansion since the recession of 2001, and six years of rising health uninsurance numbers, we see that basically what’s happening is the performance of the economy and workers’ wages and what’s going on in health insurance are wildly different tracks.
Health insurance premiums are still rising about 7 percentage points a year; that’s more than double workers’ wages and more than double the rate of inflation. So what’s happening is that health insurance is becoming increasingly unaffordable for many Americans. Concomitant with this, many businesses are dropping health insurance coverage because they find it unaffordable.
GWEN IFILL: So it’s unaffordable for Americans and for the people who they work for?
SUSAN DENTZER: Exactly, for businesses who are in many cases providing, contributing towards that coverage. In fact, in this most recent set of data, we see that fewer than 60 percent of workers now are covered by employer-provided insurance, 59.7 percent.
So what’s happening is that health insurance is becoming more expensive, less affordable. Employers are dropping coverage. And as a consequence, what we see out the other end is 2.2 million more Americans uninsured in the most recent year, a total of almost 9 million more Americans now uninsured since 2000.
Affordability problems remain
GWEN IFILL: But the same time, in the same report we hear that household income has gone up. So doesn't that make it more affordable?
SUSAN DENTZER: Well, it's gone up modestly. The real median income rose in the most recent period measured -- again, this was from 2005 to 2006 -- by 1.1 percent to $48,500. But again, a 1 percentage point real increase in incomes doesn't come anywhere near making a 7 percent compounded rate of growth of health insurance more affordable for families.
And in particular, we see this happening now, not just in low-income households, where it's very difficult to afford -- the average family health insurance policy now is pretty close to $12,000 a year. Imagine a family earning $48,500 affording $12,000 a year. But when you look even higher up the income scale, 1.4 million of the people who became uninsured in this most recent period had incomes of $75,000 and more, household incomes.
So it says that even higher-income families now are having enormous difficulty affording insurance and likely to be working for employers who are dropping coverage.
Rise in uninsured children
GWEN IFILL: We've had quite a few discussions here at this table about children's insurance, the degree to which children are increasingly uninsured because state programs are being -- at least there's a big debate going over what should happen to these state programs. Does this report tell us anything new about the number of children who are insured or not?
SUSAN DENTZER: Yes, and it gives more bad news. Last year, we saw the number of uninsured kids rise by 400,000 for the first time in a number of years. The rate had been falling. This year, we see almost another 700,000 kids on top of that have lost coverage in the most recent period.
So, in effect, at a time when we've been trying to cover more and more kids through Medicaid and S-CHIP, the State Children's Health Insurance Program, those efforts obviously have not borne enough fruit. And, in fact, as you say this plays right into the debate that we've been having here in Washington around the expansion and the renewal of the State Children's Health Insurance Program.
The strain of obesity
GWEN IFILL: Another report out today -- and I wonder if there's a cause and effect here -- it's about obesity, the growing amount of obesity in America. And I wonder whether obesity feeds -- poor health care feeds increased health costs, which contributes to the number of people being uninsured. Is there a continuum there?
SUSAN DENTZER: There's definitely somewhat of a link. And, in fact, that report from the Trust for America's Health shows that, in 31 states in the last year, the number of people, obese people actually rose, and in fact in no state at all did the numbers decline. And in one, here in the District of Columbia alone, almost 23 percent of children are considered to be obese.
But what the connection is -- and some health economists have begun to look into this -- is we not only spend more to treat people who are obese because they have very costly conditions, very frequently diabetes, but that's been a real contributor to the rate of growth of spending. And, in fact, one analysis suggests that as much as 27 percent of increase in health spending from 1987 on has been due to the rising rate of obesity.
Activity at state, federal levels
GWEN IFILL: So if there's a solution, if there's a government-driven solution to this, how much of it has got to be -- is playing out on the state level, say, and how much of it on the federal level, if at all?
SUSAN DENTZER: Well, there's a lot of activity now on both levels. And, again, to go back to what's been happening with the State Children's Health Insurance Program, again, this is the combined federal and state program that was set up in 1997 to cover low-income children, basically children who are in families where somebody's working, if not both parents working, but the families don't earn enough to afford coverage.
Just over the course of the summer, the House and the Senate both passed bills to renew and expand that program somewhat, pick up more uninsured kids. The White House vowed to veto it, mainly over cost. But the bulk of the debate is over whether there should be private insurance coverage or public insurance coverage, and if you expand public health insurance programs at all on the federal or state level or in a combined program like S-CHIP, you essentially whittle away at the number of people who have private coverage in a phenomenon known as crowd-out.
And as a consequence, there's this very bitter debate over the course of the summer. The administration just issued rules a couple of weeks ago that will make the debate even more heated, because essentially now the administration has done an end-run around some of this discussion and essentially waded in and said that, when states get above a certain level of income, they will not, in effect, be able to offer coverage through the State Children's Health Insurance Program to kids.
GWEN IFILL: And now new numbers to throw into the mix. Susan Dentzer, thanks a lot.
SUSAN DENTZER: Thanks, Gwen.