Uninsured Rate Soars, 50+ Million Americans Without Coverage

By Phil Galewitz and Andrew Villegas
KHN Staff Writers
Provided by Kaiser Health News

Related Resources – Report: Income, Poverty, and Health Insurance Coverage in the United States: 2009

In a reflection of the battered economy, the number of people without health insurance rose sharply last year to 50.7 million — an all time high — according to data released Thursday by the Census Bureau.

That pushed the rate of uninsured Americans to 16.7 percent last year from 15.4 percent in 2008, when there were 46.3 million uninsured. It was one of the largest single year increases since the Census starting tracking the figure in 1987.

Nearly every demographic and geographic group posted a rise in the uninsured rate — with the exception of children, who remained stable at about 10 percent. The sharpest jumps were in the Midwest and South, although all areas of the country saw increases.

“In a word this is devastating,” said Jonathan Oberlander, professor of social medicine and health policy at the University of North Carolina-Chapel Hill.

Both Democrats and Republicans hoped to gain public support from the new figures. The surge in the uninsured could help Democrats gain more support for the new health overhaul law because it underscores the need for dramatically changing the health system. But at the same time, Republicans calling for repeal of that law can use the report to blame Democrats for failing to fix the economy.

“Though not surprising, the uninsured numbers do indicate the role of the dismal economy,” said Joseph Antos, a health policy expert from the conservative American Enterprise Institute. “Health insurance is really secondary to the economy.”

Although in the short term the report could hurt Democrats, the higher number of uninsured should make it harder for Republicans to talk about repealing the health law, said Oberlander.

“From a political standpoint,” he said, “the report makes the administration’s and Democrats’ point that the status quo is not sustainable and underscores why you needed to do something to stabilize insurance.”

The health law approved in March mandates that nearly all Americans have health insurance. It would provide coverage to 32 million more Americans starting in 2014 as the state-federal Medicaid program is expanded and lower-income people get government subsidies to buy coverage through new insurance exchanges or marketplaces.

The jump in uninsured last year reflects the worsening recession, which started in 2008 but ravaged the economy in 2009. The unemployment rate rose to 9.3 percent in 2009 from 5.8 percent in 2008.

“A lot of it is due to changes in people’s employment status as people moved from full time to part time and from working to not working,” said David Johnson, chief of the housing and household economic statistics division at the Census Bureau.

Analysts said they were not surprised by the big increase in uninsured.

“We’ve reached yet another milestone in the number of uninsured,” said Peter Cunningham, senior fellow at the Center for Studying Health System Change, an independent, nonpartisan think tank. “It’s not surprising because it’s being driven almost entirely by a big drop in people with private coverage and employer-sponsored coverage.”

The percentage of people covered by employer-sponsored coverage dropped to 55.8 percent last year from 58.5 percent in 2008.

The Census report showed there were 43.6 million people in poverty in 2009, up from 39.8 million in 2008 — the third consecutive annual increase.

“The numbers are heartbreaking,” said Sara Rosenbaum, a professor of health law and policy at George Washington University. “If we needed any more evidence of the absolute imperative of health reform, this is it.”

Indeed, the reliance in America on an employer-based delivery system for health coverage means that the population is susceptible to such explosions of the number of uninsured when unemployment increases, Rosenbaum added. Often, Medicaid — meant to provide coverage for the nation’s poor — can’t cover many of these newly uninsured, she explained, because strict qualifications exclude many middle class families who lose their jobs and take unemployment benefits.

And it may not get better anytime soon. Rosenbaum said that there will probably be at least one more year with “terrible” health insurance numbers as the economy lags and employers continue to lay workers off.

The report also found that nearly a third of Americans — about 93 million — are now covered by government insurance, mainly Medicare and Medicaid. While the numbers of people on Medicare remains stable, the percentage of people covered by Medicaid, the federal-state program for people with low incomes, rose from to 15.7 percent of Americans from 14.1 percent. Nearly 48 million Americans are in Medicaid programs.

Given the sharp divide in public opinion of the new health law, many Democrats have been reluctant to talk about the health law on the campaign trail. That probably won’t change, even with these new figures, said Ross Baker, a professor of political science at Rutgers University.

“They’re not going to go back to it. If they’ve run [from the new law in their campaigns] they’re not going to pull a U-turn and embrace it.” And voters, Baker said, are unlikely to be more receptive to health reform now because they still simply don’t understand what it means for them.

Indeed, the other danger for Democrats going into November’s midterm elections is that “any bad stat is going to reflect poorly on the incumbent,” Baker said.

Amber Hergen, 34, of Los Angeles, is one of those Americans who lost coverage last year. She left her publicity job at a marketing company, where she had insurance, to pursue her dream of becoming an actress. She’s been unable to find affordable individual coverage.

She learned the risk of being uninsured last month when she went to the emergency room after accidentally ingesting a household cleaner. Though she was at the hospital less than an hour, her bill was $2,500.

“Being without insurance is kind of like walking on a tightrope without a net,” she said. “It’s scary.”

This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.