Analysis: Census finds more uninsured

By OLGA PIERCE, UPI Health Business Correspondent   |   Aug. 29, 2006 at 6:59 PM

WASHINGTON, Aug. 29 (UPI) -- Some 46.6 million Americans now lack health insurance coverage, and as the employer-based system erodes, government safety-net programs are increasingly picking up the slack, according to Census data released Tuesday.

Between 2004 and 2005 the number of uninsured individuals increased by almost 16 percent over the initial 45.3 million level, while the number of people with coverage increased by 1.4 million to 247.3 million, resulting in no net change in the overall insurance rate of 15.7 percent.

The rate of employment-based health insurance -- which covers 174.8 million, making it the largest source of insurance -- declined from 59.8 percent to 59.5 percent. Meanwhile, the number of people covered by government health programs increased between 2004 and 2005, from 79.4 million to 80.2 million, indicating that families that lose coverage through their jobs are finding their way onto government programs.

"The stability in the overall coverage rate can be explained by an increase in government coverage, notable Medicaid and the State Children's Health Insurance Program that offset a decline in employer-based coverage," David Johnson, chief of the U.S. Census Bureau's Housing and Household Economic Statistics Division, said at a news conference announcing the results.

Medicaid is a joint federal-state program that offers healthcare coverage for very low-income children, parents, senior citizens and people with disabilities. The State Children's Health Insurance Program, known as SCHIP, is a state-administered program that is majority-funded by the federal government covering children, and sometimes parents, whose family incomes are slightly high to qualify for Medicaid.

Despite some earlier indications that the level of childhood uninsurance had leveled off, in part because of SCHIP, more children -- especially those living in poverty -- lacked coverage in 2005. During 2004, the number of uninsured children increased from 7.9 million to 8.3 million, and the uninsurance rate for children living in poverty increased to almost one in five.

Though there was little change in the rate of uninsurance in any race, the data revealed that access to health coverage remains starkly unequal. About 11 percent of non-Hispanic whites are uninsured, while 19.6 percent of black respondents and 32.7 percent of Hispanics lack coverage. The rate for Asians, however, showed a statistically significant increase from 16.5 percent in 2004 to 17.9 percent in 2005.

Based on a three-year average from 2003 to 2005, 29.9 percent of people who reported American Indian and Alaska Native as their race were without coverage, and the rate for Native Hawaiians and other Pacific Islanders was 21.8 percent.

Regionally, there were 19.8 million uninsured people in the South, compared to 12.4 million in the West, 7.8 million in the Midwest and 6.7 million in the Northeast.

The census data was taken from the bureau's Current Population Survey.

Experts from across the political spectrum agree that the current piecemeal approach is failing to shore up the nation's crumbling health insurance system, but are divided over possible solutions, some calling for a government-run universal healthcare system, others urging Bush administration-backed solutions like tax credits.

"What this really means is (uninsurance) is not only affecting low-income Americans, but insurance for all Americans is eroding," Georges Benjamin, executive director of the American Public Health Association, told United Press International.

Uninsurance leads to a number of public health problems like higher rates of cancer, cardiovascular disease, disability and infant mortality, he said, when people do not receive preventative care.

Such health problems can be financial disasters for households without insurance, and that disaster could spread throughout the healthcare system when uninsured individuals seek uncompensated care at clinics and hospitals, Benjamin said. "Individuals will show up sicker and at a higher cost.

"This is the worst news we've had all year," he said. "Our nation is not secure if we're not healthy."

The solution, he said, is to create a national system of universal coverage. "We have had failed leadership on healthcare coverage. We need someone to put a plan on the table now.

"This country has the capacity to make sure all Americans have health insurance. We ought to make a commitment to do it and we ought to do it now."

The increase in uninsured children is troubling because it indicates that the government safety-net programs that have been softening the blow of decreased employer-based coverage are nearing the breaking point, Kathleen Stoll, director of health policy at Families USA, a healthcare consumer advocacy group, told UPI.

State Medicaid and SCHIP programs, whose budgets are increasingly strained, have been imposing additional paperwork and cost-sharing burdens on low-income families, and that may account for the fact that more children lack coverage, Stoll said.

"States really need more of a commitment from the federal level to help cover the uninsured," she said.

Overall, the greater number of uninsured individuals is also very alarming she said. "The number is greater than the combined populations of 24 states plus the District of Columbia."

There is currently a cycle of uninsurance as uncovered individuals seek uncompensated care, the cost of which makes uninsurance more difficult to afford, which in turn increased the number of uninsured, Stoll said. "There's a tremendous need to break that cycle."

Getting insurance coverage to everyone who needs it is one way to do that, she said, but it will not come cheap and resources will need to be committed. "There is going to be no free lunch here, covering people costs money."

The federal government has been reluctant to commit resources to programs like Medicaid and SCHIP but is considering an estate tax cut that could reduce federal revenue by tens of billions of dollars each year, she said. "We have to -- once and for all -- find the political will in this country to commit resources to covering everyone."

The new census figures "confirm that today's patchwork system doesn't work for all working Americans" Nina Owcharenko, a senior health policy researcher at the conservative Heritage Foundation, told UPI.

The employer-based system, she said, is obsolete because of the increased mobility of today's workers, and the data show that.

But instead of a nationalized system, a better idea would be to move toward an individual-based system, she said. "A majority of Americans still have private health insurance, and anything that undermines that is a move in the wrong direction."

President Bush's proposed solution of offering tax credits for the purchase of health insurance and healthcare would be a move in the right direction, Owcharenko said.

It is troubling, however, that at the moment it appears public programs are absorbing the individuals who leave the private health-insurance system, she said. "The uninsured are a very diverse groups of people -- they're not just poor. Public programs were not necessarily intended for working-class Americans and states are pretty much at capacity for what they can do.

"We need to find out what we can do to help working Americans buy health insurance."

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