HealthBiz: Economy fuels uninsured numbers

By ELLEN BECK, United Press International  |  Aug. 26, 2004 at 3:32 PM
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WASHINGTON, Aug. 26 (UPI) -- It's the economy -- because the latest numbers on the uninsured in America, released Thursday by the U.S. Census Bureau, were not as high as some analysts had feared and they can be tied to a weak 2003 economy.

Republicans will spin that 1 million more people got health insurance in 2003 and the Democrats will counter that 1.4 million more people lost coverage and they both will be right. Republicans will point to the success of the Bush tax cuts in stimulating the economy and Democrats will point to those same cuts and say they shortchanged the economy's ability to generate jobs.

Paul Fronstin, a researcher at the Employee Benefit Research Institute in Washington, told UPI's HealthBiz the most important thing to look at is the percentage change -- the ranks of the uninsured grew from 15.2 percent of the population in 2002 to 15.6 percent in 2003 -- because the actual numbers are driven by population growth. It is possible all 1.4 million people who joined the uninsured in 2003 were due to population growth -- but that is not the case.

That four-tenths of a percent, Fronstin said, represents an increase rate "a little slower than in 2001-2002 ... but not much different that in the past. We've been seeing a half-percent increase -- give or take -- on a year to year basis," he noted.

Daniel Weinberg, the Census Bureau's chief of Housing and Household Economic Statistics, told reporters in releasing the numbers the uninsured rate from 1987 to 1998 either stayed the same or went up, peaking at 16.3 percent in 1998. After that, the rate dropped two years in a row and then bottomed out at 14.2 percent in 2000. Since then, it has been moving up again.

An e-mail from Karen Davis, president of the Commonwealth Fund, pointed out the increase in uninsured is mostly among adults and "the vast majority work."

"The numbers of uninsured workers increased from 25.7 million to 26.6 million from 2002 to 2003 -- an increase of close to 1 million uninsured working Americans," she added.

The employment factor hits at the crux of the statistics. People lost jobs in a struggling 2003 economic recovery and therefore lost health insurance.

"If they found a new job, it probably didn't come with insurance or it came with insurance and maybe it cost too much to buy into," Fronstin suggested.

There also has been a move away from manufacturing jobs -- historically good benefit providers -- and fewer smaller companies offered employees health benefits in 2003.

Jared Bernstein of the Economic Policy Institute in Washington told HealthBiz, in response to a question during a briefing on the numbers, "a jobless recovery is all over these results."

He said the weak labor market is a factor -- and a public safety net that increasingly relies on work -- along with problems in job quality, which affects benefits such as insurance.

Weinberg said the rates are "mostly explained by the decline in coverage from employment-based plans, partially offset by increases in government coverage."

Employment-based health coverage fell by nine-tenths of a percent while participation in Medicare and Medicaid increased by the same amount. The number of poor children added to Medicaid was the chief part of that program's seven-tenths of a percent growth.

It also is important to understand why people are uninsured. Are people -- unemployed or working -- too poor to afford coverage or, as the National Center for Policy Analysis in Dallas contends, do some -- perhaps the younger and healthier -- simply choose not to spend their money on insurance?

Over the past 10 years, an NCPA statement reads, "Households that earn $50,000 per year or more account for about 90 percent of the increase in the number of uninsured ... and almost two-thirds of that has occurred among households earning more than $75,000 per year."

On the other hand, the Commonwealth Fund's studies find in 2003, 41 percent of adults reported problems paying medical bills or medical debt they had accumulated over the past three years.

Robert Greenstein, executive director of the Center on Budget and Policy Priorities, said the Census Bureau data show the number of extremely poor people in the United States increased in 2003 by 1.2 million to 15.5 million and 43 percent of the poor had incomes below half of the poverty level. Much of the poverty increase was among children, however -- which is noted in the Medicaid numbers.

Median U.S. household income also has declined since 2000 -- by more than $1,535 per year -- while at the same time health insurance premiums, co-pays and deductibles have risen. The unemployed trying to purchase health insurance on the private market often find it far too expensive to afford.

"The bulk of this is the economy, but (it is also) the result of unwise policy choices," said Greenstein, who criticized the Bush tax cuts as taking the money away from other economic stimulus programs.

Health and Human Services Secretary Tommy Thompson's statement on the uninsured defended the Bush agenda, but admitted "the president knows more needs to be done, particularly when it comes to lowering the cost of healthcare so that it is accessible to more people."

More needs to be done -- but how to do it and include the bulk of the uninsured is a national dilemma.

Bush has asked Congress to approve association health plans to allow small businesses to use purchasing pools to offer insurance to workers. He supports expanding the health savings account program and wants tax credits to help people pay for health insurance. Analysts have estimated the Bush proposals in all might help 6 million to 8 million of the uninsured get coverage. HSAs have been a surprising success, early results show, and may boost that number. The tax credits alone are pegged at costing $70 billion over 10 years.

Democratic presidential candidate John Kerry also has proposed tax credits, expansion of Medicaid eligibility and a system where people can buy into an insurance program similar to what is offered to federal workers. Estimates are that possibly 27 million uninsured could potentially be covered but the cost ranges from around $650 billion to almost $900 billion over 10 years -- depending on who is doing the analysis.

From a policy standpoint, the only proposals that come close to covering all of the uninsured would require some type of insurance mandate or national coverage system -- and Congress is no where near close to that debate.

For now, the candidates have pieces of solutions, but in the end it may be their economic proposals that are more important to the uninsured than the health policies themselves.



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