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Institute of Medicine (US) Committee on Health Insurance Status and Its Consequences. America’s Uninsured Crisis: Consequences for Health and Health Care. Washington (DC): National Academies Press (US); 2009.

Cover of America’s Uninsured Crisis

America’s Uninsured Crisis: Consequences for Health and Health Care.

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2Caught in a Downward Spiral

Abstract: This chapter examines the dynamics underlying the continuing decline in health insurance coverage. Health care costs and insurance pre miums are growing at rates greater than the economy and family incomes. Employment has shifted away from industries with traditionally high rates of coverage (e.g., manufacturing) to service jobs (e.g., in wholesale and retail trades) with historically lower rates of coverage. In some industries, employers have relied more heavily on jobs without health benefits, includ ing part-time and shorter-term employment, and contract and temporary jobs. Overall, fewer workers, particularly among those with lower wages, are offered employer-sponsored coverage and fewer among those offered insurance can afford the premiums. For many individuals and families without employer-sponsored group coverage, nongroup coverage is pro hibitively expensive. With a severely weakened economy and rising health care costs, some states will face pressures to cut their recent expansions of public programs for low-income children and adults. Large increases in unemployment will further fuel the decline in the number of people with employer-sponsored coverage and put additional stress on state Medicaid and State Children’s Health Insurance Programs (SCHIP) programs.

A number of ominous signs point to a continuing decline in health insurance coverage in the United States. Health care costs are rising, increases in health insurance premiums outpace the limited growth of typical family incomes, continuing changes in the workplace diminish the availability of employer-sponsored health insurance (ESI), unemployment is climbing, and severe pressures on state budgets threaten to reverse the recent expansion of public coverage for children and adults (Baicker and Chandra, 2006; Bernstein, 2008; Chernew et al., 2005; Dorn et al., 2008; Gould, 2007; Holahan and Cook, 2008; Reschovsky et al., 2006; Smith et al., 2008). This chapter begins with a brief description of the uninsured population and then explores the forces underlying current trends in private and public health coverage.


Sources of Health Insurance

The workplace has been the source of health coverage for several generations of Americans. Today, most privately insured people continue to be insured through their job or the job of a family member (Figures 2-1 and 2-2). However, since around 2000, ESI coverage has been on the decline. Among adults, ESI coverage dropped by 5 percentage points between 2000 and 2007, from 69.3 percent to 64.3 percent. ESI coverage of children also fell during this time period—from to 65.9 to 56.8 percent—but the decline was offset by rising enrollment in Medicaid and the State Children’s Health Insurance Program (SCHIP). During this period, many states expanded eligibility, ramped up outreach, or streamlined application processes to expedite eligible children’s enrollment in these public health insurance programs (Coughlin and Zuckerman, 2008; Smith et al., 2008).

FIGURE 2-1. Percentage of U.


Percentage of U.S. children under age 18 with employment-based coverage, Medicaid or SCHIP coverage, and uninsured, 2000-2007. *SCHIP = State Children’s Health Insurance Program. Children who are otherwise eligible for Medicaid or have other insurance (more...)

FIGURE 2-2. Percentage of U.


Percentage of U.S. adults ages 18-64 with employment-based coverage, Medicaid or SCHIP coverage, and uninsured, 2000-2007. *SCHIP = State Children’s Health Insurance Program. Adults are generally not eligible for SCHIP, but several states have (more...)

Approximately 2.9 percent of the nonelderly population is insured through the TRICARE or CHAMPVA2 military-related health insurance programs (Fronstin, 2008a).

Only a small proportion of the population purchases private health insurance outside the job setting. In 2007, an estimated 6.8 percent of the nonelderly population had individually purchased health insurance coverage. This percentage has been relatively steady for more than a decade (Fronstin, 2008a).

Who Are the Uninsured?

In 2007, there were 45.7 million people without health insurance in the United States, 5.9 million more than when the IOM issued its initial report on uninsurance in 2001 (Box 2-1) (DeNavas-Walt et al., 2008; IOM, 2001). This includes 36.8 million nonelderly adults—nearly 1 in 5—and 8.1 million children—more than 1 in 10 (Table 2-1). These recent estimates show a small increase in the number and percent of Americans with health coverage from 2006 to 2007. However, the source of the increase was not a strengthening of private health insurance, but an expansion in government health insurance programs, including Medicaid, Medicare, and military health care. From 2006 to 2007, the proportion of the nonelderly adult population enrolled in a government-sponsored health plan increased from 27.0 percent to 27.8 percent (DeNavas-Walt et al., 2008). During the same period, the proportion of the population in a private health insurance plan fell from 67.9 percent to 67.5 percent. The decline in private coverage occurred in both employment-based and direct-purchase health plans.

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BOX 2-1

Estimates of the Uninsured U.S. Population from Leading Federal Surveys. There is no question that tens of millions of people in the United States are uninsured, but there is some confusion about what appear to be conflicting counts of the uninsured population. (more...)

TABLE 2-1. Number and Rate of Uninsurance Among Children and Adults, 2007.


Number and Rate of Uninsurance Among Children and Adults, 2007.

Uninsurance affects a broad swath of American households—as it did when the IOM first studied the topic. The uninsured population includes poor and middle-income people, members of one- and two-income families, white and black people, non-Hispanics and Hispanics, native-born and naturalized citizens and undocumented immigrants, children, adolescents, young adults, people reaching middle age, people approaching retirement, and early retirees. Statistics on the age, race and ethnicity, immigration status, household income, and work status of the uninsured, nonelderly population are presented in Appendix B .

Some low-income children and adults are eligible, but not enrolled in a public health insurance program (Table 2-2). Overall, an estimated 15.9 percent of the uninsured population is eligible for Medicaid or SCHIP health coverage (AHRQ Center for Financing Access and Cost Trends, 2008).

TABLE 2-2. Comparison of the Uninsured and General U.S. Population Under Age 65 by Selected Categories, 2005.


Comparison of the Uninsured and General U.S. Population Under Age 65 by Selected Categories, 2005.

Most uninsured people in the United States are citizens. A substantial percentage of the uninsured population is made up of lower- to middle-income U.S. citizens who are not eligible for Medicaid or SCHIP. In 2005, citizens—with annual family incomes less than three times the federal poverty level (FPL) and ineligible for Medicaid or SCHIP—made up 41.4 percent of the uninsured population, but only 26.8 percent of the general population. Some citizens—adults without children—are more likely to be uninsured because eligibility for public support is often linked with having a child.

Hispanics (of any race) and blacks are disproportionately uninsured compared to their numbers in the overall population. In 2007, blacks3 made up 13.3 percent of the general population, but 16.7 percent of the uninsured population (DeNavas-Walt et al., 2008).

The Hispanic population was most likely to be uninsured. Hispanics made up 15.4 percent of the population but almost one-third (32.3 percent) of the uninsured population. Job differences explain some but not all of the disparity. Hispanic workers have the lowest rate of employer-sponsored coverage of any racial or ethnic group (Gould, 2008). In 2007, 67.4 percent of Hispanics over the age of 15 were in the civilian labor force, only slightly more than the overall population (U.S. Census Bureau, 2008).4 Yet many Hispanic workers are employed in industries associated with low wages and limited health benefits, such as sales, building and grounds cleaning and maintenance, and food preparation and serving (Kochhar, 2005).5 Rutledge and McLaughlin analyzed 20 years of pooled SIPP data to assess the trends in uninsurance among Hispanics (Rutledge and McLaughlin, 2008). They found that the decline in coverage among Hispanics occurred among both U.S. born and immigrants and was primarily driven by a decrease in private coverage.


Rising Costs Are Driving the Decline in Health Insurance Coverage

Most analysts agree that rising health care costs are the principal force driving the declines in health insurance coverage (Chernew et al., 2005; Cooper and Schone, 1997; Holahan and Cook, 2008). Health care costs—in both the private and public sectors—have been growing faster than the overall economy for decades. In 2006, health care spending averaged $7,026 per person in the United States (Catlin et al., 2008; Centers for Medicare & Medicaid Services Office of the Actuary, 2008b).

From 2000 to 2006, per capita health care spending grew by 47 percent compared to the 34 percent increase in gross domestic product (Centers for Medicare & Medicaid Services Office of the Actuary, 2008c). The trend is expected to continue (Congressional Budget Office, 2008; Ginsburg, 2008; Paulson et al., 2008; U.S. Government Accountability Office, 2008). The Centers for Medicare & Medicaid Services projects that total U.S. health care spending will almost double between 2008 and 2017 (Keehan et al., 2008).

Employer-Sponsored Insurance

Health insurance has been associated with the workplace ever since the 1930s when it was introduced as a fringe benefit of employment (Moran, 2005). However, the rapid growth in health care costs has made it increasingly difficult for employers to offer health coverage for their workers. In addition, many workers with access to ESI have found it increasingly difficult to pay the employee premiums associated with taking up their employers’ offers of coverage (Chernew et al., 2005; Cooper and Schone, 1997; Fronstin, 2008a; Holahan and Cook, 2008; U.S. Government Accountability Office, 2008).

Chernew and colleagues analyzed the decline between 1989 to 1991 and 1998 to 2000 in ESI in two cohorts of nonelderly Americans living in 64 large metropolitan statistical areas (Chernew et al., 2005). The researchers concluded that the rising cost of health insurance premiums was the principal factor underlying the decline in health insurance, leading to their conclusion that uninsurance will increase further if, as expected, health care costs continue to outpace income growth.

Growth in health insurance premiums for ESI coverage has far outpaced wage growth and family incomes. Between 1999 and 2008, the cumulative rate of increase in family premiums (119 percent) was substantially greater than the increase in workers’ earnings (34 percent) (Kaiser Family Foundation and Health Research & Educational Trust, 2008a,b). Many employers and workers are finding that premiums are simply unaffordable. In 2005, nearly three-quarters of uninsured workers reported that they had declined employers’ offers of employer-sponsored health insurance because of the high cost (Fronstin, 2008a).

As shown in Figure 2-3, the average annual single and family premiums for an employer-sponsored plan more than doubled from 1999 to 2008 (Kaiser Family Foundation and Health Research & Educational Trust, 2008a). Premiums for single individuals increased from $2,196 in 1999 to $4,704 in 2008, while family premiums increased from $5,791 in 1999 to $12,680 in 2008.

FIGURE 2-3. Average annual premiums for single and family employer-sponsored coverage, 1999-2008.


Average annual premiums for single and family employer-sponsored coverage, 1999-2008. *Estimate is statistically different from estimate for the previous year shown (p < 0.05).

The aging of the so-called baby boom generation is likely to exacerbate the rising costs of health care (Congressional Budget Office, 2008). Many people born between 1946 and 1964 are now reaching the age when serious health problems emerge, the need for health care heightens considerably, and medical expenses climb. In 2007, 13.1 percent of 50- to 64-year-olds were uninsured—7.1 million individuals (Table 2-3) (Economic Research Initiative on the Uninsured, 2008). The rate of uninsurance among 50- to 64-year-olds is lower than most other age groups, but it is rising at a faster rate than other age groups. And, this is occurring as the sheer size of this population group reaches historic levels. Recent trends in employer-sponsored retiree health coverage are a contributing factor. In a 2008 survey, the Kaiser Family Foundation and Health Research & Education Trust found that large employers are increasingly unwilling to sponsor retiree health benefits for new employees (Kaiser Family Foundation and Health Research & Educational Trust, 2008a). Overall, fewer employers offer retiree ben efits than in the past and, when retiree health benefits are offered, it is with higher premiums and higher patient cost sharing (Fronstin, 2008b).

TABLE 2-3. Changes in the Number and Percentage of Uninsured People in the Nonelderly U.S. Population by Age Group, 2000-2007.


Changes in the Number and Percentage of Uninsured People in the Nonelderly U.S. Population by Age Group, 2000-2007.

Lower- and Middle-Income Workers

The rising cost of coverage is particularly burdensome for lower-income workers. Although employees’ percentage share of ESI premiums has been stable, average employee premium costs have increased steadily. Between 1999 and 2008, the average annual employee premium contribution for family coverage rose from $1,543 to $3,354 (Kaiser Family Foundation and Health Research & Educational Trust, 2008a). Shen and Long studied the decline in ESI between 1999 and 2002—a period encompassing both economic growth and recession—in order to determine whether the downward trend in coverage was related to decreasing offers from employers or to increasing numbers of employees deciding not to take up offers of coverage (Shen and Long, 2006). They found that, in 2002, both changes were occurring—workers with family incomes lower than twice the FPL were far less likely to be offered an ESI plan than higher income workers earning two to four times the FPL (55.4 percent vs. 78.6 percent) and lower-income workers were less likely to take up an employer’s offer of coverage (75.5 percent vs. 83.7 percent).

An analysis of data from MEPS provided to the committee by the AHRQ Center for Financing, Access, and Cost Trends indicates that the take-up of ESI coverage among lower-wage workers continued to decline through 2005 (AHRQ Center for Financing Access and Cost Trends, 2008; Cooper and Schone, 1997). Family take-up rates dropped from 75.8 percent in 1996 to 66.8 percent in 2005 for workers earning $7.00/hour or less and dropped from 86.1 percent in 1996 to 82.4 percent in 2005 for workers earning between $7.01/hour and $10.00/hour. Many middle-income workers, although not as vulnerable as lower-income workers, are also at risk of losing employer-sponsored coverage. In the Shen and Long study described above, both low- and middle-income workers experienced a 3 percentage-point drop in ESI coverage from 1999 to 2002 (Shen and Long, 2006).

The Changing Workplace

The American workplace has undergone significant change in the last decade. Since 2000, the occupation, firm size, and industry mix has changed; the gender and age distribution of the labor force has changed; and the importance of part-time, part-year, and contractual workers has changed (Bernstein and Shierholz, 2008; Gould, 2007; Haas and Swartz, 2007; Holahan and Cook, 2008; Reschovsky et al., 2006; Shen and Long, 2006). Health insurance coverage varies substantially across these different job categories, so these changes in job mix may have profound implications for health insurance coverage.

As shown in Table 2-4, the percentage of private sector workers covered by their employer’s health plan varies markedly by occupation, firm size, and industry. In each year between 2002 and 2007, workers’ coverage by their employer varied by at least 46 percentage points between industries, 32 percentage points between white collar and service workers, and 34 percentage points between large firms (500 or more employees) and small firms (less than 25 employees) (Gould, 2007, 2008). In 2007, for example, private sector employer coverage of white collar workers was more than double the rate for service workers, at 61.9 percent and 29.5 percent, respectively. The contrast between industries was similarly stark. More than 70 percent of mining and manufacturing workers were enrolled in their employer’s health plan compared to less than 30 percent of agriculture, forestry, fishing, hunting, arts, entertainment, recreation, accommodation, and food service workers.

TABLE 2-4. Percentage of Private Sector U.S. Workers with Access to and Coverage by Their Employers’ Health Insurance, by Occupation, Firm Size, and Industry, 2000-2007.


Percentage of Private Sector U.S. Workers with Access to and Coverage by Their Employers’ Health Insurance, by Occupation, Firm Size, and Industry, 2000-2007.

Table 2-4 also shows that the trends in private sector health insurance coverage differ by occupation, firm size, and industry. In all types of occupations (white collar, blue collar, service, and other), the percentage of private sector workers with ESI coverage was lower in 2007 than it was in 2000 (Gould, 2007, 2008). For blue-collar workers, however, the 5.0 percentage point decline between 2000 and 2007 exceeded the declines for white collar workers (3.0 percentage points) and service workers (4.4 percentage points). From 2000 to 2007, workers in firms of all sizes experienced declines in coverage, but the greatest decline (4.0 percentage points) occurred among workers with jobs in small firms.

The majority of states have enacted laws to promote small firms’ access to small group health insurance coverage. From 1991 to 1996, for example, every state except Alaska, Michigan, and Pennsylvania enacted legislation to reform the small group health insurance market in some way (Simon, 2005). The reforms included various approaches, alone or in combination, such as limits on the methods insurers may use to set premiums for small group plans, requiring guaranteed issue of small group coverage, allowing insurers to sell “bare bones” small group coverage to first time buyers, limiting preexisting condition exclusions, and enhancing portability. There is no evidence, however, that the states’ efforts have had a substantial positive impact (Simon, 2005, 2008).

Fewer Jobs with Health Benefits—More Part-Time and Short-Term Jobs

Rising health insurance premiums increase the ranks of both the uninsured and the unemployed. In addition, the compositions of the workplace and the workforce have undergone significant change (Bernstein and Shierholz, 2008; Gould, 2007; Haas and Swartz, 2007; Holahan and Cook, 2008; Reschovsky et al., 2006; Shen and Long, 2006). Employers have increasingly replaced permanent, full-time jobs with contract, part-time, and temporary positions that do not come with health benefits. In an analysis of the impact of rising health insurance premiums on the labor market, Baicker and Chandra concluded that increasing premiums contribute to higher unemployment, reduced hours worked, and the greater likelihood that workers are employed part-time rather than full-time (Baicker and Chandra, 2006). The researchers estimated that a 10 percent increase in health insurance premiums reduces workers’ likelihood of employment by 1.2 percentage points, reduces hours worked by 2.4 percent, and increases the odds of workers being employed only part-time instead of full-time by 1.9 percentage points.

Shen and Long’s research suggests that low-wage workers are particularly at risk of uninsurance because only a small proportion (13 percent) of them have a spouse with access to ESI (Shen and Long, 2006). Because of the high cost of nongroup coverage, there are limited options for those workers not offered ESI. Particularly worrisome is that adults who decline offers of ESI are likely to remain uninsured and are more likely to be in poor health with high-cost medical conditions (Bernard and Selden, 2006; Glied and Mahato, 2008).


People without access to ESI, other sources of group health insurance, or public insurance must turn to the nongroup health insurance market if they want to obtain health insurance. In 2007, only 6.8 percent of the nonelderly U.S. population was covered by a nongroup health insurance policy (Fronstin, 2008a). This percentage has been relatively steady for more than a decade, fluctuating between 6.5 percent and 7.2 percent. Meanwhile, the ranks of the uninsured have increased. Some state and federal regulations have been put in place to help promote access to nongroup coverage, but current data limitations undermine research to assess the outcome of the regulations (Simon, 2008).6

Access to nongroup health insurance coverage is highly dependent on individuals’ circumstances and geographic location. Since states regulate the nongroup insurance market and health care costs vary substantially by location, the premiums for nongroup insurance policies are highly dependent on where one lives. Regardless of location, however, the premium costs for nongroup coverage can be exceedingly high because the individual subscriber pays the entire cost without a contribution from an employer. Moreover, health insurers typically subject applicants for individual policies to underwriting (i.e., assessment of their health status and recent use of services) if they want coverage (Merlis, 2005). Individuals who apply for nongroup health insurance may be denied a policy because they or a family member have a preexisting condition or are employed in occupations viewed as high risk. In most states, the insurer may deny coverage completely, impose either a permanent or temporary preexisting condition limitation on coverage, or charge a higher premium based on health status, occupation, and other personal characteristics.

Individual medical insurability also depends on how recently one has been covered by a group health plan. Applicants with recent group coverage have some protections under the federal Health Insurance Portability and Accountability Act (HIPAA) (P.L. No. 104-191).7 For example, HIPAA guarantees access to continued coverage for individuals with recent ESI coverage who change or lose jobs. HIPAA rules allow the states to specify some of the key terms of coverage (Kaiser Family Foundation, 2008). Most states offer HIPAA-eligible residents who are quoted high premiums access to a state high-risk pool; but the coverage can be expensive, include high cost-sharing requirements, and offer only limited benefits. HIPAA’s rules do not protect individuals from future increases in premiums. As a consequence, someone who suffers serious medical condition or trauma may be charged extremely high premiums (Pauly and Lieberthal, 2008).

Beyond HIPAA-related rules, a few states have regulations that are designed to promote access to nongroup coverage by requiring guaranteed issue of nongroup policies, limits on preexisting condition exclusions, and caps on premiums (see Appendix C for details by state on regulations addressing access to individual health insurance policies). Six states, for example, require that all insurers offer all applicants a health policy regardless of health status: Maine, Massachusetts, New Jersey, New York, Vermont, and Washington (Kaiser Family Foundation, 2008). An additional six states have an insurer of last resort, Blue Cross Blue Shield, which must offer everyone a policy: District of Columbia, Michigan, North Carolina, Pennsylvania, Rhode Island, and Virginia. However, guaranteed issue requirements do not provide limits on the cost of policies—so, many are unaffordable.


It is possible that additional millions of low-income Americans would be uninsured today were it not for recent state and federal efforts to expand coverage. As noted previously, states and the federal government have substantially increased health coverage among low-income children and to a lesser degree among adults in the last decade, by expanding eligibility, conducting outreach to people already eligible, and expediting enrollment in Medicaid and SCHIP. And, as this report was being finalized, Congress reauthorized the SCHIP program (P.L. No. 111-3).

Every state has implemented an SCHIP program (Centers for Medicare & Medicaid Services Office of the Actuary, 2008a). The primary beneficiaries of SCHIP programs have been children, particularly those with family incomes between 100 percent and 200 percent of the FPL. State SCHIP programs have targeted benefits to these children because their family income is too high for them to qualify for Medicaid, but too low for their parents to afford private family health insurance coverage. According to estimates based on the NHIS, rates of uninsurance among children in low-income8 families fell by more than one-third between 1997, the year before SCHIP was implemented, and 2005 (Ku et al., 2007). Recently, many states have moved to further expand enrollment in publicly subsidized programs. Between 2006 and 2007, 35 states enacted expansions in Medicaid or SCHIP eligibility for children and/or adults (Table 2-5). In 2008, 10 states implemented or authorized eligibility expansions for children (Ross and Marks, 2009).

TABLE 2-5. States Expanding Publicly Subsidized Coverage to Children or Adults, 2006-2007.


States Expanding Publicly Subsidized Coverage to Children or Adults, 2006-2007.

It is now clear that some states may be unable to sustain recent expansions in Medicaid and SCHIP given the severity of the current economic crisis. During the last economic downturn, some states restricted enrollment procedures that led to steep declines in children’s enrollment (Ross and Marks, 2009). When states face budget gaps, they must cut expenditures, raise taxes, or dig into state reserves. As of January 2009, state budget shortfalls were projected to total $350 billion through fiscal year 2011. At the time this report was being drafted, many states forecast budget deficits and were either putting expansion plans on hold or considering cuts to their Medicaid and SCHIP programs (Dorn et al., 2008; Johnson et al., 2009; Smith et al., 2008).

Nevertheless, states appear committed to the programs, especially with respect to expanded eligibility. As this report was prepared, few states had acted to reverse eligibility expansions for Medicaid or SCHIP (Johnson et al., 2009; Smith et al., 2008). Most states are looking for savings in a variety of other areas, such as provider reimbursements, pharmacy controls, and benefit reductions, or new sources of revenue such as patient cost-sharing and increasing the cost of premiums. Only two states reported new limits on eligibility for public insurance in 2008: Rhode Island lowered the maximum income eligibility for parents from 185 percent to 175 of the FPL (Ross and Marks, 2009), and Maine established a waiting list for SCHIP coverage and froze enrollment for childless adults (Smith et al., 2008).

The U.S. Department of Labor announced in January 2009 that 2.6 million jobs had been lost in 2008 (U.S. Bureau of Labor Statistics, 2009). By the end of December 2008, the U.S. unemployment rate had reached 7.2 percent, bringing the total number of the unemployed to 11.1 million. Numerous studies show that rising unemployment, which causes people to lose their employer-based health insurance coverage, as well as to experience reductions in family incomes, leads to a rising demand for Medicaid and SCHIP coverage. Dorn and colleagues, for example, used 1990 to 2003 state-level data from the CPS and other sources to estimate the impact of unemployment on health insurance coverage. The researchers concluded that a 1 percentage point rise in the national unemployment rate would increase Medicaid and SCHIP enrollment by 1 million (assuming no cutbacks in eligibility) (Dorn et al., 2008). In addition, they found that a 1 percentage point rise in the national unemployment rate would increase the uninsured population by 1.1 million.

As shown in Figure 2-4, three states—Maine, Massachusetts, and Vermont—have enacted and are implementing plans to achieve universal health coverage (Kaiser Commission on Medicaid and the Uninsured, 2008). In Massachusetts, 439,000 previously uninsured individuals had obtained health insurance as of March 2008. In Maine, 23,000 individuals and more than 725 small business had obtained coverage through Maine’s initiative, “Dirigo Choice,” as of February 2008. Vermont began implementation of “Catamount Health” in October 2007, and 5,704 individuals had enrolled as of September 2008. As this report was drafted in late 2008, an additional 14 states had reform plans under way: California, Colorado, Connecticut, Illinois, Iowa, Kansas, Minnesota, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Washington, and Wisconsin (Figure 2-4). The downturn in the U.S. economy is likely to stymie many states’ efforts to expand public health insurance coverage. In California, for example, the state assembly approved ambitious legislation to expand coverage in 2007, but soon after, the state senate rejected the bill.

FIGURE 2-4. States moving toward comprehensive health care reform.


States moving toward comprehensive health care reform. SOURCE: Kaiser Commission on Medicaid and the Uninsured (2008). This information was reprinted with permission from the Henry J. Kaiser Family Foundation. The Kaiser Family Foundation is a nonprofit (more...)


Health insurance coverage has declined over the last decade despite increases in public program coverage, and will continue to decline. There is no evidence to suggest that the trends driving loss of insurance coverage will reverse absent concerted action. Rising health care costs and a severely weakened economy threaten not only employer-sponsored coverage, the cornerstone of private health coverage in the United States, but also threaten recent expansions in public coverage despite the recent reauthorization of SCHIP. Health care costs and insurance premiums are growing substantially faster than the economy and family incomes. Employment has shifted away from industries with traditionally high rates of coverage (e.g., manufacturing) to service jobs (e.g., in wholesale and retail trades) with historically lower rates of coverage. In some industries, employers have begun to rely more heavily on jobs without health benefits, such as part-time and shorter-term employment and contract and temporary jobs. Overall, fewer workers, particularly among those with lower wages, are offered employer-sponsored coverage and fewer among them can afford the premiums. And, early retirees are less likely to be offered retiree health insurance benefits than in the past. For many people without employer-sponsored health insurance, nongroup coverage is prohibitively expensive or unavailable. Some states are under extreme economic pressure to cut their recent expansions of public programs for low-income children and adults. Sharp increases in unemployment will further fuel the decline in the number of people with employer-sponsored coverage and add even greater stress on states’ Medicaid and SCHIP programs.


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Because nearly 98 percent of the U.S. adult population over age 64 has health insurance coverage through Medicare or other sources (DeNavas-Walt et al., 2007), this chapter focuses on trends in coverage for the nonelderly population. References in the text to “adults” refer to 18- to 64-year-olds; “children” refers to the under-18 population.


TRICARE is a health benefits program sponsored by the Department of Defense for military retirees and families of active duty, retired, and deceased service members. CHAMPVA refers to the Civilian Health and Medical Program for the Department of Veterans Affairs, a program for disabled dependents of veterans and certain survivors of veterans.


Includes multiracial blacks and blacks of Hispanic and non-Hispanic origin.


This compares with 64.4 percent of the total U.S. population over age 15 in the civilian labor force.


For additional research on health insurance trends in the Hispanic population, also see: Buchmueller et al. (2007); Fronstin (2008a,b); Hargraves (2004); Holahan and Cook (2005).


The Kaiser Family Foundation maintains a website with extensive information on state and federal rules for the nongroup market (Kaiser Family Foundation, 2008).


Individuals eligible for coverage under HIPAA regulations are guaranteed the right to purchase individual coverage with no preexisting condition exclusion periods when they leave group coverage. To be eligible, the individual must have at least 18 months of prior coverage, uninterrupted by more than 63 consecutive days. The last day of prior coverage must be in a group plan and, upon leaving group coverage, the individual must elect and exhaust any available COBRA (Consolidated Omnibus Budget Reconciliation Act) continuation coverage or similar state continuation coverage. See Kaiser State Health Facts for more information about individual market guaranteed issue: http://www​.statehealthfacts​.org/comparetable​.jsp?cat=7&ind=353.


Low income in this analysis was defined as less than 200 percent of the FPL.

Copyright 2009 by the National Academy of Sciences. All rights reserved.
Bookshelf ID: NBK214976


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