What to Look for Tomorrow When the Census Bureau Releases the Uninsured Numbers for 2010
Over the Past Decade, There Have Been Three Major Trends: Will They Continue?
On Tuesday, September 13, the U.S. Census Bureau will release data about the number of Americans who were uninsured in 2010. The following Families USA backgrounder provides a context for tomorrow’s Census Bureau report by describing three dominant trends in insurance status over the past decade. For each trend, the backgrounder provides historical data as well as future prospects for the continuation of that trend:
Trend #1: Over the past decade (2000-2009), there has been huge erosion in the portion of the American population that has employer-sponsored health insurance.
Between 2000 and 2009, the portion of the population with job-based health insurance has diminished from 64.2 percent to 55.8 percent – a significant drop of 8.4 percentage points. Although the American population grew from 279.5 million to 304.3 million in that time period, the number of people with employer-sponsored health insurance dropped from 179.4 million to 169.7 million – a decline of nearly 10 million.
The decline in employer coverage has been driven in large part by the rapid and substantial increase in health insurance premiums. Between 2000 and 2009, the average cost of family premiums for job-based health coverage more than doubled, rising from $6,438 to $13,375. As a result, more and more employers – especially those running small businesses – have found it unaffordable to provide health coverage, and there has been a steady increase in the number of workers who work on a contractual basis without job-based health coverage.
Two key provisions of the Affordable Care Act (ACA), which go into effect in 2014, will mitigate the erosion of employer-sponsored health coverage. First, on a nationwide basis, the ACA will enable small businesses with 50 or fewer employees to purchase health coverage for their workers through new marketplaces called “exchanges;” in some states, small businesses with 100 or fewer employees will be able to purchase such coverage through the new marketplaces. This will enable small employers to gain the cost benefits from economies of scale and will reduce administrative hassles and costs associated with searching for health coverage.
Second, small businesses with fewer than 25 employees and average annual wages of less than $50,000 will qualify for tax credits. Across the country, there are nearly 4.8 million businesses that employ 25 or fewer workers. By 2014, the tax credits will increase to a maximum of 50 percent of employers’ costs for employee health coverage.
Trend #2: Medicaid and the Children’s Health Insurance Program (CHIP) have played heroic roles this past decade in protecting workers and their families who have lost employer-sponsored health insurance coverage.
Between 2000 and 2009, the number of Americans enrolled in these safety-net health programs rose from 29.5 million to 47.8 million people. As a result, the portion of the population covered through those programs rose from 10.6 percent to 15.7 percent. Well over half (56.2 percent) of this increase was among children. The number of children enrolled in Medicaid or CHIP rose from 15.1 million to 25.3 million.
The future of this heroic role by public safety-net programs will depend on budget debates in Washington. The Republican budget proposal, which was introduced by House Budget Committee Chairman Paul Ryan and passed by the full House of Representatives, would convert the Medicaid program to a block grant – with $771 billion in reduced federal Medicaid funding to states over the next ten years. Other proposals, which would result in cutbacks of a lesser amount, could also shift costs to fiscally challenged states and could result in severe cuts in the number of people state Medicaid programs cover.
Trend #3: The number of uninsured Americans has increased steadily and significantly over the past ten years – so much so that, in 2009, the number of uninsured exceeded the combined population of 25 states* plus the District of Columbia.
Between 2000 and 2009, the number of uninsured Americans grew from 38.4 million to 50.7 million – an increase of more than 12 million. During this period, the proportion of Americans who went without health insurance rose from 13.7 percent to 16.7 percent, more than one out of every six people in the United States.
When key elements of the ACA are implemented in 2014, this trend is expected to be radically reversed – and the overwhelming majority of uninsured people should gain health coverage. Beyond the improvements for small businesses wishing to provide employer-sponsored health insurance, the ACA accomplishes this mainly through two changes: first, it will provide sliding-scale tax-credit subsidies to people and families purchasing private health coverage through the exchanges if their incomes are below 400 percent of the federal poverty level ($74,120 in annual income for a family of three in 2011); and second, it will expand nationwide Medicaid eligibility to 138 percent of the federal poverty level ($25,571 for a family of three).
These health coverage-related changes are likely to expand health coverage by tens of millions of uninsured people after the ACA is fully implemented.
*Alaska, Arkansas, Connecticut, Delaware, Hawaii, Idaho, Iowa, Kansas, Kentucky, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.
Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan, and its mission is to secure high-quality, affordable health coverage and care for all Americans.
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