Drop in Health Coverage During Recession Continues Decade-Long Trend

Between 2007 and 2009, with increasing unemployment and workers losing their employer-provided health coverage, along with declining incomes, the number of uninsured non-elderly Americans increased from 45 million to 50 million, according to a new report.

The report, in the journal Health Affairs [1], also examines changes in health insurance coverage over the past decade and found that even in years of economic growth, the number of uninsured climbed as more and more employers dropped health coverage [2] for their workers.

The study, by John Holahan of The Urban Institute [3] for Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU [4]) also found that while the number of children with health coverage grew, even as employer-provided insurance declined, most of that was due to increased coverage by Medicaid and the Children’s Health Insurance Program (CHIP).

Throughout the past decade, even in good economic times, the number of Americans with employer-sponsored insurance has fallen, and the number of uninsured Americans has increased. This finding underscores the importance of planned coverage expansions under the Affordable Care Act.

Looking at the 2007 to 2009 period, here are a few of the key findings:

• The number of non-elderly Americans insured through employers declined from 164.5 million to 156.2 million; much of this was because of job loss and movement from full-time to part-time work or unemployment.
• For adults, only some of this loss in insurance was offset by added public coverage; the number of uninsured adults increased by 5.6 million.
• The proportion of children covered through employer-sponsored coverage also declined, but this change was offset by increases in Medicaid and CHIP coverage. As a result, the number of uninsured children actually fell.

Holahan also found that more than 60 percent of the newly uninsured were Caucasian Americans and only a very small share were not citizens. The largest percentage increase in the uninsured occurred in the Midwest, where the loss of manufacturing jobs contributed to higher unemployment rates and the loss of health coverage.

He says the new health care reform law; the Affordable Care Act, will address many of these issues, and largely end the link between employment loss and insurance coverage, but not until 2014, when many of the act’s provisions take effect. Until then, he says:

It t is likely that employer-sponsored insurance will continue to decline because premiums will almost certainly grow faster than wages and salaries and the number of uninsured people is likely to increase.

Click here [5] for the full article.

The paper was released in conjunction with a public briefing co-sponsored by KCMU and the Alliance for Health Reform [6] that examined the impact of the economic downturn on health insurance coverage trends. You can view a webcast of the briefing and find links to related materials here [7].