August 28, 2008

Crisis of the Uninsured 2008 NCPA

National Center for Policy Analysis
Daily Policy Digest

August 28, 2008


Despite claims that there is a health insurance crisis in the United States, the number of U.S. residents without health insurance actually fell in 2007, says Devon Herrick, a health economist with the National Center for Policy Analysis. According to figures from the U.S. Census Bureau, the number of uninsured fell from 47.0 million to 45.7 million. Furthermore, the proportion of uninsured fell half a percentage-point, from 15.8 percent to 15.3 percent.

In fact, the proportion of people without health insurance was a percentage-point lower in 2007 than a decade earlier (16.3 percent in 1998). The slight increase in the number of uninsured over the past decade is largely due to immigration and population growth -- and to individual choice, says Herrick.

How Big Is the Problem? In 2007, according to Census Bureau data:

Nearly 85 percent (253.5 million) of U.S. residents were privately insured or enrolled in a government health program, such as Medicare, Medicaid and the State Children's Health Insurance Programs (S-CHIP).

Nearly 18 million of the uninsured lived in households with annual incomes above $50,000 and could likely afford health insurance.
Up to 14 million uninsured adults and children qualified for government programs in 2004 but had not enrolled, according to the BlueCross BlueShield Association.

In theory, therefore, about 32 million people, or 70 percent of the uninsured, could easily obtain coverage but have chosen to forgo insurance, explains Herrick. That means that about 95 percent of United States residents either have health coverage or access to it. The remaining 5 percent live in households that earn less than $50,000 annually. This group does not qualify for Medicaid and (arguably) earns too little to easily afford expensive family plans costing more than $12,106 per year. A uniform tax credit would go a long way toward helping this group afford coverage.

Source: Devon Herrick, "Crisis of the Uninsured: 2008," National Center for Policy Analysis, Brief Analysis No. 626, August 28, 2008.

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