Overall health insurance coverage rises, but masks decline in private coverage

August 26, 2008

See also today's Income Picture, Median income rose as did poverty in 2007.

The U.S. Census Bureau released numbers this morning that show that the share of Americans without health insurance coverage fell for the first time since 2000, from 15.8% in 2006 to 15.3% last year. There were 45.7 million uninsured Americans in 2007, down 1.2 million since its 47.0 million level in 2006.

Overall insurance rates ended their uninterrupted decline since 2000. However, this positive news masks a significant shift from private to public coverage. Employment- based coverage continued to decline and much of the fall in the percent of the uninsured is due to increases in public health insurance coverage, especially among children.

The highlights of the report indicate:

In 2007, 45.7 million people were uninsured, down since 2006. The number of uninsured Americans is still 7.2 million higher than is was in 2000.
The share of Americans with employment-based coverage continues to decline for the seventh year in a row, down nearly 5 percentage points since 2000.

The Census report suggests evidence of further unraveling of the employer-based system as the share of persons covered through work (either their own or a family member’s employer) declined for the seventh year in a row. As shown in the figure below, employment-based coverage was 59.3% in 2007, down from 59.7% in 2006, and a total decline of 4.9 percentage points since 2000.

While increasing overall coverage is a bright sign for American families, coverage through private insurance continues to decline. Even as employment-based coverage has declined, the share of Americans who receive coverage through the private individual market has also declined.

While the data released today only include information up through 2007, the recent economic downturn suggests that health insurance coverage has only worsened in 2008. As the percent of uninsured is expected to rise in conjunction with a slumping economy and the cost of health care continues to grow faster than inflation, the health care problem has reached a critical level for Americans families. Bold new solutions need to be considered to address the growing health care crisis.

See also today's Income Picture, Median income rose as did poverty in 2007.

To view archived editions of INCOME PICTURE, click here.

The Economic Policy Institute INCOME PICTURE is published upon the annual release of family income data from the Census Bureau.

EPI offers same-day analysis of income, price, employment, and other economic data released by U.S. government agencies. For more information, contact EPI at 202-775-8810.