Economic Indicators | Health

Government Policies Continue to Provide Health Insurance Safety Net for Non-Elderly Americans


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According to a report released today by the U.S. Census Bureau, the number of Americans under age 65 without health insurance fell from 47.9 million in 2011 to 47.3 million in 2012. When including those age 65 and older, the number of uninsured Americans fell from 48.6 million to 48.0 million over this period.

Most Americans, particularly those under age 65, rely on health insurance through the workplace. Employer-sponsored health insurance coverage rates held steady in 2012, increasing by 0.1 percentage points to 58.4 percent. This slight reprieve comes on the heels of many years of eroding coverage. In total, employment-based coverage fell 10.8 percentage points from 2000 to 2012.

Because Americans age 65 and older have near-universal access to health insurance coverage through Medicare, this report primarily focuses on coverage rates for the under-65 population. This report’s highlights are:

  • In 2012, 47.3 million people under age 65 were uninsured, down from 47.9 million in 2011. However, the number of uninsured non-elderly Americans is 11.1 million higher than in 2000.
  • The share of non-elderly Americans with employer-sponsored health insurance is no longer falling, but has declined 10.8 percentage points since 2000 to 58.4 percent in 2012.
  • Public health insurance coverage has continued to rise, though only slightly over the year. Over 22 million more people under age 65 were covered by Medicaid or the Children’s Health Insurance Program (CHIP) in 2012 than in 2000.
  • Critical provisions in the Patient Protection and Affordable Care Act (also known as health reform) improved young adults’ coverage rates by insuring them on their parents’ health insurance policies. Employer-sponsored health insurance coverage for young adults, those age 19–25, increased 0.5 percentage points from 2009 to 2012, far more than for any other age group, and far more than would be expected given their employment outcomes.

Overall coverage trends, 2011–2012

Employer-sponsored health insurance (ESI) remains the predominant form of coverage for those under age 65. In 2012, the rate of coverage reversed trend since 2000 and increased slightly over the year (as shown in Figure A). Non-group coverage (individually purchased private insurance) and public coverage also experienced small increases from 2011 to 2012. As a consequence of these coverage increases, the uninsured rate among non-elderly Americans fell from 17.9 percent to 17.7 percent from 2011 to 2012.

Figure A
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Health insurance coverage by type, under age 65, 2011–2012

 

Type of coverage 2011 2012
Employer-sponsored 58.3%  58.4%
Non-group 7.1%  7.3%
Public 22.7% 22.8%
Uninsured 17.9% 17.7%

Source: Author’s analysis of Current Population Survey Annual Social and Economic Supplement Health Insurance Historical Tables (Table 6)

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A closer look at employer-sponsored insurance coverage

The Census report suggests evidence of a reprieve from the further unraveling of the employer-based coverage system, as the share of persons covered through work (either their own employer or that of a family member) rose for the first time since 2000.

As shown in Figure B, ESI covered 58.4 percent of people under age 65 in 2012, up from 58.3 percent in 2011. Overall, the share declined by 10.8 percentage points between 2000 and 2012.

Figure B
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Employer-sponsored health insurance coverage, under age 65, 2000–2012

Year Employer-sponsored insurance coverage
2000 69.2%
2001 67.7%
2002 66.6%
2003 65.0%
2004 64.5%
2005 64.0%
2006 63.5%
2007 63.4%
2008 62.3%
2009 59.4%
2010 58.6%
2011 58.3%
2012 58.4%

Source: Author’s analysis of Current Population Survey Annual Social and Economic Supplement Health Insurance Historical Tables (Table 6)

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Figure C illustrates the incidence of employer-sponsored health insurance among the entire population—including those age 65 and older—by race and ethnicity since the last labor market peak in 2007. While it is clear that the incidence of employer-sponsored health insurance differs across race/ethnic groups, with the highest coverage rates among whites and Asians and the lowest among blacks and Hispanics, the trends are also particularly telling. Since the last labor market peak in 2007, all groups experienced declines in coverage; however, the largest declines were among whites and blacks.

Figure C
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Employer-sponsored health insurance coverage rates, by race and ethnicity, 2007 and 2012

2007 2012
White 66.0% 61.1%
Black 50.1% 45.1%
Asian 63.3% 61.1%
Hispanic 41.0% 38.3%

Note: White refers to non-Hispanic whites, black refers to black alone or in combination, and Hispanic refers to Hispanics of any race.

Source: Author’s analysis of Current Population Survey Annual Social and Economic Supplement Health Insurance Historical Tables (Table 2)

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It is clear how public insurance has shielded children under age 18 from the decline since 2000 in employer-sponsored insurance (Figure D). After a period of declining coverage, children’s employer-sponsored health insurance rate increased slightly between 2011 and 2012. In total, however, children’s employer-sponsored health insurance coverage declined 11.4 percentage points from 2000 to 2012. Children’s public coverage, primarily through Medicaid and the Children’s Health Insurance Program, continued to increase unabated in 2012, increasing a total of 15.0 percentage points since 2000. Ultimately, public coverage is the reason 1.2 million fewer children were uninsured in 2012 than in 2000.

Figure D
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Percentage-point change in ESI* coverage rate, public coverage rate, and uninsured rate for under age 18 and age 18 to 64 populations, 2000–2012

 Age group ESI Public Not covered
Under 18 -11.4 15.0 -1.8
18–64 -10.6 6.0 4.6

* Employer-sponsored [health] insurance

Source: Author’s analysis of Current Population Survey Annual Social and Economic Supplement Health Insurance Historical Tables (Tables 5 and 6)

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Non-elderly adults have not been so fortunate. Those between ages 18 and 64 experienced a 4.6 percentage-point increase in the share uninsured from 2000 to 2012. Unlike children, their ESI losses were not fully offset by increasing public coverage.

For young adults, health reform played a key role in preventing a decline in workplace coverage. The Patient Protection and Affordable Care Act includes provisions that allow young adults up to age 26 to secure health insurance coverage through their parents’ employer-sponsored health insurance policies. Looking closely at changes in employer-sponsored insurance since the young adult provision took effect in mid-2010, it is clear that young adults are benefiting.

Figure E illustrates the change in employer-sponsored health insurance and the change in employment rates by age group from 2009 and 2012. Young adults, ages 19–25, are the only age group to see increases in employer-sponsored health insurance since 2009. One explanation for this outcome could hypothetically be a better labor market; however, a simple look at the data easily disproves this theory. The employment rates suggest that young adults have fared worse than any other age group. Since the job market was not disproportionately favorable toward young adults, it is clear these positive ESI trends are due to the Affordable Care Act.

Figure E
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Change in employment rate* and employer-sponsored health insurance, by age group, 2009–2012

Age group Employment rate Employer-sponsored health insurance (ESI) coverage rate
19–25 -0.8 0.5
26–34 0.5 -0.2
35–44 0.1 -0.5
45–54 -0.5 -2.5
55–64 0.0 -2.6

* Employment rate here is defined as employment-to-population ratio.

Source: Author’s analysis of Current Population Survey microdata and Current Population Survey Annual Social and Economic Supplement (customized table from CPS Table Creator)

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Conclusion

The data released today by the U.S. Census Bureau highlight that the current system does not provide stable and secure coverage for many Americans. The share of Americans under age 65 with employment-based health coverage saw a reprieve from many years of eroding coverage; however, it dropped from 69.2 percent in 2000 to 58.4 percent in 2012. The share of uninsured Americans under age 65 rose from 14.7 percent in 2000 to 17.7 percent in 2012. However, this 17.7 percent in 2012 is a decline from 17.9 percent in 2011.

Looking at the numbers released today by the U.S. Census Bureau, it is clear that government insurance and health reform together account for this decline. The full phase-in of the Patient Protection and Affordable Care Act over the next few years, including the introduction of the state-based health insurance exchanges next month, should accelerate the increase in insurance coverage, covering millions more Americans.

Research assistance by Will Kimball


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