Uninsured numbers rise—again

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October 2003

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Uninsured numbers rise—again—in 2002
Who's poorer now?

Uninsured numbers rise—again—in 2002
The ranks of those without health insurance grew from 41.2 million in 2001 to 43.6 million in 2002, according to new data the Census Bureau has just released. The percentage of Americans who lack insurance rose from 14.6 percent in 2001 to 15.2 percent in 2002.

The primary factor behind the increase in the number of uninsured was an erosion in both adults' and children's private health insurance coverage, driven by the weak economy, rising unemployment, and the increasing costs of health care, according to analysts at the Center on Budget and Policy Priorities. These developments made it harder last year for workers and their dependents to retain employer-sponsored health insurance coverage. According to a CBPP report, the situation would have been even worse in 2002 with higher numbers of uninsured if both the federal Medicaid and the State Children's Health Insurance Program had not responded by expanding to pick up millions more people.

Leighton Ku, Senior Fellow in Health Policy at the CBPP, reported that enrollment in Medicaid grew by 3.2 million in 2002, while enrollment in SCHIP increased about 600,000 (not including children counted as Medicaid beneficiaries), according to state administrative data.

"Medicaid's ability to respond during economic downturns to cover substantial numbers of newly eligible people who would otherwise be uninsured depends directly on its status as an entitlement program, under which funding levels increase when need grows," Ku said. "Had federal Medicaid funding been capped under a block grant, as the Bush Administration proposed earlier this year, rather than rising automatically in response to the increased need, states would not have been able to afford to cover substantial numbers of additional people who lost their jobs and their health insurance, and the ranks of the uninsured would have swelled to a much greater degree."

Unemployment rates have been modestly higher so far in 2003 than they were in 2002, and health care costs are still surging. Medicaid enrollment is continuing to grow, as well, although at a somewhat slower pace than in 2002. According to the CBPP report, these developments indicate that the number of people without health insurance is likely to increase again in 2003, for the third consecutive year—despite signs that the economy may be finally recovering.

Key Findings from the New Census Data
The percentage of non-elderly adults (those aged 18 to 64) with private health insurance slipped from 70.9 percent in 2001 to 69.6 percent in 2001. A small part of this loss was offset by growth in Medicaid coverage, which increased from 6.7 percent of non-elderly adults in 2001 to 6.9 percent in 2002. The overall percentage of non-elderly adults who lacked health insurance climbed from 18.5 percent in 2001 to 19.5 percent in 2002.

Private health insurance coverage for children also dropped, falling from 68.4 percent of children in 2001 to 67.5 percent in 2002. In contrast to what happened to coverage for adults, however, the loss of children's private insurance coverage was entirely offset by increases in enrollment in Medicaid and SCHIP. The percentage of children insured through one of these programs increased from 22.7 percent in 2001 to 23.9 percent in 2002. As a result, there was a very small reduction in the percentage of children who are uninsured—from 11.7 percent in 2001 and 11.6 percent in 2002—although this change was not statistically significant.

These new Census Bureau findings parallel other recently released data about health insurance coverage from the Centers for Disease Control and Prevention and the Urban Institute. The other surveys also found that growth in publicly-funded health insurance has helped to offset the loss of private insurance. The CDC data indicate that about 2.5 million more children and 1.4 million non-elderly adults were covered by public health insurance programs—principally Medicaid and SCHIP—in 2002.

Other findings of interest from the new Census data include:

In 18 states, there was a statistically significant increase in the percentage of people who were uninsured between the 2000-2001 period and the 2001-2002 period. These states are Colorado, Idaho, Indiana, Maryland, Michigan, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Virginia, and Wisconsin. One state—New Mexico—experienced a statistically significant reduction in the percentage of people who are uninsured.

People who are poor were more than twice as likely to be uninsured as those who were not poor. The percentage of poor people who are uninsured stood at 30.4 percent in 2002, compared to 13.2 percent for those with incomes above the poverty line.

The number of poor people who are uninsured rose from 10.1 million in 2001 to 10.5 million in 2002. The percentage of poor people who are uninsured, however, did not change significantly in 2002. The increase in the number of poor Americans without insurance was spurred by growth in the overall number of poor Americans, not by a change in the proportion of poor people with health coverage.

Substantial racial and ethnic disparities exist in health insurance coverage. In 2002, some 10.7 percent of white, non-Hispanic Americans were uninsured, compared to 20.2 percent of African-Americans, 18.4 percent of Asians and 32.4 percent of Latinos. The risk of being uninsured is particularly high for immigrants who are not citizens: 43.3 percent of non-citizens were uninsured.

The percentages of white, non-Hispanic people and of African-Americans who are uninsured rose in 2002. The percentage who are uninsured did not change significantly among Latinos or Asians, but among both of these racial/ethnic groups, the percentage of people without insurance is very high.

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