Off the Charts Blog | Center on Budget and Policy Priorities

The share of residents without health coverage fell in 20 states last year, Census data released yesterday show, while rising in just one.  As our analysis (with state-by-state data) explains, the improvements mostly reflect greater private coverage among young adults — helped by a health reform provision allowing them to stay on their parents’ insurance until age 26 — and enrollment increases in public programs like Medicaid and the Children’s Health Insurance Program (CHIP).

Last week, the Census Bureau announced that the number of uninsured Americans fell by 1.3 million in 2011 and the share of Americans without health insurance fell from 16.3 percent to 15.7 percent, the largest single-year drop since 1999.  Yesterday’s data come from a different Census survey, the American Community Survey, which allows for more detailed state-level analysis than last week’s data.  But the findings from the two surveys are consistent.

The new data also show that:

• In 34 states, the share of 18- to 24-year-olds with private coverage rose in 2011.

• In 30 states, the share of people enrolled in Medicaid and CHIP rose in 2011.

For those states that did not see a reduction in the uninsured, it appears that the gains in private coverage among young adults and/or the increases in public program enrollment could only offset — rather than more than offset — the continued overall erosion of employer-sponsored insurance. Missouri was the only state whose uninsured rate rose in 2011.  The gain in private coverage among young adults there could not offset the larger decline in private coverage among adults aged 25 to 64, while Medicaid and CHIP enrollment remained steady.

The number of uninsured Americans fell for the first time in four years, and the share of Americans without health insurance experienced the largest single-year drop since 1999, the Census Bureau announced yesterday.  The data suggest that health reform and other federal policies are a significant part of the reason.

The new Census figures show that:

• The overall number of uninsured Americans fell in 2011 by 1.3 million, to 48.6 million.
• The share of Americans without insurance coverage fell from 16.3 percent in 2010 to 15.7 percent in 2011.
• Some 2.3 million more low-income individuals were enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) in 2011 than in 2010, helping to reduce the number without health insurance.

We take a closer look at the Census findings in a paper released today.

A substantial rise in health coverage among young adults — which mainly reflected a health reform provision enabling adult children to get coverage through their parents’ health insurance plans until their 26^th birthday — accounted for much of the drop in the uninsured. 

The year 2011 was the first full year that the young adult provision affected health insurance coverage rates.  To assess its impact, consider that while the rate of private coverage rose by 1.6 percentage points among the young adults that the rule targets, it fell by 0.4 percentage points among all non-elderly adults aged 25 to 64 (see graph).  The increase in private coverage among young adults allowed the overall percentage of people with private coverage to remain steady, at 63.9 percent, for the first time in 10 years.

The overall gains in coverage also reflected a rise in the number and percentage of Americans with public health insurance — principally through Medicare, Medicaid, and CHIP. More people enrolled in these programs as the population aged and employer-based coverage continued to erode among those aged 25 to 64.

The progress in 2011 partially reversed the losses in coverage during the last several years, when the uninsured rate rose from 14.7 percent in 2007 to 16.3 percent in 2010 and the number of uninsured people climbed from 44.1 million to 50.0 million. Coverage levels remain below those before the Great Recession of 2007 to 2009, however, with 4.5 million more Americans uninsured in 2011 than in 2007.

The ranks of the uninsured should fall substantially starting in 2014, when health reform’s major coverage provisions will begin to be implemented. Some 30 million people who would otherwise be uninsured will gain coverage by 2022, the Congressional Budget Office estimates — and that number could grow larger if all or nearly all states adopt health reform’s Medicaid expansion.

Click here for our full analysis.

The Census Bureau on Wednesday will release estimates of the number of Americans with and without health insurance coverage in 2011, based on its annual Current Population Survey.  We’ve issued a brief report on what to look for in the data.

The good news:  preliminary data from the Centers for Disease Control and Prevention (CDC) indicate that in 2011, the total number of uninsured Americans fell for the first time in four years.  Less promising:  private health coverage among adults from 26 to 64 years old continued to fall, marking the fourth consecutive yearly decline in the coverage rate for this group, though major provisions of health reform scheduled for implementation in 2014 are designed to reverse this erosion of private coverage.

Four key developments that the data will likely show:

1. The number of uninsured fell substantially in 2011, but it remains much higher than before the recent recession. CDC data indicate that the number of Americans without health insurance coverage fell last year by 2.3 million people to 46.3 million uninsured Americans (see chart).  Those gains didn’t erase the losses of the recession, though; in 2011, according to the CDC data, 3.2 million more Americans were uninsured than in 2007.



2. Health reform expanded coverage for young adults. Among adults aged 19 through 25, 56.2 percent had private insurance coverage in 2011 — 5.2 percentage points more than in 2010.  A provision in health reform that allows adult children to obtain coverage through their parents’ health insurance plans up to their 26th birthday is likely the overwhelming reason why.
3. The erosion of private coverage continued. While private insurance coverage rates for non-elderly adults overall remained stable for the first time since 2007, at 64.2 percent, this masked a continued deterioration of private coverage among those not affected by the health reform provision for young adults.  Among people aged 26 through 64, the private coverage rate fell by 0.8 percentage points in 2011, according to the CDC data.
4. Medicaid and the Children’s Health Insurance Program (CHIP) have remained an increasing source of coverage for children and adults.  The percentage of children under age 18 with publicly funded health insurance coverage rose by 1.2 percentage points in 2011, to 41 percent. This increased enrollment likely resulted, in part, from a federal requirement that states maintain their eligibility rules and procedures for Medicaid and CHIP.  The percentage of children who are uninsured has been cut in half since the CDC began collecting these data in 1997, despite continued erosion in private insurance coverage.

Click here for the full paper, and check the Center’s website on Wednesday for further analysis of the Census data.

Georgia in 2008 enacted tax breaks to expand health coverage by encouraging people to buy high-deductible insurance plans that they could pair with a Health Savings Account (HSA).  Newt Gingrich’s Center for Health Transformation designed and promoted the law, claiming that 500,000 Georgians would gain health coverage using the tax breaks.

But, as our new analysis shows, these claims didn’t hold up.  Georgia’s uninsured rate has gone up since then, not down, and at a faster rate than in the region and the country as a whole (see chart).

Some policymakers have called for repealing the Affordable Care Act and have promoted HSAs as one of the alternative ways to expand coverage.  Our new report’s findings (which are consistent with our 2008 analysis of the Georgia law) cast serious doubt on that approach:

• There are 319,000 more Georgians without health insurance now than before the law was enacted.
• Georgia’s uninsured rate has increased more rapidly than the rest of the South and the nation as a whole.  This is also true among the law’s stated target population — people making more than $50,000 a year.

These findings reinforce earlier studies on the limitations of federal tax breaks related to HSAs.  These studies have shown that HSAs mostly benefit high-income people — the group that is least likely to be uninsured.  That’s not surprising since the higher a person’s federal income tax bracket, the greater the value of the benefit.

The Affordable Care Act will cover 34 million Americans who would otherwise be uninsured, according to the Congressional Budget Office.  Georgia’s experience provides some further evidence that promoting HSAs is not a viable alternative.

As we’ve noted, Census Bureau figures released last week show that public programs like unemployment insurance kept millions of people out of poverty in 2010.  They also show that public health programs like Medicaid kept millions of people from becoming uninsured in 2010, as they expanded to help offset the continuing decline in job-based coverage.

Employer coverage has been eroding for a number of years, and this trend accelerated sharply in 2009 and 2010, due in part to steep job losses.  Only 58.6 percent of non-elderly people had employer coverage in 2010, down from 67.7 percent in 2001.

But over the same 2001-2010 period, Medicaid coverage rose significantly, from 11.0 percent of non-elderly people to 16.9 percent, and other forms of public coverage rose as well.  Otherwise, the share of the population with insurance would have fallen even more than it did (see graph).

Among children, the increase in public coverage (through Medicaid and the Children’s Health Insurance Program, or CHIP) over the past decade more than offset the decline in private coverage, so the total number of uninsured children went down.  Among non-elderly adults, the increase in public coverage wasn’t enough to offset the decline in private coverage, mostly because states’ Medicaid eligibility rules are far more restrictive for non-elderly adults than for children.

Working parents are eligible for Medicaid only up to 64 percent of the poverty line in the typical state, unemployed parents are typically eligible only up to 38 percent of the poverty line, and, in most states, childless adults aren’t covered by Medicaid at all.

These data show why it’s so important to implement the Affordable Care Act reforms scheduled to take effect in 2014, which are designed to make coverage available and affordable to people who don’t have employer-based insurance.  Full implementation of the Affordable Care Act will strengthen and extend coverage to most of the 41.8 million adults age 18-64 who lacked insurance in 2010.  It also will prevent insurance companies from denying coverage or charging people with medical conditions very high premiums that they often can’t afford.