On the heels of the President’s speech on health care reform, the Census Bureau released to little fanfare new estimates of health insurance coverage from the Current Population Survey (CPS).   Between 2007 and 2008, the number of individuals without health insurance rose from 45.7 million to 46.3 million, increasing the ranks of the uninsured by 683,000.

The new estimates seem almost immediately outdated since they do not capture the full impact of the economic downturn as experienced by Americans today.  Nonetheless, much can be gleaned from these and other recent data on the uninsured to help Congress and the President craft a health care reform plan for the nation.

First, the number of uninsured in the U.S. is probably substantially higher now.   A recent Urban Institute study estimated that for every one percentage point increase in the national unemployment rate the number of uninsured grows by 1.1 million and enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) grows by 1.0 million.  In August of 2009, the unemployment rate reached 9.7 percent up substantially from the 2008 average of 5.8 percent.  This large rise in unemployment has likely increased the number of uninsured by over 4 million bringing the total close to 51 million today.  It also has likely increased the number of Americans covered by Medicaid and CHIP by about 4 million at time when state revenues are falling.

Second, Medicaid and CHIP protected many children from becoming uninsured between 2007 and 2008. During this period, the number of uninsured children actually fell — from 8.1 million to 7.3 million — and their public coverage increased.  The reduction in uninsurance among children is especially notable given the concurrent growth in child poverty and the increase in uninsurance experienced by adults during this period.  Equally noteworthy, the number of uninsured children in 2008 is the lowest on record since 1987 when comparable statistics began being collected.  Reform efforts ought to maintain and build on the Medicaid and CHIP programs success at covering children and reducing the ranks of the uninsured.

Third, uninsured Americans have few options to purchase quality affordable private coverage in the current market.   A recent series of briefs by myself and others documents just how scarce access to affordable coverage is for the uninsured.   Less than 20 percent of uninsured Americans have an offer of employer-sponsored coverage despite the fact that the majority live in families with at least one full time worker.  To purchase coverage in today’s market more than a third of the uninsured would have to spend between 10 and 49 percent of their income and nearly a quarter would have to spend more than 50 percent of their income.  Another 7 percent are uninsurable due to their health status or that of someone in their family. 

What does this mean for health care reform?  The current economic downturn has made uninsurance a bigger problem for Congress to fix and drives home the importance of developing a reform plan that protects Americans and States in tough economic times.  The experience of Medicaid and CHIP illustrates that strong public insurance options can provide coverage to Americans when the economy tanks, when a parent loses a job, and when no affordable options for health insurance exist. 

At the same time, states are ill equipped to bear the responsibility for financing care for the uninsured during economic downturns when their budgets need to be balanced and state revenues are declining.  Moreover, it is unclear whether states will be even be able to maintain their level of effort when federal stimulus monies disappear if their fiscal capacity doesn’t improve dramatically.  Health care reform will also need to provide the uninsured with new options and adequate subsidies to make quality health insurance coverage affordable for them, as few options exist for them in the current market.  Finally, an individual mandate would likely go a long way towards inducing the small share of the uninsured that can afford to purchase coverage to obtain it.