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How Did The Recession Impact Health Insurance Coverage?



December 6th, 2010

Between 2007 and 2009, with increasing unemployment and declining incomes, the number of uninsured nonelderly Americans increased from forty-five million to fifty million.

This finding is contained in a Health Affairs Web First article released today and authored by John Holahan, the director of the Urban Institute’s Health Policy Center. The Urban Institute study was prepared in partnership with the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured

Holahan’s study examines changes in Americans’ insurance coverage during the past decade. It focuses on the relationship between the national economy and insurance coverage, specifically the growth in the number of uninsured under age sixty-five. Holahan examines both the changes in income and coverage over the entire decade, with a closer examination of the economic changes from 2007 to 2009.  He uses several years of data from the Census Bureau’s Current Population Survey (CPS) to analyze trends in coverage.

Looking at the 2007-09 period, here are a few of Holahan’s key findings:

  • The number of nonelderly Americans insured through employers declined from 164.5 million to 156.2 million; much of this was because of job loss and movement from full-time to part-time work or unemployment. 
  • For adults, only some of this loss in insurance was offset by added public coverage; the number of uninsured adults increased by 5.6 million.  
  • The proportion of children covered through employer-sponsored coverage also declined, but this change was offset by increases in Medicaid and CHIP coverage. As a result, the number of uninsured children actually fell.
  • More than 60 percent of the newly uninsured were white Americans. Only a very small share were not citizens.
  • The largest percentage increase in the uninsured occurred in the Midwest. 

Holahan concludes that the provisions to expand coverage under the Affordable Care Act will address many of these issues, and largely end the link between employment loss and insurance coverage. This will not occur until 2014, when many of the act’s provisions take effect. Until then, “it is likely that employer-sponsored insurance will continue to decline because premiums will almost certainly grow faster than wages and salaries and the number of uninsured people is likely to increase.”

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