GROWTH IN UNINSURED AMERICANS OUTPACING FEDERAL SPENDING ON THE HEALTH CARE SAFETY NET

The South is Home to More than Half of Uninsured Growth; Immigrants Not Driving Recent Growth

WASHINGTON, D.C. - At a policy briefing examining the latest health coverage trends and the implications for the nation’s health care safety net, the Kaiser Commission on Medicaid and the Uninsured (KCMU) highlighted five reports that profile the growing uninsured population and portray the health care safety net as increasingly straining to meet uninsured people’s needs.

“In the absence of providing health insurance coverage for our nation’s growing uninsured population, some have said that the uninsured can receive care when they need it through the nation’s health care safety net. The new studies and personal stories released today document the increasing burden health providers are facing in delivering needed care,” said Diane Rowland, executive director of KCMU.

New analysis highlighted today found that, as the number of uninsured Americans increased by 4.6 million from 2001 to 2004, federal safety net spending per uninsured person fell from $546 to $498 during the same period. After adjusting for inflation, total federal spending for care for the uninsured increased by 1.3 percent from 2001-2004 while the number of uninsured increased by 11.2 percent. These trends resulted in an 8.9 percent decline in spending by the federal government per uninsured person. See Figure below.

The analysis of federal spending on the health care safety net, authored by Jack Hadley and colleagues at The Urban Institute, describes the patchwork of federal money dedicated to care for the uninsured. The report documents that federal support for community health centers increased by more than 50 percent over the past four years, but still only accounts for less than 3 percent of total federal spending on the health care safety net. The authors noted that because more than 70 percent of federal support for the uninsured flows through Medicare and Medicaid, which are both under budgetary pressures, “it is unlikely that future funding will be able to close the gap or make up the difference” in the increase in the uninsured and funding for their care.

Another Commission study highlighted today, authored by John Holahan and Allison Cook of The Urban Institute, was published by Health Affairs this week. The study finds that all of the six million increase in the number of uninsured from 2000-2004 was among adults and two-thirds of the increase was among people with incomes below 200 percent of poverty (about $39,000 for a family of four in 2004). Both adults and children were affected by the 4.6 percentage point drop in the share of the nonelderly with employer coverage (67.8% to 63.3%), but children were able to obtain alternative coverage through Medicaid and the State Children’s Health Insurance Program.

When examined in even greater detail, about half of the growth in the uninsured was among young adults (ages 19-34) who experienced sharp declines in employer coverage rates. Fifty four percent of the growth occurred in the Southern region of the country which experienced the greatest growth in both the general population and low-income population combined with the largest decrease in employer coverage. This contributed to the 3.2 million increase in uninsured people in the South alone.

A third Commission study, also authored by John Holahan and Allison Cook, investigated the extent to which immigrants contribute to the growth in the uninsured population. Immigrants are disproportionately likely to be uninsured due to their employment in low-wage jobs that are less likely to offer health coverage and restrictions on their eligibility for public coverage. However, examining the period between 1994 and 2003, the study found that apart from the brief 1998 to 2000 period--years of unusually strong economic growth and tight labor markets-- the growth in the number of uninsured has largely been among native citizens. Between 1998 and 2000 native citizens experienced a decrease in the number of uninsured, while the number of uninsured non-citizens increased by 800,000. However, in the periods preceding and following this, the picture is much different. From 1994 to 1998 native citizens accounted for 3.1 million of the 4.2 million growth in the number of uninsured. During the 2000 to 2003 period, when the economy slowed, native citizens comprised 3.6 million of the 5.1 million more uninsured.

Today’s highlighted reports include:

• Federal Spending on the Health Care Safety Net from 2001-2004: Has Spending Kept Pace with the Growth in the Uninsured?,
• Changes in Economic Conditions and Health Insurance Coverage, 2000-2004,
• Are Immigrants Responsible for Most of the Growth of the Uninsured?,
• Threadbare: Holes in America’s Health Care Safety Net,
• Health Coverage in America, 2004 Data Update.

You may find the above reports and a summary of findings online.

In addition, the latest state-level health coverage information, as well as changes occurring between 2000-2004, are also available online.

A webcast of the policy briefing on these issues that was held in Washington, D.C., can be viewed after 5 p.m. E.T. today.

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The Kaiser Commission on Medicaid and the Uninsured provides information and analysis on health care coverage and access for the low-income population, with a special focus on Medicaid's role and coverage of the uninsured. Begun in 1991 and based in the Kaiser Family Foundation's Washington, DC office, the Commission is the largest operating program of the Foundation. The Commission's work is conducted by Foundation staff under the guidance of a bipartisan group of national leaders and experts in health care and public policy. The Kaiser Family Foundation is a non-profit, private operating foundation dedicated to providing information and analysis on health care issues to policymakers, the media, the health care community, and the general public. The Foundation is not associated with Kaiser Permanente or Kaiser Industries.