As the Economy Improves, the Number of Uninsured Is Falling But Not Because of a Rebound in Employer Sponsored Insurance
Changes in Coverage Among the Nonelderly Population
Figure 4 and Table 1 show the changes in health insurance coverage between 2007 and 2012. In the early years of the recession, from 2007 to 2010, the ESI rate fell dramatically from 64.3 percent to 59.7 percent. During this period, 9.5 million people lost ESI coverage. There was no significant change in the rate of private non-group coverage during this period. Some of the loss of ESI was offset by increases in Medicaid and Children’s Health Insurance Program (CHIP) coverage. There was an increase in Medicaid/CHIP coverage from 11.8 percent to 14.4 percent from 2007 to 2010, meaning 7.4 million more people had public coverage. The net result was an increase in the uninsured rate from 16.6 percent to 18.5 percent, an increase of 5.7 million individuals, between 2007 and 2010. Between 2010 and 2012, when the economy began to improve, the loss of health insurance coverage generally halted (Figure 4). There was no change in the non-group coverage rate. However, there was an increase of 0.5 percentage points in Medicaid and CHIP coverage, meaning 1.5 million people gained Medicaid or CHIP coverage. There were also an additional 1.1 million individuals who had ESI coverage, mostly young adults (data not shown). These modest increases in coverage resulted in the uninsured rate falling from 18.5 percent to 17.7 percent and the number of uninsured falling by 1.8 million.
Changes in Coverage by Income
Much of the change in uninsured between 2007 and 2012 occurred among those with incomes below 200 percent of the federal poverty level (FPL). Between 2007 and 2010, the number of people in the middle-income group – those with incomes of 200 to 399 percent FPL – fell by 3.5 million and the number of individuals with incomes at or above 400 percent FPL fell by 6.0 million. All of the net population growth was among those with incomes below 200 percent FPL. Over the three-year period, an additional 13.9 million people had incomes below 200 percent FPL (Figure 5). The lowest income group experienced the sharpest decline in ESI coverage – from 31.4 percent to 28.1 percent. They also experienced the largest increase in Medicaid/CHIP coverage. The uninsured rate in this group increased from 31.2 to 32.3 percent, and there was an increase of 5.4 million uninsured low-income individuals. This increase in the uninsured population happened because of both the increase in the uninsured rate and the increase in the size of the low-income population.
Between 2010 and 2012, the most important changes (Figure 6) continued to occur among low-income individuals. The low-income population continued to increase, though not as much as in the previous three years. Almost all of the increase in public coverage occurred among those with incomes below 200 percent FPL, as did virtually all of the reduction in the uninsured. Among those with incomes below 200 percent FPL, the number of uninsured fell by 1.9 million, accounting for the entire drop in the number of uninsured over this period.
Changes in Coverage by Age
Historically, coverage options for adults—particularly low-income adults—were more limited than those for children due to limits on Medicaid eligibility for adults. We next examine the changes in insurance coverage for adults and children separately, given the differences in availability of public coverage between the two groups.
There was a 4.6 percentage point decline in ESI among adults in the early years of the recession, which was partially offset by a 1.5 percentage point increase in Medicaid enrollment (Figure 7). Thus, the uninsured rate increased by 3.0 percentage points, from 19.1 percent to 22.0 percent. The increase in the number of uninsured adults was 6.4 million from 2007 to 2010. Most of the increase was among low-income adults, where the number of uninsured increased by 5.6 million (Table 2). Between 2010 and 2012, the overall ESI rate among adults did not change, but as a result of the increase in public and nongroup coverage, the uninsured rate declined by 0.8 percentage points, from 22.0 to 21.3 percent. The number of uninsured adults declined by 1.1 million. All of the decline was among low-income adults (Table 2). Changes in coverage among adults are affected by ACA provisions that allow young adults to stay on their parents’ policy. Because the policy was enacted in 2010, in Figure 8 we used 2009 as the base year because we wanted to make sure that we were able to clearly see the effects pre and post implementation of the provision. Although there appears to have been no real change in ESI coverage among adults between 2009 and 2012, there are in fact two offsetting trends that become apparent when ESI coverage among adults is broken out by age cohorts. Figure 8 and Table 3 show that among young adults (ages 19-26), ESI coverage increased by 4.3 percentage points from 2009 to 2012. In contrast, during this same period, individuals in the two oldest age groups (ages 35-54 and ages 55-64) experienced a continuing decline in ESI coverage. For those between the ages of 35 and 54 there was a statistically significant decrease in ESI coverage of 1.6 percentage points, and adults between the ages of 55 and 64 saw an even larger loss of ESI coverage of 2.6 percentage points. The overall rates of ESI among adults appear to be flattening out because the dramatic increase in ESI among young adults is masking the continuing decrease in ESI that is occurring among the two older age cohorts. The age-related trends underlying the seemingly constant rate of ESI among all adults have significant implications. The increase in ESI among young adults implies that the provision in the ACA that allow children up to age 26 to stay on their parents’ insurance as of September 2010 is having the intended effects; whereas the decrease in ESI among older individuals, ages 35-64, indicates that the bulk of the working force is continuing to experience significant declines in ESI coverage.
Patterns of coverage changes between 2007 and 2012 differ between children and adults. In the early years of the Great Recession, 2007 to 2010, the decline in ESI coverage was slightly larger for children than for adults: the ESI rate for children dropped 4.9 percentage points compared to 4.6 for adults. However, there was a much larger increase in Medicaid and CHIP coverage for children than there was for adults. Among children, Medicaid/CHIP coverage rose from 23.5 percent to 29.1 percent, or an increase of 4.4 million children (Figure 9). As a result, despite the severe recession and sharp decline in ESI coverage, the uninsured rate actually fell for children. Between 2007 and 2010, the number of uninsured children fell by 600,000. Between 2010 and 2012, there was a small but not statistically significant increase in the ESI rate among children, and there was a small increase in public coverage (Figure 9). Because of the small increases in public and private coverage, there was a small decline in the uninsured rate among children, from 10.1 percent to 9.2 percent, a decrease of 700,000 children. Thus, the uninsured rate for children declined in both periods throughout 2007 to 2012.
Changes in Coverage by Family Work Status
Consistent with declines in incomes, there were major shifts in patterns of family work status during the recession (Table 5). The number of individuals in households with one or two full-time workers fell by 3.9 million and 7.0 million respectively between 2007 and 2010 (Figure 10). At the same time, there was an increase of 6.2 million in the number of individuals living in households with only part-time workers and an increase of 9.2 million individuals living in households with no workers. Since the likelihood of lacking ESI coverage and the uninsured rate is much higher in households with only a part-time worker or no workers, the changes in employment affected the ESI rates. In addition to changes in work status, there were declines in ESI rates both among those who remained in two full-time workers or one full-time worker households by 1.2 percentage points and 1.7 percentage points respectively. Similarly, there were declines in rates of ESI in households with only a part-time worker or no workers as well. Thus, declines in ESI coverage were not simply caused by the shift from full-time to part-time and no worker households; the likelihood of having ESI coverage also declined among households with workers of any work status. Because of the shifts among work status groups, all of the increase in the uninsured occurred among individuals living in households with part-time or no-workers; increases of 2.4 million and 3.6 million uninsured people respectively. From 2010 to 2012 this pattern changed (Figure 11). There was an increase of 2.2 million individuals living in households with one full-time worker and declines in the number of individuals living in households with only a part-time and no worker. There was a small increase in the rate of ESI for families with 2 full-time workers, with part-time workers and with no workers, though the increase was only significant for families with a part-time workers. Among households with one full-time worker the ESI rate continued to decline from 64.7 percent to 64.0 percent. Thus, among those in households with one full-time worker – almost 140 million people – the likelihood of ESI coverage is continuing to fall.
Changes in Coverage by Demographic Characteristics
In addition to declines in incomes and employment discussed in previous sections, there were also two important demographic changes that have occurred in recent years. The first is the decline in the white population and an increase in the number of Hispanics, blacks, and “others.” The “others” category includes American Indians, Alaska Natives, Asians, Pacific Islanders, and anyone with two or more races.. From 2007 to 2012, the white population declined by 6.1 million people while the number of Hispanics increased by 6.5 million and “others” by 4.5 million. The shift in demographics is important particularly since Hispanics have much lower rates of ESI and higher uninsured rates than whites. The “other” group tends to have coverage patterns that are much closer to that of whites. In addition, geographically, there was stagnant population growth in the Northeast, a decline in population size in the Midwest, and increases of 4.0 million and 2.0 million people in the South and West respectively. Thus, the population continued to shift toward regions in which there were lower ESI rates and higher likelihood of being uninsured.
Between 2007 and 2010, all racial and ethnic groups saw declines in ESI and increases in uninsured rates (Table 6 and Figure 12). Among whites, there was a decline in ESI coverage, which was somewhat offset by Medicaid and CHIP coverage. The uninsured rate among whites increased from 11.7 percent to 13.7 percent and the number of uninsured increased by 2.8 million. Among blacks, there was a very large drop in ESI coverage from 53.4 percent to 46.3 percent. Again, some of this was offset by public coverage, but the uninsured rate increased from 19.9 percent to 22.1 percent and the number of uninsured black individuals increased by 800,000. Hispanics saw a smaller than average drop in ESI coverage although ESI coverage rates were already lower than those for other groups. Hispanics also experienced an increase in public coverage and no significant change in uninsured rate. However, because of the increase in the size of Hispanic population, the number of uninsured Hispanics increased by 1.1 million. The “other” group saw a decline in ESI coverage about equal to the national average. Public coverage for this group increased, as did the uninsured rate from 17.0 percent to 19.0 percent. The increase in the number of uninsured in this group was 1.0 million. Racial and ethnic group coverage trends changed starting in 2010 (Figure 13). From 2010 to 2012, the ESI rate stayed constant for whites but increased sharply for blacks. There were small, but statistically insignificant changes in ESI rates for the other two racial and ethnic groups. Overall, there was an increase in public coverage, particularly among Hispanics. The uninsured rate declined for each group, larger declines for blacks, Hispanics, and ”others”; 1.6 percentage points, 1.4 percentage points, and 2.5 percentage points respectively. The stabilization of ESI rates, or in some cases increases, coupled with continued small increases in public coverage led to an overall decline in uninsured rates for all racial and ethnic groups. For each group, there were fewer uninsured individuals. But for each group the rate of ESI coverage was lower in 2012 than it was in 2007.
The shift in populations among regions between 2007 and 2010 was also important, as regions have different underlying uninsured rates and ESI rates. Overall, the shift of the population towards the South and West lowered ESI rates and raised uninsured rates nationwide, as these regions have lower coverage rates than other regions. Still, all regions saw drops in ESI and increases in uninsured between 2007 and 2010 (Figure 14). The Northeast, which saw little change in overall population, had a sharp decline of 4.0 percentage points in the ESI rate and an increase in the uninsured rate of 2.1 percentage points. The number of uninsured in the Northeast increased by 1.0 million. The Midwest saw the sharpest drop in ESI coverage – 5.7 percentage points – and the largest increase in the uninsured rate – 2.4 percentage points, corresponding to 1.4 million more uninsured people. The South saw a 4.1 percentage point decline in the ESI coverage rate that was partially offset by an increase in Medicaid and CHIP coverage. But the uninsured rate in the South increased from 20.4 percent to 21.7 percent, an increase that, combined with population growth in that region, led to an increase of 1.9 million uninsured individuals. Similarly in the West, the 4.8 percentage point decline in ESI rate was not fully offset by increases in public coverage and the uninsured rate increased by 1.9 percentage points or 1.4 million individuals. In the last two years, ESI rates were largely unchanged in each region (Figure 15). There were increases in public coverage, particularly in Northeast and West. In the Northeast, the large increase in public coverage resulted in the number of uninsured declining by almost 1 million individuals, about as much as it had increased between 2007 and 2010. In contrast, the small changes in coverage in the South did little to reverse the large increase in the uninsured population seen in the first three years.