Changes in Insurance Coverage: 1994-2000 and Beyond

This background report explores the insurance trends for the latter half of the 1990s and examines why the number of uninsured nonelderly Americans fell in 2000 for the second straight year.

Some of the key findings include:

— Between 1999 and 2000, the number of uninsured declined by 570,000; uninsured children actually declined by 700,000 while the number of uninsured adults increased by 130,000. Expansions in Medicaid and the State Children's Health Insurance Program (SCHIP) led to the reduction in the uninsured rate for children. Employer coverage also increased for adults but public coverage did not and the result was an increase in the number of uninsured adults.

— There was a small increase in the rate of employer sponsored coverage among those living in families with at least one full time worker. However, the main reason for the increase in the rate of employer coverage in the non-elderly population was the huge increase in the number of people living in working families (18.5 million between 1994 and 2000).

— Another reason for the increase in employer sponsored insurance was the increase in employment in larger firms (1,000+ workers) where the likelihood of employer sponsored coverage was higher. Large firms employed 38.4 percent of workers in 1994 but accounted for 63 percent of the job growth between 1994 and 2000.

— Despite the recent gain in coverage for children, the trends in health insurance remain bleak. Between 1994 and 2000, a period of great economic prosperity, the uninsured rate was essentially unchanged from 17.3 percent in 1994 and 17.2 percent in 2000. While employer health coverage grew over this six year period, largely due to the movement of people up the income scale into jobs with health coverage, these gains were offset by declines in Medicaid and private individual coverage.

— Between 1994 and 1998, Medicaid coverage declined due to the loss of coverage following welfare reform and the expanding economy resulting in an increase in the number of uninsured. After 1998, increased enrollment in Medicaid and SCHIP of children combined with an increase in employer coverage contributed to the decline in the uninsured population. For adults, employer coverage increased for adults between 1994 and 2000, but Medicaid and private non-group coverage both fell with an increase in the uninsured rate over the period.

— From 1994 to 2000, the number of uninsured white Americans declined by 900,000 while the number of uninsured blacks increased by 500,000 and uninsured Hispanics by 1.9 million. Each group benefited from the strong growth in employer-sponsored coverage, but blacks and Hispanics were particularly adversely affected by the declines in Medicaid coverage.



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