More and more uninsured If a trend that started in 1994 continues, nearly 47 million Americans will be without health insurance by the end of 2005.

November 23, 1997

Despite one of the greatest periods of economic growth in our country's history, the number of uninsured people continues to rise, with more than 40 million Americans without health care coverage in 1995. Of those 40 million, almost 60 percent were workers.

Since the end of the health care reform debate in 1994, almost 3 million more people have become uninsured. Indications are that those numbers will continue to grow by almost 1 million each year. If that trend continues, one in five Americans younger than 65 will be uninsured in eight years.

High and rising health care costs have forced many employers - particularly small businesses - to drop health insurance. While employment is increasing in the service sector, many firms in that sector do not offer health insurance. Middle-class workers with families, many of whom work on a part-time or temporary basis, are most affected by employers who opt to reduce or eliminate health insurance. They cannot afford to bear the entire cost of health insurance while they do not qualify for public programs.

Recently, the coalition released a study, "The Rising Number of Uninsured Workers: An Approaching Crisis in Health Care Financing," by Kenneth E. Thorpe, director of Tulane University's Institute of Health Services Research. Here are some of the key ** findings:

General trends in coverage

* In 1995, the unemployment rate stood at 5.6 percent, nearly the same as 1990, but the percentage of Americans without insurance climbed from 15.7 percent to 17.3 percent, an increase of 5 million uninsured people. It appears that economic growth, by itself, will not decrease the percentage of uninsured Americans, and a recession would aggravate the problem significantly.

* Even with the expected sustained rise in employment, trends indicate that the number of uninsured nonelderly Americans will approach 47 million by 2005. That means 20 percent of the non-elderly, younger than 65, will be without health insurance in eight years.

* Of the projected 47 million uninsured, the number of uninsured workers will be almost 30 million by 2005. Sixty percent of the uninsured population will be employed, and many of the remaining 40 percent will be dependents of those workers.

Employer health insurance

* The percentage of Americans covered through employer-sponsored health insurance continues to decline. During 1990, almost 68 percent of non-elderly were covered through employer-sponsored plans. By 1995, the number had declined to 64.9 percent.

* Health insurance premiums slowed for large employers in the mid-1990s, but small employers continued to incur large premium increases. Premiums are expected to increase next year and accelerate over the next few years as managed care plans pass along their increasing costs to employers. This compensates for low premium increases over the last three years, and because the easy, early savings in managed care have been taken. As a result, we are likely to see more erosion in employer-sponsored health insurance plans and increases in the number of uninsured.

Structural changes in labor

* The rise in service jobs and the declining number of goods-producing jobs explain about a third of the rise in the uninsured during the recent period of economic growth. The service sector is growing rapidly, and that is where the greatest increases in the uninsured worker population are occurring.

* The high and rising number of contingent workers (contractual or part-time employees) is linked to the high num-ber of uninsured workers. In 1995, contingent workers made up 10 percent of the work force, and a third were uninsured. By contrast, only 17.4 percent of the traditionally employed workers were uninsured during 1995. Recent growth in employment has been in three industries: services, retail trade and construction, which have the highest concentrations of contingent workers, and where health insurance is least likely to be offered.

* Today's typical profile of the uninsured person is a young adult (between ages 19 and 39) with children; annual household income of $20,000 to $60,000; a contingent worker in a small business in the service sector.

Trends by household income

* As growth in private sector health insurance premiums slowed for large employers between 1993 and 1995, middle-income families had substantial increases in their share of health insurance premiums. Families earning $40,000 to $60,000 a year saw their health care expenditures increase 5.6 percent to 8.5 percent during the period. If health insurance is offered, many workers cannot afford to take advantage of its benefits because they cannot afford to purchase family coverage, and may only choose insurance for themselves, leaving dependents without coverage.

* Middle-income families with children and yearly incomes of $20,000 to $60,000 were more likely to lack health insurance in 1995 than in 1990.

Pub Date: 11/23/97

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