27 August 2004

Ranks of uninsured grow to highest since '98

A stagnant economy and rising health care costs helped push the percentage of people in the USA without health insurance last year to 15.6% of the population, the highest since the share hit a peak of 16.3% in 1998.

The main way U.S. residents get insurance is through their jobs, but a smaller percentage did so last year, either because they were unemployed, worked for a firm that didn't offer coverage or chose not to enroll.

Numbers released Thursday by the Census Bureau showed that 45 million U.S. residents lacked health insurance last year, their ranks growing by 1.4 million over 2002. That's the highest total ever. Still, the numbers could have been higher: Government programs like Medicaid saw increased enrollment, helping offset the losses in the private sector. And the proportion of children without health insurance did not change, remaining at 11.4%.

While the Census numbers reflect those who were without insurance for the entire year, the number of Americans who were without insurance for part of the year -- such as those who changed jobs and had to wait for new coverage -- is likely higher.

Because of population growth, the number of people with insurance grew by 1 million, to 243.3 million, or 84.4% of the population.

Because it is an election year, the Census numbers are likely to have political implications, as polls show that concerns about health care rank just behind worries about terrorism and the economy. Both parties have proposals aimed at helping the uninsured, although they vary widely in cost and scope.

The rise in the uninsured reflects the growing economic pressure on businesses, which have wrestled with consecutive years of sharply rising health insurance costs. Many employers have increased the amount workers must pay toward coverage. As a result, some employees, particularly lower-income workers, did not enroll. Other employers simply dropped coverage.

Aside from politics and the economy, the figures represent a stark reality for a growing number of Americans: Health insurance can be expensive and hard to get. Valerie Wix of Naples, Fla., left a job with insurance a year ago because her husband needed her help at his three-employee metal-fabrication business, which does not offer medical insurance. She applied for an individual policy with the same insurer who covered her at her previous job.

But she was turned down twice by the insurer because she has a thyroid condition. While waiting for an appeal of the first denial, Wix was hospitalized overnight for an unrelated ailment. She now owes $9,500 in doctor and hospital bills. Last week, she returned to her old job and will have health insurance again on Oct. 1.

"The health care system is ridiculous," Wix says.

Taking chances

Being without health insurance poses financial and health risks. In a series of reports, the prestigious Institute of Medicine outlined some of those risks: financial problems for families; economic strain on hospitals and other medical providers; and a lack of access to needed medical care, leading to about 18,000 unnecessary deaths each year.

The USA alone among the industrialized countries does not provide taxpayer-supported universal health coverage, instead relying on a mix of employer coverage, individual purchases and government programs.

Last year, the Census figures show that the percentage of people who got their insurance through their jobs dropped to 60.4% from 61.3% in 2002. About 725,000 fewer full-time workers had coverage compared with 2002. Among those who are uninsured, the vast majority, 36.3 million, are working-age adults from 18 to 64. Of those uninsured adults, 26.6 million held either full- or part-time jobs.

The data also show a continuing trend: a drop in the percentage of people who have health coverage at large firms. Traditionally, large firms are the most likely to offer coverage; smaller firms have more difficulty, and a far smaller percentage offer health plans. But last year, at firms with more than 500 workers, coverage dropped to 68.3%, down from 69.1% in 2002, according to economist Paul Fronstin of the Employee Benefit Research Institute, a non-partisan research group in Washington, D.C.

Fronstin says employers are not generally dropping coverage but are raising the amount workers have to pay, causing some not to enroll. Also, jobs have been lost in sectors that traditionally offered health insurance, and many jobs being created are in sectors that don't. Hours worked is also a variable.

"When you have a softer economy, it's easier to move people to part-time status, which generally means they don't get health insurance," Fronstin says.

Costly for self-employed

While the Census does not break out a category for the self-employed, many of those without insurance do work for themselves.

Young, healthy people generally have little trouble getting insurance policies, but often choose to forgo coverage, thinking they don't need it. For the self-employed who are older or sicker, policies may be too expensive or applicants may be turned down by insurers. For some, the start-up costs of a business cause them to skip the insurance.

"No one has the money for that when you first start," says Shannon Sylvia, 29, who started her graphics-design business four years ago in Leominster, Mass., leaving a corporate job with health insurance. She chose not to get a policy after finding it would cost $300 a month.

Not long after launching her business, Sylvia needed several hip surgeries to correct problems stemming from ballet dancing when she was younger. Her last surgery cost $20,000, and she's scheduled for another operation in September. Fortunately, Sylvia was able to take out loans, and her business is booming.

"The loan payments are costing me about $600 a month," says Sylvia, who says she will soon seek insurance. "But I'm paying the bills, my credit is still in good standing and I love my business."

Another large segment of the population works for companies that don't offer coverage.

Joye Willman of Portland, Ore., is a home health care worker, assisting elderly and disabled patients. She's been without health insurance for 12 years. Recently, her union negotiated an agreement that would provide insurance for those who worked 88 hours a month. Her clients' care totaled 83.

The free clinic where she had received care closed, and her medical records were lost, Willman says. Because she takes a thyroid medication that requires careful monitoring, she had to go to another clinic and have diagnostic tests that cost $1,000.

"Then they tried to kick me out of that clinic because I had not paid, so I had to scramble to get the cash," Willman says.

She says the USA needs a universal health system like that in Canada. She hopes to eventually get coverage through her job: "We're taking care of the most vulnerable people in society, but who takes care of us?"

By Julie Appleby
USA TODAY

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