October 20, 2006
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New Health Insurance Information Released

Current Population Reports

On August 29, the Census Bureau released its annual Current Population Survey (CPS) on poverty and health insurance coverage for 2005. There was a statistically significant growth in the uninsurance rate from 15.6 percent in 2004 to 15.9 percent in 2005. An additional 1.3 million individuals were without health insurance, raising the number of uninsured Americans to 46.6 million.

The data indicate a continuing trend in the further erosion of the private insurance market, but unlike the previous year when there was subsequent growth in the public coverage programs to absorb the newly uninsured, in 2005 public coverage remained unchanged. A critical departure from previous increases in the uninsured is that, in 2005, there was an increase of 300,000 uninsured children, reversing the small gain in coverage among children between 2000 and 2004.

Overall, the percentage of citizens covered by private insurance dropped to 67.7 percent (down from 68.2 percent) with the employer-sponsored coverage (ESI) rate dropping to 59.5 percent (down from 59.8 percent). In 2000, 71.9 percent of the population was covered by private insurance. The continued reduction of private coverage remains a vital concern for state policymakers.

Although there was an increase in the number of people covered by government sponsored programs in 2005, the percentage of people enrolled remained stable at 27.3 percent. According to 2005 data, 80.2 million people were covered by a government coverage program. More specifically:

  • Medicare enrollment marginally increased from 13.6 percent to 13.7 percent, but the increase was not statistically significant;
  • Medicaid enrollment remained steady at 13 percent; and 
  • Coverage through military programs grew from 3.7 percent to 3.8 percent but, again, the change was not statistically significant.

State-Level Uninsurance Information: Thirty-nine states plus the District of Columbia did not experience statistically significant changes in their respective uninsurance rates between 2003–2004 and 2004–2005. Highlights of state-level data for the 2004–2005 two-year period include:

  • Texas still has the highest uninsured rate at 24.5 percent. 
  • Minnesota has the lowest uninsurance rate at 8.7 percent. 
  • Three states (ID, IA, and NY) experienced statistically significant reductions in their uninsurance rates. 
  • Eight states (AZ, CA, DE, FL, GA, SC, UT, and VT) experienced statistically significant increases in their uninsurance rates.
  • Regionally, the Midwest has the lowest uninsurance rate overall (11.9 percent) followed by New England (12.3 percent), the West (18.1 percent), and the South (18.6 percent).

Kaiser and HRET Release Employer Health Benefits Survey

The Kaiser Family Foundation and the Health Research and Educational Trust recently released their 2006 Annual Employer Health Benefits Survey, an in-depth look at trends in health insurance costs and coverage in the workplace.

The survey showed that private health insurance premiums for family coverage rose 7.7 percent from spring 2005 to spring 2006, marking the third consecutive year of declining growth in insurance premiums costs (recent growth had peaked at 13.9 percent in 2003). Although the decline in insurance premium growth is encouraging, average family premiums still rose faster than increases in both inflation (3.5 percent) and workers’ earnings (3.8 percent).

The number of small firms offering health benefits has been continually declining since the beginning of the decade, with only 59 percent of firms with 3–199 employees offering coverage in 2005, down from 68 percent offering in 2000.

Although the average percentage of employee contributions to premiums has remained relatively stable over the past five years at 26 percent for family coverage ($2,973 toward an average annual cost of $11, 480) and 16 percent for single coverage ($627 of the $4,242 annual average total), employee cost- sharing amounts continue to increase. However, workers in small firms (3-199 workers) contribute significantly more to premiums ($3,550 annually) than do workers for larger firms ($2,658) primarily reflecting lower employer contributions in smaller firms.

The telephone survey included 2,122 randomly selected public and private firms with three or more employees. In addition to documenting premium changes, the survey describes employer cost-sharing mechanisms, including those related to prescription drugs and hospital care, workers’ contribution to the cost of coverage, the types of insurance that employers are offering, and the prevalence of consumer-directed health plans.

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