Moderate-, Middle-Income Families Joining Ranks of Uninsured

The health insurance crisis is creeping up the economic ladder. That’s the conclusion of a report, Gaps in Health Insurance: An All-American Problem, (PDF file: 38 pages / 190 KB. More about PDFs.) released April 26 by the Commonwealth Fund.

The report, which uses information from the Commonwealth Fund Biennial Insurance Survey, found that 28 percent of Americans -- 48 million people -- between ages 19 and 64 went without health insurance for part or all of 2005. The year also saw “a dramatic and rapid increase” in the number of moderate-income families (i.e., households earning between $20,000 and $40,000 a year) who were uninsured, according to the report.

Last year, 41 percent -- up from 28 percent in 2001 -- of people in moderate-income households went without health insurance for at least part of 2005. Between 2001 and 2005, the percentage of middle-income people (i.e., those in households earning between $40,000 and $60,000 a year) who were uninsured for at least part of the year rose from 13 percent to 18 percent, and the percentage of high-income Americans -- those earning more than $60,000 a year -- who were uninsured rose from 4 percent to 7 percent.

“Gaps in health insurance coverage -- a problem that has long afflicted lower-income U.S. families -- is increasingly becoming an all-American problem,” the report says. “… while lack of insurance continues to be highest among families with incomes under $20,000, uninsured rates for moderate- and middle-income earners and their families are rising, putting their health and financial security at risk.”

The "Gaps in Health Insurance" survey follows a series of reports on the extent of the uninsurance problem in America. In March, the Agency for Healthcare Research and Quality released a statistical brief (PDF file: 5 pages / 96.6 KB. More about PDFs.) based on the Household Component of the Medical Expenditure Panel Survey, or MEPS-HC, for 2002 and 2003. The brief indicates that 31.6 percent of Americans younger than age 65, or 79.6 million people, were uninsured for at least one month during 2002 and 2003; 9.6 percent -- or 24.2 million -- people were uninsured for the entire two-year period.

The trends toward higher-income households going without health insurance for at least some period of time and toward more households experiencing long-term lack of insurance could reflect any of several factors affecting American workers, say Kaiser Family Foundation and Families USA analysts. More companies have stopped offering health benefits, shifted premium increases to workers, or changed to policies with high deductibles and copayments.

The Kaiser Family Foundation and Health Research and Educational Trust's 2005 Employer Health Benefits survey (PDF file: 8 pages / 374 KB. More about PDFs.) found the percentage of all companies offering health benefits to their employees fell from 69 percent in 2000 to 60 percent in 2005.

"We're seeing fewer offers of health care coverage by employers, particularly in lower income wage jobs," said Kathleen Stoll, spokesperson for Families USA. "And we're seeing a movement from full-time staff to part-time or contract workers. Couple that with higher health care costs -- which mean higher health care premiums -- and employees are being asked to pay more out-of-pocket expenses."

That, in turn, has increased financial pressure on families, according to the Commonwealth Fund's “Rising Out-of-Pocket Spending for Medical Care: A Growing Strain on Family Budgets.” (PDF file: 36 pages / 228 KB. More about PDFs.) The February report compared trends in the 1996-97 and 2001-02 Medical Expenditure Panel Surveys. Those data show that