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Sunday, September 11, 2011

Increase in Uninsured Rate Shows Need for Action on Jobs

“Gallup: Uninsured Have Increased Under Obama and Since Obamacare Was Enacted,” blares the headline at CNSnews and a number of other conservative sites that picked up the story (thanks to a non-blogger friend for pointing me to this). The implication is that Obama and the Affordable Care Act have failed, though the article is careful to point out that the mandate does not come into effect until 2014. Indeed, the article makes no claims to explaining why this happened.

As two Gallup surveys show, 14.8% of adults were uninsured in 2008, 16.2% in 2009, 16.4% in 2010, and 16.8% in the first half of 2011. In fact, the results in June had to have been dreadful, because Gallup's January-May polling only gave a 2011 figure of 16.6%, and June results pushed the figure to 16.8%.

Similar, but less quickly reported, numbers come from the Census Bureau. As reported by the Kaiser Family Foundation in September 2010, the uninsured rate for all Americans was 15.4% in 2008 and 16.7% in 2009. Since the percentage of children uninsured in both years was about 10%, this implies even higher uninsured rates for adults than Gallup found.

What were the causes of this increase? Using the Gallup data since it is more recent, fully 70% of the increase (1.4 of 2.0 points) came from 2008 to 2009, when the full-year unemployment rate rose from 5.8% to 9.3%, as mentioned in the Kaiser article. Yet unemployment peaked at 10.1% in October 2009 and is down to 9.1% in August 2011, so it isn't simply unemployment since the uninsured rate has continued to rise. The other main cause would appear to be reduced employer provision of health care, whether through plan suspension, unaffordability, or of course job loss. According to Gallup's data, the percentage of adults with employer-provided insurance declined from 49.2% in 2008 to 45.0% in January-May 2011.  The figure in 2010 was 45.8%, meaning that employer-based insurance fell even though there was no increase in unemployment.

Reversing this trend requires the full implementation of the Affordable Care Act, of course, but in the short run, these data underline the importance of job creation, since that is still by far the most common source of health insurance. Whether President Obama's jobs plan will pass is hard to gauge (though I think it's improbable), but without it, we are likely to see continuing increases in the number of uninsured. In addition, we should pay attention to Medicaid, which may cover fewer people due to state budget crises.


  1. The number of uninsured will continue to rise, even as unemployment drops, because many employers who eliminated jobs during the downturn will restructure jobs (and job descriptions) to bring those jobs back with fewer or no benefits. I saw that happen in the early 90's and in 2003-5 after the tech bust.

  2. There's a good chance of that, but until the ACA fully kicks in expanding employment is still our best chance of increasing insurance.

    A commenter at The Incidental Economist (where this post was linked) pointed out that the employment/population ratio correlates better with the uninsurance rate than the unemployment rate does. It has continued to fall over the last year and a half even though the unemployment rate has fallen, so it tracks the uninsurance rate better.