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Health Care Reform:

Health Insurance & Affordable Care Act

Uninsured Rate Drops to 15.3% as Safety Nets Kick In

WebMD Health News

45.7 Million in U.S. Lack Health Insurance

Aug. 26, 2008 -- For the first time in years, fewer Americans lack health insurance.

The U.S. Census Bureau today announced that 45.7 million of us had no health insurance in 2007. That's 1.3 million fewer uninsured Americans than in 2006.

And while it's not good news that 8.1 million U.S. children went without health insurance of any kind in 2007, that's 600,000 fewer uninsured kids than in 2006. And while 17.6% of children living in poverty didn't have health insurance in 2007, that's down from 19.3% the year before.

Unfortunately, the welcome numbers don't mean the U.S. health care system is in good health. The improvement comes almost entirely from the nation's safety net -- government-funded insurance programs, mostly Medicare and the State Children's Health Insurance Program (SCHIP).

"Insured" here means having any kind of health insurance -- private plans linked to employment or directly purchased; or government plans linked to Medicare, Medicaid, or the military. It doesn't mean the plans actually protect against devastating medical bills, says health care economist Karen Davis, PhD, president of The Commonwealth Fund, a private foundation.

"Whether or not people have any insurance coverage at all is just the tip of the iceberg," Davis tells WebMD. "Many people have health insurance that doesn't protect them from high bills or even assure them of care. It's a serious problem: 25 million U.S. adults are underinsured, up from 16 million two years ago."

Uninsured Americans don't get their health care for free. In 2008 they will have paid $30 billion out of pocket for health care, Jack Hadley, PhD, and colleagues at George Mason University note in the Aug. 25 issue of Health Affairs.

Moreover, Hadley and colleagues calculate, the government will have paid $56 billion to cover these uncompensated health care costs.

That's not the only sign the U.S. system is in trouble. The backbone of the U.S. health care system is employment-linked insurance coverage. Some 160 million Americans depend on this kind of coverage. But even in a year when uninsured rates are down, this kind of insurance is going down: from 59.7% of the population in 2006 to 59.3% of the population in 2007.

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