Megan McArdle

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The good news and the bad news

28 Aug 2007 04:33 pm

Peoples' incomes improved markedly in 2006; the poverty rate dropped, and household income marched upwards.

On the down side, the percentage of Americans with health insurance dropped rather precipitously, from 84.7% to 84.2%. What happened?

Well, the numbers do tend to jump arund, especially with the business cycle. But we're in the very late phases of an expansion, if not a recession; why should insurance coverage still be falling? Forget the fluffy AP stories; let's go to the tape.

The percentage of Americans covered by private insurance has been falling for a while, now. That's not some grand conspiracy of business owners. In part it's due to companies dropping people, but a sizeable chunk of the change is simply due to programmes like S-Chip, which encourage families to drop their coverage; and an ageing population transitioning into Medicare.

The public sector dropped pretty sharply last year, but not nearly as steeply as the government. After rising steadily since 1999, the percentage of people with government coverage dropped by 30 basis points. Out of a total increase in population of roughly 3 million, the private sector, which usually insures about 800,000 new patients a year, only insured a little over 500,000 new patients last year. That's a big drop. Meanwhile, the government, which generally insures a million or more new patients last year, this year took on . . . about 53,000.

The big slowdowns were in military healthcare, and in Medicaid. So at a glance, we're looking at two factors: state governments cutting back on Medicare spending, and the recruitment and retention shortfalls in the military, which mean fewer soldiers and dependents in the military healthcare system.

The other interesting detail confirms an ongoing story: immigrants. The percentage of native born americans with coverage dropped by 40 basis points last year; but the percentage of the foreign born without coverage dropped twice as fast.

Comments (17)

[T]he percentage of Americans with health insurance dropped rather precipitously, from 84.7% to 84.2%. What happened?

Part of the answer depends on how you define "Americans". On another blog (sorry, Megan, I've been disloyal) I read that 10,000,000 of those uninsured "Americans" are "undocumented aliens", a/k/a illegals. About 40% of the increase in the ranks of the uninsured is attributable to the increased numbers of illegal aliens joining the rest of us Americans.

Charlie (Colorado)

Megan, what's the error bar on that percentage? It seems a little difficult to imagine that the data is good to 0.005.

David,

I wonder what percentage of the "undocumented" really have forged documents. To my mind, "undocumented" and "forged documented" are not the same. Kinda like the difference between misdemeanor and felony.

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Zagreus Ammon

The census only reports citizenship status, not "illegality." Therefore, legal immigrants, working at low-paying jobs that don't offer insurance are included in thsi numebr.

Funny how the "conservative" mafia have devolved this into 10 M illegals! I am a legal resident non-citizen and a taxpayer. If I am uninsured, I am one of these 10M people. The proportion of illegals in this group is low, because they hide when the census trucks come out! I've seen it.

Half a percentage point is "precipitously"?

NPR said that while household income went up, individual earnings went down. Why? More homemakers (i'm using a nongendered term) entering the workforce is the most likely answer.

Not necessarily a rosy picture on median income...

The percentage of Americans covered by private insurance has been falling for a while, now. That's not some grand conspiracy of business owners. In part it's due to companies dropping people, but a sizeable chunk of the change is simply due to programmes like S-Chip, which encourage families to drop their coverage; and an ageing population transitioning into Medicare.

Yeah, but the ageing population transitioning into Medicare isn't contributing to rising levels of uninsured people. Anybody who came off employer-sponsored insurance rolls and went onto Medicare wouldn't be counted as "uninsured". Would they? That would be bizarre. So on the private sector side of the increase in uninsured, we're talking about companies that no longer cover their workers or workers moving from companies that do to companies that don't, and the S-Chip factor you mention.

Well, let us look at this broken down into quintiles. That means each 20% ofthe population. Until then no conclusions can be drawn.

As mentioned above, while household incomes rose, personal incomes declined. Superficially, this indicates movement to more work at lower paying jobs. More two crummy job households. Those jobs are less likely to provide health insurance as a perk.

John Furie Zacharias

People may notice that blip in the data for the year 2000 where the percent uninsured dropped. Apparently that was simply due to redesigning the questions that year going forward.

"Superficially" indeed, Njorl. I just took a 60% paycut, and moved from a job that provided health insurance to one that didn't. Am I unhappy? Not at all: at my new job I work from 12:30 to 2:40 five days a week, and the first half hour is just keeping an eye on some kids eating lunch. I switched from full-time to part-time teaching, and now I'm getting paid just enough to live on (and to pay my own health insurance) to do something I would gladly do for free -- teach intermediate and advanced Latin to kids that are quite willing to learn -- with plenty of free time to write a book. In short, taking a large pay cut and losing free health insurance is sometimes the path to happiness.

"transitioned"; urrgh. Can we go back to British English please?

What military retention shortfall? The Army is the only branch that has missed its recruiting goals for any month since the war began. Overall, they are at their authorized strength because of reenlistments. I believe the active Air Force has too many people and needs to force some out.

IIRC, the Reserves were having issues, but I don't believe they are covered by government medical insurance while on Reserve status.

My biggest problem is trying to coordinate benefits between my wife's insurance, and mine. What a system, the insurance companies make money if anything is lost or delayed. Guess what always happens?

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