Growth in uninsured Americans outpacing federal spending on the healthcare safety net

Healthcare Purchasing News, Dec, 2005

At a policy briefing examining the latest health coverage trends and the implications for the nation's healthcare safety net, the Kaiser Commission on Medicaid and the Uninsured (KCMU) highlighted five reports that profile the growing uninsured population and portray the healthcare safety net as increasingly straining to meet uninsured people's needs.

New analysis found that, as the number of uninsured Americans increased by 4.6 million from 2001 to 2004, federal safety net spending per uninsured person fell from $546 to $498 during the same period. After adjusting for inflation, total federal spending for care for the uninsured increased by 1.3 percent from 2001-2004 while the number of uninsured increased by 11.2 percent. These trends resulted in an 8.9 percent decline in spending by the federal government per uninsured person. The analysis of federal spending on the healthcare safety net, authored by Jack Hadley and colleagues at The Urban Institute, documents that federal support for community health centers increased by more than 50 percent over the past four years, but still only accounts for less than 3 percent of total federal spending on the healthcare safety net. Another Commission study, authored by John Holahan and Allison Cook of The Urban Institute finds that all of the six million increase in the number of uninsured from 2000-2004 was among adults and two thirds of the increase was among people with incomes below 200 percent of poverty (about $39,000 for a family of four in 2004). Both adults and children were affected by the 4.6 percentage point drop in the share of the nonelderly with employer coverage (67.8% to 63.3%), but children were able to obtain alternative coverage through Medicaid and the State Children's Health Insurance Program. About half of the growth in the uninsured was among young adults (ages 19-34) who experienced sharp declines in employer coverage rates. Fifty four percent of the growth occurred in the Southern region of the country which experienced the greatest growth in both the general population and low-income population combined with the largest decrease in employer coverage.