Ranks of uninsured Americans grow

The percentage of people with job-based health insurance dropped again last year, helping push up the level of uninsured Americans to 15.9% of the population, the highest since 1998.

Estimates released Tuesday by the Census Bureau show that 46.6 million people lacked health insurance in 2005, up from 45.3 million in 2004. Unlike in other recent years, there was no increase in the rate of enrollment in government-based programs, such as Medicaid, which had helped to offset declines in private insurance.

Job-based health insurance, which is the way most Americans get their coverage, began falling in 2001, even as health insurance premiums rose at double-digit annual rates. Last year, premium growth averaged 9.2%, lower than in previous years, but still three times inflation.

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"It's especially worrisome because if we get into another economic downturn, there will be even fewer people with access to employer coverage or fewer who can afford it," says Peter Cunningham, senior fellow with the Center for Studying Health System Change, a non-partisan Washington research group.

Reasons for the decline in job-based coverage are many, including people losing jobs, employers not offering insurance and workers choosing not to enroll.

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The Census estimates, which are based on surveys that seek to determine how many people were without insurance for the entire year, show:

• The percentage of people who received health insurance through their jobs decreased from 59.8% in 2004 to 59.5%. That's the lowest rate since 1993 and below the recent peak of 63.6% coverage in 2000.

• Hispanics had the highest rate of being uninsured, at 32.7%, a rate unchanged from 2004.

• The percentage of children without coverage grew, from 10.8% to 11.2%.

"This really represents the first increase in the percentage of children who are uninsured since 1998," when the State Children's Health Insurance Program went into effect, Cunningham says.

• The number of people who bought their own insurance outside of their jobs fell, from 9.3% of the population to 9.1%, the lowest since the Census began tracking that in 1994, when it was at 12%.

Because employers offer insurance as a way to attract and retain employees, Paul Fronstin of the Employee Benefit Research Institute says unemployment may not be low enough to fuel a rise in job-based health insurance. Unemployment fell from 5.5% in 2004 to 5.1% in 2005 and was 4.8% in July.

"In order to see a turnaround in those uninsured numbers, we'll need to see an unemployment rate in the neighborhood of 4% to 4.5%," Fronstin says.