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45.8 Million and Counting …

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For the fourth year in a row – and for the tenth time since the last national effort to expand health insurance coverage in 1993 – the number of Americans living without health insurance has increased. Today, the Census Bureau released its analysis of the most recent Current Population Survey, which estimates that 45.8 million Americans did not have health insurance during 2004. The last time our nation seriously engaged on this issue, “only” 40 million Americans lacked health care coverage.

This isn’t an accidental crisis, such as a natural disaster – like Hurricane Katrina, which has just devastated the Gulf Coast, and has prompted a national emergency response. Instead, we have chosen a path which results in 45.8 million Americans being likely to suffer more and die earlier because they lack health insurance. Through a combination of tax provisions, entitlement programs and public commitments, we rely on a jerry-rigged system that provides indirect subsidies for some types of private insurance, but no support for other kinds of insurance and health care spending. Similarly, public insurance programs provide coverage for certain categories of people, and no help at all for others who are left out in the cold. At the same time, we are unable to exert serious influence on health care costs, thus placing a growing burden on those lucky enough to have coverage, while the price of health insurance dampens employers’ willingness to create new jobs.

Health care costs continue to escalate, and health insurance becomes more expensive every year. Health spending per privately insured person increased 8.2 percent in 2003 –which is modest in comparison to 11.3 percent per capita growth in 2001, but which still outpaces overall economic growth of 5.6 percent. In fact, growth in per capita health spending has trumped growth in per capita Gross Domestic Product (GDP) every year since 1998. As health care costs increase, premiums increase – and as employer-sponsored health insurance becomes more expensive, employee responsibility for a portion of the premium (pdf) creates new stresses on family budgets. Meanwhile, nearly 27 million Americans purchase health insurance in the individual market – a troubled market that subjects people to significantly higher premiums depending on their health history.

As Americans are priced out of private health insurance, our previous policy choices have created few alternatives. The Medicaid program, which covers lower-income individuals and families who meet certain eligibility restrictions, covered more than 50 million people in 2003. Changes in private insurance coverage, premium increases, and the job loss and income decline associated with the recession fueled Medicaid enrollment growth among families – 11.6 percent from 2000 to 2002, and 7.1 percent from 2002 to 2003. Today’s Census Bureau statistics demonstrate that Medicaid continued to provide a critical safety net in 2004 – and without Medicaid, the number of uninsured individuals would have grown even more. But many Americans – particularly single adults and married couples who do not have children – cannot qualify for Medicaid coverage, no matter how low their income may be. Other public programs – such as Medicare – have strict eligibility requirements related to age and disability, and do not provide a meaningful option for most people who are uninsured.

What can be done? In the short run, we need to make sure that today’s efforts to bail out the leaky boat that is our health care system aren’t stymied by a hole in the bucket. The Medicaid program has provided an essential safety valve during a sluggish economy and ensured that many children who lost employer-sponsored coverage remained insured. But state revenues have not fully bounced-back from the economic downturn, and governors and federal policymakers are looking for budget savings from the Medicaid program. States continue to seek “waivers” of federal Medicaid requirements, which allow them to exert more control over Medicaid spending and result in reduced coverage for people with Medicaid. And Congress intends to find $10 billion in federal Medicaid savings over the next five years as it completes budget legislation this fall. These savings may result in reduced Medicaid eligibility, reduced Medicaid coverage for critical services, or increased financial pressure on Medicaid enrollees.

While protecting Medicaid is important, the long-run challenge is even more significant. Recreating our health care system to ensure that all Americans enjoy a right to affordable health care coverage, improve the value of coverage, and fully finance this investment is a signal challenge for our country. The Center for American Progress has advanced a plan for ensuring universal coverage by strengthening existing sources of insurance coverage, and establishing new options for individuals and businesses to purchase coverage through group arrangements, in combination with financial support to ensure that all can afford coverage. This plan also emphasizes new investments in prevention, quality and health information technology, and is fully financed through a dedicated value-added tax (VAT).

Beyond advancing this – or any other – policy proposal, though, the nation must re-engage in the coverage debate. There is broad support for doing so – more than half of all Americans consider universal coverage a moral issue, and of the 72 percent of Americans who believe that the nation should cover all citizens, more than 60 percent stated that their belief is grounded in moral convictions. In light of the latest numbers on the uninsured, this majority of Americans should be outraged that policymakers have yet to grapple with this moral question. The challenge – if we don’t want to live through another decade of year-by-year increases in the number of Americans living without health insurance – is to transform this conviction into a demand for change.

Karen Davenport is the Director of Health Policy at the Center for American Progress.

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