Changes In Insurance Coverage: 1994-2000 And Beyond

BETHESDA, Md. — While enrollment in employer-sponsored health insurance plans surged by nearly 16 million during the economic boom of the 1990s, the percentage of uninsured Americans remained the same, according to a new article published on the Health Affairs Web site (www.healthaffairs.org).

That's a trend that should worry policymakers because so many Americans have lost their jobs during the current economic downturn, according to the article by Urban Institute scholars John Holahan and Mary Beth Pohl. How much the number of uninsured will rise will also depend on how employers respond to rising health insurance premiums, how much individual-market insurance premiums rise and how governors respond to state Medicaid shortfalls.

By 2000, the percentage of Americans covered by employer-sponsored insurance grew to 67.3 percent in 2000, up from 64.3 percent in 1994. Economic growth fueled those coverage expansions, as Americans got better jobs and climbed up the economic ladder, the authors write.

But that expansion in employer-sponsored insurance masked some troubling trends. Medicaid and other state-based coverage of adults dropped significantly between 1994 and 1998, although it stabilized after 1998. Holahan and Pohl write that expanding employment, as well as welfare reform, helps explain that trend.

Meanwhile, private nongroup coverage also fell. That could be explained by continuing problems in the individual insurance market, but also can be explained by expanding employment and employer-based coverage that allowed many of those to drop individual-market insurance policies.

Between 1999 and 2000, the number of uninsured actually fell by 570,000. This was wholly attributable to increases of coverage of children, who benefited both from expansions of coverage through employers and also from expanded enrollment in Medicaid and state children's health insurance programs. Coverage of adults actually fell because increases in employer coverage were offset by declines in coverage elsewhere.

For interviews with the authors, please contact the Urban Institute Public Affairs Office at (202) 261-5709, or paffairs@ui.urban.org.

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research.

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