This policy brief examines the relationship between increases in the unemployment rate and changes in the number of people covered by employer-sponsored health insurance, Medicaid, and the number of uninsured. The analysis projects that if the unemployment rate rises to 7 percent in 2009, Medicaid and SCHIP enrollment would increase by 2.4 million and an additional 2.6 million people would become uninsured. The impacts would increase if the unemployment rate climbs even further. The report also estimates potential state costs for Medicaid, SCHIP and the uninsured, and the potential impact of proportional statewide budget cuts on Medicaid and SCHIP funding.