Tuesday, August 26, 2008

New Report on Poverty & Uninsured Doesn't Add Up

If America is no poorer than before, why did so many people qualify for Medicaid, government sponsored health insurance for low income citizens? With the Bush administration blocking state efforts to expand coverage during 2007, what drove legions of Americans to Medicaid? Was it our faltering economy? And what was the impact of citizenship requirements on coverage? How much of the expansion in government insurance was Medicare Advantage, a highly profitable product line for health insurers? Let's look at the numbers that drove my questions.

The Census Bureau released its 2007 estimates for income and health insurance coverage this morning. It states:

1. The official poverty rate in 2007 was 12.5 percent, not statistically different from 2006.

2. In 2007, 37.3 million people were in poverty, up from 36.5 million in 2006.

3. The poverty rate increased for children under 18 years old (18.0 percent in 2007, up from 17.4 percent in 2006)

4. Poverty rates in 2007 were statistically unchanged for non-Hispanic Whites (8.2 percent), Blacks (24.5 percent), and Asians (10.2 percent) from 2006. The poverty rate increased for Hispanics (21.5 percent in 2007, up from 20.6 percent in 2006).

The total U.S. population grew from 296.4 million in 2006 to 298.7 million in 2007. With approximately 15% of our nation uninsured, one might expect that number to grow correspondingly, by some 300,000 people. But it didn't! The number of people without health insurance fell by 1.3 million, according to the Census Department. It fell from 47 million to 45.7 million uninsureds.

Did employers step up and cover more workers? Not according to the report:

The percentage of people covered by private health insurance was 67.5 percent, down from 67.9 percent in 2006. The percentage of people covered by employment-based health insurance decreased to 59.3 in 2007 from 59.7 percent in 2006. The number of people covered by employment-based health insurance, 177.4 million, was not statistically different from 2006.

If employers didn't pick up the slack, who did? Government programs providing coverage for the elderly and poor grew by some 2.7 million people. Medicaid, coverage for the poor, made up 1.6 million of the total.

Yet, despite all this good news, 8.1 million children have no health insurance. The breakdown by race shows:

20.5 million uninsured Whites (non-Hispanic)
7.4 million Blacks without coverage
14.8 million Hispanics with no health insurance

The Census Department estimated the number of uninsureds by region of the country (page 22 of the report). The Northeast had the greatest percentage decrease, 7.5% or 500,000 people Massachusetts implemented a statewide program to ensure all residents have health insurance coverage. Coincidence or cause and effect?

The report shows the expansion in coverage was limited to households making less than $50,000. Very little movement occurred in categories $50,000 and above. The Bush administration worked diligently to restrict states wanting to change income requirements for Medicaid and Children's Health Insurance. It remains to be seen how those efforts impacted the number of uninsured.

The report did not break down Medicare recipients into standard Medicare vs. Medicare Advantage. I mined three large health insurers 2007 annual reports for some insight.

Humana recorded an increase of 140,000 Medicare Advantage enrollees from 2006 to 2007.

WellPoint's report stated "Senior membership increased 57,000, or 5%, driven by growth in Medicare Advantage membership, partially offset by a slight decline in Medicare Supplement membership."

UnitedHealth had a different story. The number of individuals served by Medicare Advantage products as of December 31, 2007 decreased by 75,000, or 5%, from 2006. Yet, rate increases on Medicare Advantage contributed to a 7% revenue growth for that corporate segment.

There is an odd tension in all these numbers. Is the pursuit of profit working against getting citizens covered? While Harry and Louise are back on TV encouraging change, who are they supporting? Insurance companies are doing quite well. They even make money off the expanded Medicaid and CHIP coverage as state contractors. They currently make a nice profit on Medicare Part D and Medicare Advantage.

Who will win out as this mixed Census Department report is digested? Will it be used as a club to beat up "illegals", blacks, Hispanics, and the poor? Will it serve as a guiding light, a beacon that calls us to do better by our fellow citizens? Will insurers' 15% annual return get higher priority than the uninsured American?

Stay tuned! A donnybrook is on the horizon as businesses look to shed that pesky health insurance benefit. Union leaders and our elected shills are paving the way for that to happen. The question is how they'll use this report to accomplish their aim.