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The Basics

Public health plan? 29% have one now

Health coverage is shifting: Public health coverage is growing, and fewer Americans are covered by employer-sponsored plans, new census figures show.

By MarketWatch

The slice of the U.S. health insurance pie consumed by people in government programs grew last year as more Americans received coverage from Medicare and Medicaid and fewer were covered by private insurance, according to a new report.

The number of people with public health coverage of all types, including the State Children's Health Insurance Program, or S-Chip, ballooned to 87.4 million from 83 million in 2007, according to the U.S. Census Bureau. Twenty-nine percent of people were covered by government programs.

"There's been an increase in the number with government health insurance every year since 1999," said Matt Brault, a statistician with the Census Bureau, noting that part of the rise may be attributable to population growth.

"In all of our debate over whether the government does things well or not, this shows the value of the government safety-net programs," said Dr. Georges Benjamin, executive director of the American Public Health Association. "They're there when you need them."

At the same time, there was continued erosion in employer- and union-sponsored health insurance, which saw their share of the pie decline to 58.5% in 2008 from 59.3%. About 1 million people lost job-based coverage, leaving the number at 176 million. In 2000, employer-sponsored insurance covered 64.2% of people, or 179.4 million Americans.

The number of people buying private insurance for themselves remained steady at 26.8 million last year, the same as it's been since 2000. (See "How to buy your own health insurance.")

The number of people who lack health coverage ticked up to 46.3 million in 2008 from 45.7 million the previous year. (See "A survival guide for the uninsured.")

But fewer children went without coverage last year due largely to expansions in Medicaid and S-Chip. In 2008, nearly 10% of children under age 18 were without health insurance, down from 11% in 2007. There were 7.3 million uninsured kids last year, the lowest number and rate since 1987.

The findings come at a pivotal time for national health-reform efforts. President Barack Obama described the perils of maintaining health insurance when he recast his bid for sweeping legislation in a prime-time address to Congress on Sept. 9. (Read more on the Obama speech.)

"We are the only advanced democracy on Earth -- the only wealthy nation -- that allows such hardships for millions of its people," Obama said. "There are now more than 30 million American citizens who cannot get coverage. In just a two-year period, one in every three Americans goes without health care coverage at some point. And every day, 14,000 Americans lose their coverage. In other words, it can happen to anyone."

Connection to employment

People who don't have health insurance are among the most talked about and least visible groups in the push to overhaul the nation's health care system, and their ranks grew last year. Because of the patchwork way coverage is structured until a person ages into Medicare eligibility, the prospect of being uninsured is a problem confined to the early and middle parts of life. Last year, 20% of adults under age 65 were uninsured compared with less than 2% of people over 65.

"Without the public safety net, the number for 2008 would've been considerably higher than what (the report) portrayed," said Ron Pollack, executive director of Families USA, a health-care advocacy group in Washington.

The present uninsured rate is likely significantly higher as a result of the recession's escalating job-loss toll this year, Pollack said. Most working-age Americans get health insurance through their jobs. As the unemployment rate ratchets up, more people lose coverage they can afford.

In 2008, the unemployment rate ranged from a low of 4.8% to a high of 7.2%, according to the Labor Department. In January of this year, the jobless rate was 7.6%. It continued to rise over the next seven months, hitting 9.7% in August, the highest level in 26 years.

"Our assumption is the number of people who are uninsured at this moment probably comes close to 50 million," Pollack said. "Past studies show that for each 1% increase in the unemployment rate, approximately 1.1 million people are added to the ranks of the uninsured."

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The overall percentage of uninsured Americans was statistically unchanged at 15.4% last year.

Some analysts say the census numbers understate the problem because survey participants are asked whether they had coverage during any part of the calendar year. If someone had health insurance for the first quarter but then was without it for the next nine months, for example, they wouldn't be counted as uninsured.

Continued: Bracing for sticker shock

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