Federal Spending on Health Care Lagging Increase in Uninsured

November 4, 2005 (PLANSPONSOR.com) - The Kaiser Commission on Medicaid and the Uninsured (KCMU) issued five reports portraying the government's health care provisions as increasingly straining to meet the uninsured's needs.

KCMU found that, as the number of uninsured Americans increased by 4.6 million from 2001 to 2004, federal safety net spending per uninsured person fell from $546 to $498 during the same period. After adjusting for inflation, total federal spending for care for the uninsured increased by 1.3% from 2001-2004 while the number of uninsured increased by 11.2%. These trends resulted in an 8.9%decline in spending by the federal government per uninsured person, according to a KCMU press release on the report’s findings.

The analysis of federal spending on the health care safety net, authored by Jack Hadley and colleagues at The Urban Institute, documents that federal support for community health centers increased by more than 50% over the past four years, but still only accounts for less than 3% of total federal spending on the health care safety net. The authors noted that because more than 70% of federal support for the uninsured flows through Medicare and Medicaid, which are both under budgetary pressures, “it is unlikely that future funding will be able to close the gap or make up the difference” in the increase in the uninsured and funding for their care.

Another Commission study highlighted today, authored by John Holahan and Allison Cook of The Urban Institute finds that all of the six million increase in the number of uninsured from 2000-2004 was among adults and two-thirds of the increase was among people with incomes below 200% of poverty (about $39,000 for a family of four in 2004). Both adults and children were affected by the 4.6% drop in the share of the non-elderly with employer coverage (67.8% to 63.3%), but children were able to obtain alternative coverage through Medicaid and the State Children’s Health Insurance Program.

That same study found that about half of the growth in the uninsured was among young adults (ages 19-34) who experienced sharp declines in employer coverage rates. Fifty-four percent of the growth occurred in the Southern region of the country, which experienced the greatest growth in both the general population and low-income population combined with the largest decrease in employer coverage. This contributed to the 3.2 million increase in uninsured people in the South alone.

A study also authored by Holahan and Cook revealed that the majority of the growth in the uninsured in the US is among native citizens, so the immigrant population is not a driving force in the current trends.

The series of reports can be found here .