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Last Updated: Tuesday, 30 September, 2003, 16:50 GMT 17:50 UK
US health care coverage shrinks

By Steve Schifferes
BBC News Online economics reporter

The percentage of Americans without health insurance is at its highest for a decade as the recession and state spending cutbacks take their toll.

US hospital
Not everyone can get health coverage
The world's richest economy is finding it increasingly difficult to provide health care for its citizens.

New figures from the US Census Bureau show that the number of people without health coverage increased sharply last year to 43.6m, rising by 2.4m, the largest increase in a decade.

Nearly one in six Americans - or 15.2% of the population - lack health coverage in 2002, compared to 14.6% in 2001.

Experts expect the total to rise further in 2003, as more unemployed people lose their coverage and companies cut back on their provision for existing workers.

Employers under pressure

Most Americans of working age receive their health coverage through their work - but employers are increasingly reluctant to pay up.

The proportion of employees covered by health insurance dropped from 63.6% in 2000 to 61.3%.

And many employers, faced with health care costs rising by 14%, have also cut back on the range of coverage or increased the amount workers have to pay as part of their health care plan.

"Clearly employers are struggling to hang on to their coverage," said Kate Sullivan, director of health care policy for the US Chamber of Commerce.

The cutbacks are biggest for small companies.

Less than one-third of workers employed in firms with less than 25 workers have health care coverage, and only a half get coverage in firms employing less than 100 workers.

Medicaid under strain

The poor under retirement age and workers who lose their jobs, after a brief transition period where they continue to receive coverage, must rely on Medicaid, a joint state and Federal programme.

But budgetary pressures have meant than many states are cutting back on who is entitled to Medicaid benefits, just as the numbers in need are increasing.

Texas has the largest number of uninsured people, with one in four (24%) of its population without health care, while the lowest rate (8%) is in Minnesota.

About 30% of those in poverty, and one-third of foreign immigrants, lacked health care coverage.

But the number of middle class Americans, with annual incomes of between $25,000 and $75,000, who lack health insurance, rose by 1.4m to 21.5m.

Problems of reform

The US health secretary, Tommy Thompson, said the figures showed that the "the nation must do more" to help the uninsured.

"Congress must give us more tools to provide more care to more families," he added.

But there is a sharp split in Congress over how to approach the health care crisis, which is also paralysing efforts to agree a new prescription drug benefit for elderly citizens on Medicare (the government health insurance scheme).

Many Republicans fear that the expansion of benefits to more people will prove too expensive for the government to fund.

They would like to make more use of the private sector, both in providing prescription drugs for the elderly and health insurance for the uninsured.

They favour giving tax credits to make it cheaper for the uninsured to purchase private insurance on the open market.

Democrats would prefer to increase subsidies to state governments so that they can expand Medicaid programmes.

Democratic Senator Max Baucus said the figures showed the problem of the uninsured was getting more serious.

The Democrats are hoping to make health care, along with the economy, an electoral issue in 2004, and nearly all the Democratic presidential candidates have proposed measures to increase the scope of health coverage.

"The failure to do so may have significant repercussions in the 2004 elections," said Ken Pollack of Families USA, a liberal pressure group.

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