Americans turned to public health insurance in 2010

WASHINGTON Tue Sep 13, 2011 10:03pm BST

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WASHINGTON (Reuters) - More Americans became reliant on public health insurance and lost coverage sponsored by their employers in 2010, the U.S. government said on Tuesday.

The U.S. Census Bureau's annual report on income, poverty and health insurance coverage showed that more people turned to state and federal programs as employer-based plans became more expensive and as unemployment levels stayed stubbornly high.

About 1.5 million fewer Americans got their health insurance plans covered by their employers in 2010, while 1.8 million more joined government insurance plans.

"What (the Census report) means is that more and more people are dependent on safety-net coverage, specifically the Medicare program, as their lifeline," said Ron Pollack, executive director of Families USA, a patient advocacy group.

The report also showed that just short of 50 million Americans remained uninsured, or 1 million more than in 2009.

President Barack Obama's healthcare reform, the Affordable Care Act passed last year, was designed to expand insurance coverage to some 32 million uninsured when it goes into full effect in 2014.

For Obama, much is pinned to the success of the reform as he faces mounting criticism for growing the size of the federal government through his landmark bill, especially from his Republican opponents hoping to unseat him in the White House in the 2012 election.

Healthcare programs, which account for a large percentage of the federal budget, are also expected to get a close scrutiny from a bipartisan congressional "super committee" that aims to slash at least $1.2 trillion from the U.S. deficit over 10 years.

"Washington is focused on the super committee, but if it cuts Medicare, it means the lifeline that people are depending on will be frayed," Pollack said.

Only a few provisions of the healthcare reform have gone into effect so far, one of which allowed people under the age of 26 to remain covered by their parents' insurance plans.

That age group saw the biggest change in insurance coverage in 2010, the Census report showed. About half a million more Americans aged 18 to 24 received healthcare coverage last year, an increase touted by the Obama administration on Tuesday and attributed to the provision.

"It's the only aspect of health reform that you can possibly point to," said Elise Gould, director of health policy research at the nonpartisan Economic Policy Institute think tank in Washington. "(The numbers) would be worse without health reform, for sure, since it's not like young adults are getting jobs at a higher rate."

The number of people covered by Medicaid, the government program for the poor, increased 1.5 percent to 48.6 million, and Medicare, the government program for the elderly, 2.1 percent to 44.3 million.

Employers remained the biggest source of insurance coverage, with 169.3 million Americans covered by employer-based plans in 2010. That number, however, has been on a steep decline since 2000, when it reached 181.9 million, as such plans get more and more expensive.

"That trend downward I think is what's really of concern ... One of the reasons that even made us look at the reform is that the employer system is eroding," said Shawn Bishop, one of the leading congressional staffers who helped draft the healthcare reform bill. Bishop is now with the Marwood Group, a healthcare advisory and financial services firm.

The full scope of the impact of that healthcare reform still lies ahead, and experts warned it was too early to look to the Census report for hints at its success.

"I really don't think you could spin (the uninsured report) one way or another, that the Affordable Care Act is working or that the sky is falling," said Ipsita Smolinski, an analyst for Capitol Street in Washington. "You're not going to see any major dents in that number until 2014."

(Reporting by Alina Selyukh and Anna Yukhananov; Editing by Gary Hill)

(The following story corrects spelling to Pollack, not Pollock, paragraphs 4, 9)

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