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U.S. Poverty Rate Drops; Ranks of Uninsured Grow

President Bush released a statement describing the figures as confirmation of the wisdom of his approach. "When we keep taxes low, spending in check and our economy open -- conditions that empower businesses to create new jobs -- all Americans benefit," he said.

The president said that "challenges remain" in reducing the number of people without health insurance.

The addition of about 2.2 million people to the ranks of those without medical insurance was attributed largely to continuing declines in employer-sponsored insurance coverage, census officials said.

In all, 15.8 percent of Americans lacked coverage last year, up from 15.3 percent in 2005.

Children fared worse. Last year, 11.7 percent of people younger than 18 lacked health insurance, up from 10.9 percent in 2005. The percentage of uninsured children has increased two years in a row after declining for at least five years, according to the census data.

The new figures stirred debate between Congress and the White House over the future of the $5 billion a year State Children's Health Insurance Program, which helps insure 6.6 million children whose families earn too much to qualify for Medicaid but not enough to afford insurance on their own.

The Senate and House have passed separate bills that would increase funding and make it possible to enroll millions of children for coverage. Bush has promised to veto the bills, saying that they would inappropriately increase the federal role in health care and extend coverage to middle-class families that might otherwise get private insurance.

The administration recently announced new administrative rules that will make it harder for states to enroll children from families that earn more than 250 percent of the poverty level, or $51,625 for a family of four.

U.S. Rep. Frank Pallone Jr. (D-N.J.), chairman of a House subcommittee on health, said in a statement that he is "particularly troubled" that the number of uninsured children has risen for two years.

"Clearly, these disturbing increases over the last two years demonstrate a need to strengthen this important health-care program that provides access to health insurance for our most vulnerable children," Pallone said, referring to the State Children's Health Insurance Program. "I hope these sobering statistics will serve as a wake-up call to President Bush to reconsider his veto threat of this critically important legislation."

But Fratto said Bush remains convinced that the program should remained focused on low-income uninsured children and that expanding it would encourage some middle-class parents to switch their children from private coverage to the government.

"The target population for SCHIP is not being adequately served," Fratto said. "It's not a question of whether SCHIP should be expanded; it's making SCHIP work in a way that it was intended to work."

The figures also reflect a continuing decline in employer-provided coverage. The percentage of people covered by employer-based health insurance fell to 59.7 percent in 2006, down from 60.2 percent in 2005. The figure was 64.2 percent as recently as 2000.

Business leaders have said the spiraling costs of health insurance are threatening their competitiveness in the global market, forcing companies to shift more expenses to workers or consider dropping the benefit.

The new census data show that many of the newly uninsured are working Americans from middle- and high-income families. Of the 2.2 million people who became uninsured in 2006, 1.4 million had a household income of $75,000 or higher. About 1.2 million of the newly uninsured worked full time.

"This is about the problem of the uninsured spreading to the middle class and working people," said Harvard Medical School professor Stephanie J. Woolhandler, a liberal advocate of creating a government-run national health insurance program. "That's the thing that's emerging newly this time."

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