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More Americans go without health coverage despite strong economy, Census Bureau finds

Incomes are rising and poverty is falling, but the gap between the rich and poor has grown

An employee adds decorative brass tacks to a sofa in Hickory, N.C. (Logan Cyrus/Bloomberg News).

The proportion of Americans without health insurance grew significantly last year for the first time this decade, even as the economy’s strength pushed down the poverty level to its lowest point since 2001, according to federal data released Tuesday.

The finding that 27.5 million U.S. residents lacked coverage in 2018, based on a large U.S. Census Bureau survey, reverses the trend that began when the Affordable Care Act expanded opportunities for poor and some middle-income people to get insurance.

Taken together, the census numbers paint a portrait of an economy pulled in different directions, with the falling poverty rate coinciding with high inequality and the growing cadre of people at financial risk because they do not have health coverage.

As more Americans found jobs, the poverty rate fell last year to its lowest level since 2001, and middle-class income inched marginally higher. Median U.S. income — the point at which half of U.S. families earn more and half earn less — topped $63,000 for the first time, although it was roughly the same level as it was 20 years ago, after adjusting for inflation.

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“Median household income today is right where it was in 1999. We’ve seen two decades with no progress for the middle class,” said University of Michigan economics professor Justin Wolfers. “The economy is producing more than before, but the gains aren’t being shared equally.”

Incomes rose substantially in big cities last year but declined in smaller ones. And poverty rose for adults over 25 without high school diplomas.

“Some of the folks who fueled the Trump candidacy and presidency still aren’t doing great,” said Matt Weidinger, an American Enterprise Institute fellow who watches poverty trends.

With health care a central issue in the 2020 presidential campaigns and a prime voter concern, the fresh evidence that insurance is slipping further out of Americans’ reach will probably escalate partisan warring about Americans’ access to affordable coverage.

Last year was the first time since 2009 that both the number and the proportion of Americans without coverage rose significantly from the year before.

The change was driven primarily by a decrease in public insurance for the poor, with enrollment in Medicaid dropping by 0.7 percent, the data show. The uninsured rate spiked especially among adults who are Hispanic and foreign-born. Coverage also dwindled among children who are Hispanic and naturalized citizens.

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Health policy experts interpreted those patterns as evidence of a chilling effect from the Trump administration’s efforts to restrict several forms of public assistance, including Medicaid, for immigrants seeking to remain in the United States. In addition, some states have been clamping down on eligibility rules for Medicaid.

“The word has gone out if you use Medicaid, then you are a public charge and you’re liable not to get a green card,” said Sara Rosenbaum, a George Washington University health law and policy professor, who called the patterns of health coverage for immigrant children “alarm bell territory.”

“People are not only not enrolling, they are coming in [to Medicaid offices] and asking to be disenrolled.” Rosenbaum said.

The Trump administration cheered the news that the official U.S. poverty rate fell to 11.8 percent last year (38.1 million people), the lowest since 11.7 percent in 2001, as a sign the president’s policies are working to boost the economy. Businesses have been hiring minority and low-skilled workers at unusually high rates, helping give jobs and opportunities to Americans who struggled for years to get a chance.

“Employment is the best way out of poverty,” said Tomas Philipson, acting head of Trump’s Council of Economic Advisers. “President Trump’s critics wrongly assert that government programs and handouts are the only way to lift people out of poverty, but today’s data tells a different story.”

The poverty rate for adults who work full-time all year round is 2.3 percent, much lower than the poverty rate for people who do not work, which is nearly 30 percent.

The fall in the U.S. poverty rate has been driven largely by people moving from part-time to full-time work, helping boost incomes. Last year alone, more than 2 million people found full-time jobs, the census report said.

“We have found quite a big increase in full-time, year-round work that would tend to bring up incomes for working people,” said Trudi Renwick, an assistant division chief at the Census Bureau.

But income inequality also remains near the highest levels of the past half-century, according to census data. Recent wage gains by lower-income workers who have found jobs and benefited from minimum wage increases in many states have not been enough to close the long-running trend of the wealthy seeing far larger income gains than the middle or lower classes.

Incomes for families earning about $15,000 or less have fallen since 2007, according to the latest census data, while incomes households bring in about $250,000 a year have grown more than 15 percent.

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The Census Bureau’s yearly data on health insurance, meanwhile, has been scrutinized by both supporters and opponents of the ACA as evidence of how well the law is working. Expanding insurance access was a main goal of the ACA, the statute forged by Democrats nearly a decade ago that has reshaped much of the health-care system. President Trump and other Republicans contend the law is fatally flawed, while Democrats maintain it has been undermined by recent GOP policies.

The availability of insurance is influenced by a variety of factors, including economic conditions, because most insured residents get coverage through an employer. But as Trump works to dismantle the law and liberal Democratic candidates seek to replace it with a government-financed health-care system, both sides can find ammunition for their interpretation of why the nation’s uninsured rate has started rising again.

Republicans point to how, as premiums escalate, fewer people buy health plans through the ACA’s marketplaces unless they qualify for federal subsidies. Democrats point to how major tax changes, adopted by a Republican Congress at the end of 2017, eliminated the financial penalty for those who violate the ACA’s requirement that most Americans carry health insurance — removing one motivation to stay insured.

Sen. Bernie Sanders (I-Vt.) a candidate who has long called for “Medicare-for-all,” tweeted on Tuesday: “Mr. Trump lied. He promised to strengthen health care — instead, he has done everything he can to sabotage the Affordable Care Act. The result: Nearly two million people joined the ranks of the uninsured last year.”

The new figures for 2018 show that the uninsured rate increased to 8.5 percent of the population from 7.9 percent the year before. In contrast, some 9 million Americans gained coverage between 2013 and 2014, the year that Medicaid expanded in many states and ACA insurance marketplaces opened for individuals and families unable to get affordable health plans through work.

Tuesday’s data make clear that the contraction of insurance has been broad. Around the country, insurance coverage worsened in eight states and improved in three states. For the first time, the Census Bureau broke out the proportion of Americans buying health plans through the health law’s insurance marketplaces. It shows that 3.3 percent of people last year got their coverage through such a marketplace. The breakout reinforces how the ACA’s health plans, while attracting considerable political attention, account for only a fraction of the nation’s health insurance.

While Medicaid enrollment fell, the proportion of Americans covered through employer-based insurance did not change significantly. Meanwhile, enrollment in Medicare, the program for elderly and disabled people, grew slightly — probably as a result of the nation’s expanding population of older residents, Census Bureau officials said in releasing the data.

The bureau’s Current Population Survey is widely regarded as the most reliable portrayal of health insurance in the United States, but there have been other clues the ranks of the uninsured are swelling. In July, the U.S. Centers for Disease Control and Prevention issued findings from the National Health Interview Survey that the number of Americans uninsured at the same they were asked increased from 28.9 million in 2017 to 30 million last year.

The Census Bureau’s CPS counts people as uninsured if they lacked coverage throughout the year.

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