Health Coverage in an Economic Downturn: Impact of Tight Budgets on Families and States

The economic downturn has strained family finances and prompted some Americans to cut back on medications and forgo preventive care and visits to the doctor. At the same time, the downturn has triggered declines in tax revenue that inhibit states’ ability to meet rising Medicaid program costs as enrollment spikes during economic hard times. Many states are expected to struggle to close budget gaps despite moves by Congress and the Obama Administration to temporarily boost federal matching money for state Medicaid programs.

The Foundation has created a number of resources that shed light on how Americans and states are faring and provide background on the uninsured, employer-sponsored health insurance costs, trends in states’ Medicaid enrollment and spending and prior efforts to shore up the Medicaid program during a slumping economy.

Public Opinion: Kaiser Tracking Polls

• The March Health Tracking Poll finds that 57 percent of all adults say they have put off some sort of needed medical care over the past 12 months because of costs, and one third say they or someone in their household has had problems paying medical bills over the past year.

Family Budgets, Health Coverage and Unemployment

• Assessing the Risk of Becoming Uninsured After Leaving a Job: A Look at the Data
  This fact sheet examines the impact of unemployment on health insurance coverage by using data from 2004 to 2007 (before the current recession) to assess the increased risk of becoming uninsured among those who are no longer employed.
• The COBRA Subsidy and Health Insurance for the Unemployed
  This issue brief and related fact sheet examine the workings, potential impact and limitations of temporary subsidies created by the American Recovery and Reinvestment Act of 2009 to help people maintain their employer-sponsored health coverage after a layoff.
• Families Turn to Medicaid and SCHIP
  This brief, based on focus group discussions, examines the experiences of families who have lost jobs and health coverage.

• Rising Health Pressures in a Recession: A Look at Four Communities
  This report draws on interviews and focus groups to examine at the grassroots levels the experiences of families, employers, safety-net providers and community organizations in four U.S. communities: Beloit, Wisc.; Tampa-St. Petersburg, Fla.; Long Island, N.Y.; and Sonoma, Calif. There is a companion video.
• The Effects of the Economic Recession on Communities of Color focuses on the challenges facing racial minorities.
• Emergency Departments Under Growing Pressure examines the recession’s impact on hospital emergency departments.
• How Families Affected By Cancer Are Faring in the Recession
  This report profiles six cancer patients and survivors and the challenges they face to help gauge how the recession and rising unemployment is affecting workers who are most in need of ongoing medical care.
• Snapshots from the Kitchen Table
  This report and video on family budgets and health care illustrate the financial struggles of many families in the U.S. and show the central role of health care costs and coverage in a household’s economic stability.
• Rising Unemployment, Medicaid and the Uninsured examines how increases in the unemployment rate changes health coverage and the financial implications for state budgets. A separate snapshot projects state financing effects into fiscal 2011.

• Impact of Unemployment: A one percent rise in the nation’s unemployment rate is projected to increase the number of uninsured by 1.1 million people. See the chart.
• Changes in Health Insurance Coverage, 2007–2008: Early Impact of the Recession
  This issue brief examines trends in health insurance coverage from 2007 to 2008, a period marked by the start of a deep recession. It finds that the share of the nonelderly population covered by employer-provided insurance declined, the share covered by public programs increased and the number of uninsured people continued to rise. The downturn affected coverage for adults differently that it affected coverage for children.

Implications for States and People on Medicaid and SCHIP

• Resources Examine Medicaid Enrollment Growth And State Budget Pressures From Recession
  This package of resources examines the record enrollment growth in Medicaid between June 2008 and June 2009 and provides a mid fiscal-year 2010 update on key state Medicaid issues, including the impacts of the economic downturn.
• The Crunch Continues: Medicaid Spending, Coverage and Policy in the Midst of a Recession
  The annual 50-state survey by the Foundation’s Kaiser Commission on Medicaid and the Uninsured finds sharp rises in Medicaid enrollment and spending during the economic downturn, straining state budgets and pressuring officials to curb program costs despite extra financial help from the federal government.
• Aging Out of Medicaid: What is the Risk of Becoming Uninsured?
  This policy brief uses the most recent available data to examine the patterns of health coverage for young adults after they turn 19 and typically are no longer eligible for Medicaid or the Children’s Health Insurance Program.
• Medicaid and State Budgets: From Crunch to Cliff
  This fact sheet discusses the status of Medicaid and state budgets in light of the continuing recession and the federal fiscal relief provided to state Medicaid programs through the American Recovery and Reinvestment Act (ARRA).

• Fact Sheet: American Recovery and Reinvestment Act (ARRA): Medicaid and Health Care Provisions
  A concise examination of federal assistance for state Medicaid programs and other key health provisions in the $787 billion economic stimulus package enacted in February 2009.
• Webinar: Health Policy Provisions of ARRA
  This webinar provides an overview of key health policy aspects of the American Recovery and Reinvestment Act (ARRA), including provisions on Medicaid, COBRA and health information technology.
• Fact Sheet: State Fiscal Conditions and Medicaid
  Demand for Medicaid increases when the economy is weak, driving up enrollment and costs just as state budgets tighten

• The Role of Medicaid in State Economies
  This new analysis of 29 studies in 23 states examines the economic stimulus derived from Medicaid spending, and the adverse effects of Medicaid spending cuts.

Employer-Sponsored Health Insurance Costs

• 2009 Kaiser/HRET Employer Health Benefits Survey
  This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including changes in premiums, employee contributions, cost-sharing provisions, and other relevant information.

State Data

Statehealthfacts.org has extensive state-specific data illustrating the effects of a downturn.

• State budget shortfalls
• Current unemployment rate
• Foreclosures, unemployment, food stamps

The Uninsured

• The Uninsured: A Primer
  This primer reviews the basic profile of the uninsured population, how they receive care, the latest trends in health insurance coverage, and what the options are for increasing coverage.
• Five Basic Facts on the Uninsured
  This brief provides basic facts that explain why so many people lack coverage and how being uninsured affects their health and financial security.