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How Is Health Insurance Affected by the Economy? Public and Private Coverage Among Low-Skilled Adults in the 1990s.

October 2005

Helen Levy, University of Michigan, Economic Research Initiative on the Uninsured.

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In 1992, 38.6 million Americans were uninsured (DeNavas-Walt et al. 2004). Eight years later, at the end of the longest economic expansion in the US since World War II, the number of uninsured had increased to nearly 40 million (DeNavas-Walt et al. 2004). Why did the booming economy not translate into gains in insurance coverage? This puzzle is even more pronounced when we look at trends by education level, since low-skilled individuals experienced both the largest gains in employment and the largest declines in insurance coverage. Among high school dropouts between the ages of 25 and 54, the fraction employed increased from 67 percent to 71 percent and mean real family income increased by more than fifteen percent. But the fraction of dropouts who were uninsured increased from 36 percent to 40 percent. What happened?

Health, Health Insurance, and Health Care