Center for Studying Health System Change

Rising Health Insurance Costs Key to Decline of Private Coverage for Children

Health Affairs Study Examines 25 Years of Children’s Health Coverage

News Releases
September 14, 2004

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ASHINGTON, D.C.—In recent years, rising health insurance costs have likely played a key role in the decline of American children with private health coverage, according to a study by researchers at the Center for Studying Health System Change (HSC) and the Agency for Healthcare Research and Quality (AHRQ) published in the September/October edition of the journal Health Affairs.

The study—Children’s Health Coverage: A Quarter-Century of Change—examined coverage trends between 1977 and 2001, based on a series of medical expenditure surveys conducted by the federal government. The study found that the rate of uninsured children increased sharply from 8.5 percent in 1977 to 11 percent in 1987 before declining to 8.3 percent in 2001.

At the same time, the proportion of children with private health insurance steadily declined from 79.1 percent in 1977 to 68.4 percent in 2001, as the proportion of children with public coverage steadily increased from 12.4 percent in 1977 to 23.3 percent in 2001.

"Despite the steady decline in private coverage, health insurance coverage rates for children are at their highest level since at least the late 1970s, primarily because of increases in public coverage," said Peter J. Cunningham, Ph.D., a senior health researcher at HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation. Cunningham was a coauthor of the study with Jim Kirby, a service fellow at AHRQ.

Initially, much of the decline in children’s private health coverage was attributable to increased poverty among children. Between 1977 and 1987—a period of high unemployment, stagnant incomes and rising numbers of single-parent families—the proportion of children living in poverty increased from 13.7 percent to 20.4 percent. Although the proportion of children living in poverty declined to 16.3 percent in 2001 as the economy improved in the late 1990s, private health coverage rates for children continued to decline.

"Between 1977 and 1987, changes in family circumstances—increased poverty and the rise in single-parent families—played an important role in the decline in private health coverage for children," Cunningham said. "Since 1987, however, rising health insurance costs have probably played a more important role in the continuing decline in private coverage for children."

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.