Statement: Robert Greenstein, Executive Director, on Census’ 2009 Poverty and Health Insurance Data

For Immediate Release

Statement: Robert Greenstein, Executive Director, on Census’ 2009 Poverty and Health Insurance Data

WASHINGTON - The Census Bureau data for 2009 reflect the severity of the recent
recession, as poverty rose sharply and the number of uninsured spiked.
The new figures somewhat overstate the rise in poverty, however, because
they do not count the bulk of direct assistance that the 2009 Recovery
Act provided to households, which kept millions of Americans from
falling into — or deeper into — poverty (as a broader measure of poverty
that Census will release later this year is sure to show).

Both the number and percentage of Americans in poverty climbed. The number of poor people rose by 3.7 million, to 43.6 million. The percentage of people in poverty rose from 13.2 percent to 14.3 percent.

These
increases reflect the deep recession and the unusually large amount of
long-term unemployment. The number of jobs dropped by more than 8
million between the start of 2008 and the end of 2009. (More than half
of that loss — 61 percent — occurred before President Obama and Congress
enacted the Recovery Act in February 2009.) In addition, by late 2009,
the share of unemployed workers who had been out of work for more than
six months topped 40 percent, a record for modern recessions. The longer
people are out of work, the more likely that they will fall into
poverty.

Poverty would have risen much higher without the
temporary expansions in unemployment insurance benefits provided by the
Recovery Act and other legislation. In 2008, unemployment benefits kept
900,000 Americans out of poverty. In 2009, by contrast, unemployment
benefits kept 3.3 million Americans out of poverty, an analysis of
today’s data shows. The majority of the increase in UI benefits in 2009
came from the Recovery Act.

Moreover, most Recovery Act
assistance is not reflected in today’s numbers. That is, the Census
Bureau counts unemployment benefits in the official poverty data.
However, the official poverty figures do not count tax credits or
non-cash benefits as income — and as a result, do not reflect the
poverty-reducing impact of the Recovery Act’s substantial increases in
tax credits for low-income working families and food stamp benefits. A
broader poverty measure that Census will issue later this year, which
most analysts favor and which counts these benefits, will almost
certainly show a considerably smaller — although still quite substantial
— increase in poverty in 2009. In fact, the Census Bureau said today
that food stamp benefits lifted out of poverty 3.6 million people shown
as poor in the official poverty figures, while refundable tax credits
lifted from poverty 4.2 million people shown as poor in the official
data.

Poverty Likely to Climb Higher Next Year

Poverty
will likely remain very high in 2010 and climb even higher in 2011. The
Congressional Budget Office, the White House Office of Management and
Budget, and the Blue Chip consensus forecast peg the expected average
unemployment rate in 2011 at a high 9.0 to 9.3 percent. And in each of
the past three recessions, poverty did not begin to fall until a year after the unemployment rate began to fall.

Furthermore,
key forms of federal assistance — including additional weeks of
unemployment benefits for the long-term unemployed and a temporary
program that has created 250,000 mostly private-sector jobs for
low-income parents and youth — are slated to expire by the end of this
year. If Congress fails to extend these measures and unemployment
remains high, poverty and hardship almost certainly will climb still
higher next year.

Increase in the Uninsured and Its Implications

The
number and percentage of Americans without health insurance rose
sharply in 2009. The number of uninsured jumped by 4.3 million, to a
total of 50.7 million. The percentage of Americans without coverage rose
from 15.4 percent to 16.7 percent, which means one of every six
Americans was uninsured last year. These are the sharpest year-to-year
increases since the Census Bureau began collecting these data in 1987.

The
new data show a striking divergence between declines in private
insurance and expanded coverage through federally supported programs.
The number of people with private insurance plunged by 6.5 million last
year, driven by a drop in employer-based coverage; 66.7 percent of
Americans had private coverage in 2008 but only 63.9 percent did in
2009. In contrast, the percentage of people with Medicaid coverage rose
from 14.1 to 15.7 percent. Without that expansion, the increase in the
number and percentage of people who are uninsured would have been much
larger.

Data by age tell the same story. The percentages of
children and elderly people — the main groups covered by Medicaid, the
Children’s Health Insurance Program (CHIP), and Medicare — lacking
coverage did not increase. By contrast, the percentage of people aged 18-64 without insurance rose substantially.

In
short, the increase in the ranks of the uninsured would have been
substantially greater if not for Medicaid and CHIP, which covered more
people as the number of people lacking employer-based insurance swelled.
These findings underscore the relevance of the recently enacted health
reform law, which substantially expands coverage for people who cannot
obtain insurance through an employer. Had health reform been in place in
2009, the number of people without health insurance would have risen
far less.

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The Center on Budget and Policy Priorities is one of the nation’s premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.

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