Number of Households Living Below Poverty Line Stops Growing, While Number of People with Health Insurance Plummets

August 31, 2006 – A new survey released by the Census Bureau showed that the number of American households living below the poverty line stopped growing for the first time since George W. Bush took office. The Bush administration quickly stepped forward to say that the survey clearly shows that its economic policies are working. But critics of the administration were just as quick to point out that other economic indicators don’t paint a very rosy picture for either poor or middle-class American families.

 

The survey shows that 12.6%, or about 37 million Americans lived below the poverty line in 2005. This is approximately the same percentage of people living in poverty in 2004. Within these numbers, nearly 1 out of every 6 children lives in poverty.

 

Overall, median household income increased by a meager 1.1% in the same time period, to $46,326. Again, this is the first time since the President took office that household income has increased.

 

With elections looming in November, politicians in both parties were quick to try to spin the numbers in their favor. Many Republicans said that the numbers clearly showed that current economic policies were having a positive impact on the economy. But Democrats point out that for those living in poverty, income growth for 2005 average only $17.

 

But both political parties tried to steer clear of the survey’s results regarding health insurance. According to those results, roughly 900,000 fewer people were covered in 2005 than were covered in 2004. The number of people without any health coverage increased to an all time high of 46.6 million.

 

Diane Rowland said, "the most disturbing thing" is that the number of children without health coverage increased for the first time in years.” Rowland is the director of the Kaiser Commission on Medicaid and the Uninsured.

 

The key reason for the increase in number of people without insurance is cost. Many employers are finding it too expensive to offer insurance any more. Their choices are to increase the amount that employees are forced to pay if they want coverage or to drop their policies entirely. Employees of some companies have found that it is actually less expensive to purchase individual policies rather than pay for their share of insurance offered by their employers.

 

The health insurance issue is extremely important for families that want to remain financially sound. The two largest causes for bankruptcies in the United States are job loss and unanticipated major medical bills. In order to address this looming crisis, several states have passed health insurance reform acts. Some of these require citizens to purchase individual policies or face tax consequences. Others allow the state to provide inexpensive insurance to those who can’t get coverage from other sources.

 

It is clear that Congress needs to deal with the issue of health insurance affordability in the near future. If that does not happen, more and more families will be faced with financial crises or their own.

 

Technorati Tags : credit, health+insurance, bankruptcy, poverty, economic