NCPA - National Center for Policy Analysis


February 21, 2005

More middle-income families are relying on government programs for health insurance, even when their own private employers provide coverage, says the Wall Street Journal.

Families that can not afford private insurance but are above the income limit to quality for Medicaid are turning to state programs such as the State Children's Health Insurance Program to insure their children. However, observers say the growing demand on the program is unsustainable:

  • The Employee Benefit Research Institute notes that private coverage declined from 74.4 percent in 2000 to 71.5 percent in 2003.
  • Since 2000, nationwide enrollment of children in SCHIP programs has increased by 76 percent to about 5.8 million.
  • In Kansas, 51 percent of the children in the state's SCHIP program have at least one parent who is eligible for private coverage.
  • A recent study from Massachusetts showed that 42,864 people employed at 138 companies -- and presumably eligible for health insurance -- had dependents enrolled in the public insurance program, MassHealth, costing the state $40.8 million.
  • In Tennessee, in 2004 the state's controversial TennCare program covered 68,300 people employed at 20 companies -- presumably offering health insurance, only 5.25 percent of the program's 1.3 million enrollees; officials plan to eliminate 300,000 adults from the rolls, saving about $575 million.

Programs such as SCHIP require enrollees to pay premiums and co-pays, however, the costs are much lower; one might pay $60 per month to cover two children as opposed to paying a few hundred dollars per month through a private insurer.

However, since state programs underpay providers, private premiums will rise to cover the shortfall as more people enter the public insurance market.

Sources: Kris Maher, "Middle-Class Families Strain Public Health-Insurance Plans," Wall Street Journal, February 15, 2005; and Paul Fronstin, "Sources of Health Insurance and Characteristics of the Uninsured: Analysis of the March 2004 Current Population Survey," Employee Benefit Research Institute, December 2004.

For WSJ text (subscription required):,,SB110843595850054891,00.html

For EBRI study:


Browse more articles on Health Issues