Household Incomes Up; Health Insurance Down The U.S. poverty rate declined last year and median household incomes edged up, the Census Bureau reported Tuesday. But more people found themselves without health insurance.
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Household Incomes Up; Health Insurance Down

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Household Incomes Up; Health Insurance Down

Household Incomes Up; Health Insurance Down

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The nation's health care crisis deepened last year as the number of uninsured jumped by more than two million. That sobering figure came in a government report that also showed signs of economic progress. Median household income rose for the second year in a row. And for the first time in years, there was a significant decline in the percentage of Americans living in poverty.

NPR's Frank Langfitt reports on today's numbers from the Census Bureau.

FRANK LANGFITT: Last year, the number of uninsured people in America hit 47 million. That's a record. It's also nearly 16 percent of the population.

Len Nichols is a health care economist with The New America Foundation, a Washington think-tank. He says health care costs grew at 8 percent last year and fewer people and companies could afford it.

Mr. LEN NICHOLS (Health Care Economist, The New America Foundation): Well, I think employers cut back across the board. They're reducing the generosity of both their premiums as well as the benefit packages themselves. And in some cases, they're declining to offer health insurance. And in many more cases, even workers are declining the offers they do have because they think it's increasingly unaffordable.

LANGFITT: Nichols says what's especially worrisome is that more people are going without health insurance at a time when the economy has been pretty healthy. Despite the recent tumult on Wall Street, job growth has been steady, wages are rising, and unemployment is very low.

Mr. NICHOLS: It is precisely that contradiction between the overall strength of the economy and the increase in the number of uninsured that makes it clear there's something wrong with our health care system. The sense of urgency should be overwhelming. And I believe it is building.

LANGFITT: The numbers released today by the Census Bureau were not all bad. The poverty rate notched down to 12.3 percent. And after years in which many struggled to make more money, median household income went up. It grew by 0.7 percent to about $48,200. More good news, no doubt. But there's a wrinkle. Even as household income rose, individual earnings actually went down. That's right. Households made more but individual people made less. That suggests more people were working or working more.

Nigel Gault, U.S. economist for the financial analysis firm Global Insight, explains.

Mr. NIGEL GAULT (Economist, Global Insight): For a particular household, in order to stay where you were or in order to get ahead, you may be needed to, you know, have a second person go out to work or perhaps have a person start working part time. So I think people were feeling the pressure of prices outpacing their earnings growth.

LANGFITT: Tim Smeeding teaches economics at Syracuse University. He describes the household income increase like this.

Professor TIM SMEEDING (Economics, Syracuse University): The gains that we've seen were mainly from people working harder, not at people being paid a lot more.

LANGFITT: That said, several groups saw big income gains. They include people over the age of 65. Immigrants who aren't citizens also did well. Last year, their income went up about 4 percent. Smeeding says that's a sign that some foreign workers are getting ahead.

Prof. SMEEDING: That was a really big increase. Most of our immigrants who aren't citizens are young, healthy people who come here to work.

LANGFITT: Despite those gains, household income still is not back to the levels before the last downturn. And that worries Smeeding because people will have less of a cushion if the economy heads south.

Prof. SMEEDING: We all know that if we hit a recession, if unemployment goes up, if our housing recession and our credit crunch turns into something that lays a lot of people off, then we know it's going to get worse.

LANGFITT: So was last year a good one for most Americans? Well, if you were able to work more and hold on to your health insurance, 2006 was probably pretty good. But if you couldn't keep up with rising insurance costs or find more hours, it probably wasn't.

Frank Langfitt, NPR News, Washington.

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