The continued decline in the share of Americans with health insurance coverage places additional stress on our health care financing system. Sometimes those without health insurance get no or get substandard treatment. Sometimes those without health insurance get adequate or excellent-quality catastrophic treatment--but the treatment is paid for by somebody else. Such cost-shifting further increases the cost of insurance, and reduces coverage. The fear is that at some point large chunks of the financing system will enter an adverse-selection death-spiral as each wave of price increases generates a large reduction in the pool of those paying for insurance and a further wave of price increases. And the derangement of the health-care financing system leads to a significant deterioriation in the quality of care provided.

But, fortunately, we aren't there yet.

However, we are getting closer. Here David Cutler tracks the decline in health insurance coverage in the 1990s.

Employee Costs and the Decline in Health Insurance Coverage

David M. Cutler
NBER Working Paper No.w9036
Issued in July 2002
---- Abstract -----

This paper examines why health insurance coverage fell despite the lengthy economic boom of the 1990s. I show that insurance coverage declined primarily because fewer workers took up coverage when offered it, not because fewer workers were offered insurance or were eligible for it. The reduction in take-up is associated with the increase in employee costs for health insurance. Estimates suggest that increased costs to employees can explain the entire decline in take-up rates in the 1990s.