Poverty rate drops, but record number don't have insurance

WASHINGTON — The nation's poverty rate declined for the first time this decade, but the number of Americans without health insurance rose to a record high of 47 million in 2006, according to new Census Bureau figures.

The statistics offered a mixed picture of the economy. While median household income rose for the second consecutive year in 2006, the increase appeared to be driven by a jump in the number of people in each household taking on full-time jobs rather than a rise in wages.

The addition of 2.2 million people to the roster of the uninsured was attributed largely to continuing declines in employer-sponsored insurance coverage.

The income group with the most people losing insurance was households making $75,000 or more a year, showing that the issue is not limited to the poor.

The figures are expected to add urgency to the debate between Congress and the White House over the future of the State Children's Health Insurance Program (SCHIP), which helps insure children whose families earned too much to qualify for Medicaid but not enough to afford insurance on their own.

The numbers also will likely increase the jockeying among presidential candidates to separate themselves from the pack on how they would tackle health care, the issue many polls show is the top domestic concern of Americans.

In all, 15.8 percent of Americans lacked coverage last year, up from 15.3 percent in 2005, according to new figures from the Current Population Survey. That tied 1998 as the year with the highest percentage of uninsured people during the past 20 years.

Children didn't fare well. Last year, 11.7 percent of those younger than 18 lacked health insurance, up from 10.9 percent in 2005. The percentage of uninsured children has increased two years in a row, according to the census data.

The poverty rate fell from 12.6 percent in 2005 to 12.3 percent in 2006, reducing the number of the officially poor by nearly a half-million people, to 36.5 million.

The poverty level is the official measure used to decide eligibility for federal health, housing, nutrition and child-care benefits. It differs by family size and makeup. For a family of four with two children, the poverty level last year was $20,444.

The poverty rate — the percentage of people living below poverty — helps shape the debate on the health of the nation's economy.

The report said that "real," or inflation-adjusted, median household income increased by 0.7 percent to $48,200 in 2006, though Census officials said it has yet to reach the inflation-adjusted peak of $49,200 recorded in 1999, when the economy was booming. Median income is the point at which half make more and half make less.

The inflation-adjusted median earnings of full-time men and women declined in 2006 for the second straight year. Household income rose because there were more full-time workers per household, suggesting more people were working longer hours to make ends meet.

Douglas Besharov, a resident scholar at the conservative American Enterprise Institute, said there was a lot of good news in the numbers.

"We're looking at a situation where unemployment was down, and it was down for single mothers, who make up a substantial portion of the people in poverty," Besharov said. "We need a good economy. That's not all we need, but we should not complain when it helps lower poverty."

Jared Bernstein, a senior economist with the liberal Economic Policy Institute in Washington, said, "As John Kennedy pointed out, 'A rising tide raises all boats.' What the Census numbers reveal is that while most boats got a little lift last year, the big gains of the recovery have accrued to the yachts."

President Bush portrayed the numbers as a vindication of his economic policies of low taxes and minimal regulation.

"The census data show that income gains in 2006 were substantial and widespread across all income categories," the president said in a statement. "And the largest-percentage income gains occurred for people in the bottom 20 percent of incomes."

Some analysts said Bush failed to note that, in dollar terms, the gains near the top were 10 times those in the bottom 20 percent, and for most Americans, improvement was not the result of raises but more work.

The last significant decline in the poverty rate came in 2000, during the Clinton administration, when it went from 11.9 percent to 11.3 percent.

The poverty rate increased every year for the next four years, peaking at 12.7 percent in 2004. It was 12.6 percent in 2005, but Census officials said that change was statistically insignificant.

Among the Census report's other findings:

• Maryland led the country with a median household income of $65,144. It was followed by New Jersey, Connecticut, Hawaii and Massachusetts.

• Mississippi had the lowest median income, at $34,473.

• Mississippi had the highest poverty rate, at 21.1 percent.

• Maryland had the lowest poverty rate, at 7.8 percent.

Material from The Associated Press, the Chicago Tribune and Los Angeles Times is included in this report.