offset by an increase of almost 8 percent in Medicaid coverage between 1989 and 1993 (see Table 2.1 and especially Figure 2.1).

There are a variety of interpretations and substantial disagreement, however, about the relationship between the decrease in employer-based coverage and the increase in Medicaid coverage. At the heart of the issue is the concern that employers and employees might drop private health insurance to take advantage of increasing Medicaid eligibility thresholds to higher levels of income. Others maintain that shifting employment patterns, including the large scale shift from manufacturing to service sector jobs, account for the decline in employer coverage. Thus, the issue of replacement or substitution of coverage, or "crowding out," is controversial. This issue is discussed later in this chapter.

Trends in Coverage for Adults

Employer-based coverage decreased for adults as well as for children over the period from 1987 to 1995. However, the rate of decrease was faster for children, particularly in the 1990s (see Tables 2.1 and 2.2 and Figures 2.2 and 2.3).

During the same period that private coverage for adults was decreasing, the percentage of uninsured adults was increasing (Figure 2.3) and the percentage of adults with Medicaid was about the same. This suggests that adults who lose employer-based coverage are more likely to become uninsured than to enroll in Medicaid (Figure 2.3).

Demographics Of Coverage For Children


As indicated in Figures 2.4 and 2.5, the age distributions for children with employer-based coverage and uninsured children are similar. However, among children with Medicaid coverage, a disproportionate number (approximately 80 percent) are in the younger age groups (43.6 percent ages 0 to 5, 36.8 percent ages 6-12). This is true, in part, because families with young children are more likely to be poor and eligible for Medicaid compared with families with older children.

In addition, the Medicaid expansions enacted in the late 1980s are being phased in by age, with younger children gaining coverage before older children. Some policy analysts and health services researchers interpret the larger number of Medicaid-insured younger children as evidence that the Medicaid expansions have effectively reached the intended age group.

Race and Ethnicity

As indicated in Figures 2.6 and 2.7, the patterns of children's health insurance coverage among children by race and ethnicity are not uniform. In general, children of color are disproportionately more likely to be uninsured. These figures present national aggregated data; state and regional differences in distribution may be significantly different.

Most children with employer-based coverage (76 percent) are white; and most white children (69 percent) have employer-based coverage.

Among black children, fewer than 40 percent have employer-based coverage, close to half (45 percent) have Medicaid coverage, and about one in six (15 percent) have no insurance.

More than one in four Hispanic children (27 percent) are uninsured, whereas 35 percent have private insurance and about 37 percent have Medicaid coverage.

Among Native Americans, about one third (33 percent) have employer-based coverage, almost half (45 percent) have Medicaid, and approximately 11 percent are eligible to use the Indian Health Service.

On a national basis, Asian-American children make up approximately 4 percent of the total in each

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