For Middle Class, Health Insurance Becomes a Luxury

The majority of the uninsured are neither poor by official standards nor unemployed.

Paying for health insurance is becoming a middle-class problem, and not just here. "After paying for health insurance, you take home less than minimum wage," says a poster in New York City subways sponsored by Working Today, a nonprofit agency that offers health insurance to independent contractors in New York. "Welcome to middle-class poverty." In Southern California, 70,000 supermarket workers have been on strike for five weeks over plans to cut their health benefits.

The insurance crisis is especially visible in Texas, which has the highest proportion of uninsured in the country — almost one in every four residents. The state has a large population of immigrants; its labor market is dominated by low-wage service sector jobs, and it has a higher than average number of small businesses, which are less likely to provide health benefits because they pay higher insurance costs than large companies.

State cuts to subsidies for health insurance to help close a $10 billion budget gap will cost the state $500 million in federal matching money and are expected to further spur the rise in uninsured. In September, for example, more than half a million children enrolled in a state- and federal-subsidized insurance program lost dental, vision and most mental care coverage, and some 169,000 children will lose all insurance by 2005.

Ms. Pardo, a 29-year-old from Houston, said that having no insurance meant choosing between buying an inhaler for her 9-year-old asthmatic daughter or buying her a birthday present. The girl, Morgan, lost her state-subsidized insurance last month, and now her mother must pay $80 instead of $5 for the inhaler.

Rent, car payments and insurance, day care and utilities cost Ms. Pardo more than $1,200 a month, leaving less than $200 for food, gas and other expenses. So even though her employer, the Harris County government, provides her with low-cost insurance, she cannot afford the $275 a month she would have to pay to add her daughter to her plan.