Economics Case Study on Poverty, Income and Health Insurance Coverage


Sustainable development has become an important goal for most countries globally. To achieve this, issues such as poverty, income inequality and health insurance coverage must be handled with great care. As a result, most governments struggle to reduce poverty rates and income inequality in their respective countries. Health is also considered as a very essential part of sustainable development. In a bid to ensure its citizens are healthy, the United States has been working to ensure that a maximum number of its citizens are covered under health insurances. Income, poverty and health insurance coverage are important issues that should be handled carefully for the United States to achieve sustainable development.


Over the years, the gap between the rich and the poor, known as income inequality, has been increasing. Despite of the United States has undergoing an expansionary, income inequality seems to be gradually increasing. Though the US has increased minimum wages and created employment for many causing a decrease in the number of people living below poverty line, the rich have also succeeded in accumulating more wealth (Telford, 2019). The final effect is that the number of people living below the minimum wage has decreased while the wealthy have become wealthier. As a result, the gap between them has been consistently widening. The Gini coefficient which measures the distribution of wealth has also shown an increasing rate of inequality over the years.

The data for the years 1968 and 2017 clearly shows an increase in income inequality. In the year 2017, the shares of household incomes in the lowest quintile decreased to 3.1 from rate 4.2 in 1968. This means that the number of people earning the least in the country decreased. The shares of household incomes in the second, third and fourth quintiles also decreased from 11.1, 17.6 and 24.5 in 1968 to and 23.0 respectively in 2017 meaning that the number of people in the second, third and fourth quintiles decreased. The share of household incomes in the highest quintile and that in the top 5% increased to 51.5% and 22.3% in 2017 from 42.6% and 16.3% respectively in 1968 (Fontenot et al., 2018) . This increase of people in the highest quintile overrides the decreases in the lowest, second, third and fourth quintiles. From the data, it is safe to conclude that income inequality has increased in the year 2017.


Over the years, the US has experienced a significant decrease in poverty rates. This has been as a result of various policies that have been put in place such as: creation of job opportunities, raising the minimum wages, affordable education for children, and supporting equity in pay. Looking at the data of the years 2017, 2012, 2007, 1973 and 1959, there is clearly a reduction of poverty rates from 22.4% in 1959 to 12.3% in the year 2017 ( DeNavas- Walt et al., 2013). It is important to note that rate of poverty decreased from 22.4% in the year 1959 to 11.1% in the year 1973 after which it increased to 11.3% in 2000, 12.5% in 2007, and 15.0% in 2012.In 2017, the rate of poverty decreased to 12.3% from 15.0 in 2012.

In the year 2007, the poverty rate was at 12.5% while in the year 2012, it was at 15.0%. The poverty rate increased by 2.5% meaning that the number of people living in poverty increased. This increase can be attributed to the Economic Recession that began at the end of 2007 and ended in 2009. Though the recession came to an end in 2009, its adverse effects were still felt in 2012 with a large number of people living in poverty (Vallas $ Boteach, 2014). The year 2017, had a poverty level of 12.3% meaning that less people were living in poverty as compared to the year 2012. This decrease can be attributed to the fact that the US went through an expansionary period from 2015 onwards during which more job opportunities were created and the minimum wage was increased. As a result, the number of people living in poverty decreased.

Health Insurance Coverage

Health is an important sector of any economy. The United States has gone a step further to ensure that not only does its citizens have access to affordable health services but they should also have health insurance coverages. The number of uninsured people has contracted from 41795 (13.3%) in 2013 to 28052(8.8%) in 2016 and finally slightly increased to 28543(8.8%) in 2017.The number of uninsured people aged 19-25years expanded to 4189(14.0%) in 2017 from 3906(13.1%) in 2016 while those over 65years who are uninsured expanded to 664(1.3%) in 2017 from 591(1.2%) in 2016. The number of uninsured people expanded from 31026 in 1987 to 49951 in 2010 after which it has gradually decreased to 41795 in 2013 then to 28052 in 2016.There was a slight increase from 28052 in 2016 to 28543 in 2017 (Berchick et al., 2018). The percentages have also followed a similar trend with an increase from 12.9% in 1987 to 16.2% in 2010 after which it gradually contracted to 13.3% in 2013 and then to 8.8% in 2016. There was a slight expansion in 2017.The decrease in the number of uninsured people in 2013, 2016 and 2017 can be attributed to the enactment of the Affordable Care Act (ACA) in March 2010 which made health coverages affordable (Collins et al., 2019). Similarly, the percentage of uninsured people between the ages of 18years to 25years decreased from 29.3% in 2009 to 14.0% in 2017 as a result of the enactment of ACA.

The number of people aged 65years and over without health insurance coverage is extremely low while that of people aged 18-25years is very high. This is because the people aged 65years and over have access to many health insurance coverages such as federal Medicare programs and private insurances which they secured while they were in their prime years. Those aged 18-25 years may not have access to such coverages. Some of them are unemployed and as such cannot cater for their own private coverages.


In conclusion, poverty, income and health insurance coverage are important sectors that need to be taken into serious consideration by all countries. The United States has succeeded in lowering its poverty rate but still struggles to reduce income inequality. The Health insurance coverage rate in the country is also expanding. While the country is doing well in terms of reducing poverty and ensuring as many people as possible can access health insurance coverages, the US still has a long way to go to reduce income inequality.




Berchick, E. R., Hood, E., & Bennet, J. C. (2018, September). Health Insurance Coverage in the United States:2017.

Collins, S. R., Bhupal, H. K., & Doty, M. M. (2019, February 7). Health insurance coverage eight years after the ACA. Commonwealth Fund.

DeNavas-Walt, C., Proctor, B. D., & Smith, J. C. (2013, September). Income, Poverty, and Health Insurance Coverage in the United States:2012.

Fontenot, K., Semega, J., & Kollar, M. (2018, September). Income and Poverty in the United States:2017.

Telford, T. (2019, September 26). Income inequality in America is the highest it’s been since Census Bureau started tracking it, data shows. The Washington Post.

Vallas, R., & Boteach, M. (2014, September 17). The top 10 solutions to cut poverty and grow the middle class. Center for American Progress.