It’s time for a reality check: According to the latest U.S. Census Bureau survey, the number of uninsured Americans rose from 16.1% to 16.3 % of the population in 2010, representing 49.9 million people who have no health coverage. Many of these folks lost their jobs as a result of the persistent weak economy and along with those jobs went employer-provided health benefits.

To make matters worse, as the economy shows no sign of recovering anytime soon, two key federal stimulus programs—one that subsidized COBRA benefits for laid-off workers and another that temporarily increased the federal matching rate for Medicaid—have ended in recent months.

The new Census survey finds that the percentage of people covered by employment-based health insurance decreased to 55.3 percent in 2010 from 56.1 percent in 2009. Meanwhile, the percentage of Americans covered by private insurance has been decreasing each year since 2001, with little accompanying rise in the number of adults covered by Medicaid.

The options for coverage have decreased further—even for those families or individuals who try to purchase private insurance. Earlier this year, a Government Accountability Office study of 459 insurers found that an average 19% of applicants nationally were denied health care coverage when they applied for plans.

The study, conducted using newly available data from the Department of Health and Human Services, showed a wide range of insurance application denial rates. According to the GAO report, “just over a quarter of insurers had application denial rates from 0 percent to 15 percent while another quarter of insurers had rates of 40 percent or higher.” The data provided little detail about what led to the denials, but medical underwriting—the practice of reviewing an applicant’s health status—is still used by insurers to reject patients with pre-existing conditions. In 2014 the private insurance industry will gain tens of millions of new customers as federal health insurance subsidies kick in and medical underwriting will be prohibited. But no one expects insurers to stop doing everything they can in the next two years to increase profits—including denying families and individuals they consider too high risk to cover.

A case in point; a House Energy and Commerce Committee investigation of four large for-profit insurers (Aetna, Humana, UnitedHealthcare and WellPoint) last year found that the denial rates have steadily increased from 11.9% in 2007 to 15.3% in 2009.

What does this tell us? A growing portion of the uninsured isn’t being covered under Medicaid and either can’t afford to buy private insurance or is turned down by insurers when they apply for coverage. Stuck in this netherworld of the uninsured, they aren’t able to benefit from reforms in the Affordable Care Act that are still at least two years away. The result is that they must delay medical care, show up at emergency rooms or face medical bankruptcy when faced with a serious health problem or accident.

The problem is only going to get worse. Unemployment shows no sign of abating and those out of work have been that way for longer and longer periods of time. A new survey from the John J. Heldrich Center for Workforce Development at Rutgers University found that three-quarters of the currently unemployed have been out of work for more than six months; half have been out of work for more than two years.

The government recognized that a void needed to be filled in terms of health insurance for workers who were laid off in response to the failing economy. As part of the American Recovery and Reinvestment Act of 2009, people who lost their jobs paid only 35 percent of their COBRA health insurance premiums, allowing unemployed workers to retain subsidized health insurance coverage for up to 18 months. But that subsidy expired May 31, 2010, meaning that by the end of last month, anyone still eligible for COBRA now has to pay the full premium—averaging more than $1,000 a month (or in some areas, quite a bit more) for most families.

According to Cheryl Fish-Parcham, deputy director of health policies at Families USA, many families will not be able to afford this. "It will leave a lot of people uninsured," she said, adding that under COBRA "people pay the share their employer had paid as well as their own share, which eats up most of an unemployment check."

Medicaid has not taken up the slack—at least in terms of adults. As a recent piece in Kaiser Health News puts it; “States face a twofold problem when economic recession hits: the demand for Medicaid services goes up, as people lose job-based health insurance; and states' ability to match federal funds to support those services goes down because their revenues decline.” As part of the stimulus package in 2009, the federal government increased their “match rate” for state Medicaid programs; kicking in about 62 percent of total costs for wealthier, less hard-hit states, to about 85 percent in states facing greater burdens. This enhanced match rate expired in Dec. 2010 but was extended by Congress to a lesser degree in terms of federal contributions, until June 2011. Now states are again struggling to handle their growing Medicaid rolls.

Meanwhile, the need for federal intervention remains strong. The Census report makes it clear that the ranks of unemployed Americans and uninsured Americans continues to increase with no sign of recovery. Add to that the sobering findings that more people (46.2 million) live in poverty than at any other time since the bureau began collected data 52 years ago. In terms of health care, this is a terrible time to abandon the unemployed and the growing portion of families who have descended into poverty.

The right thing to do is to reinstate COBRA subsidies, at least until 2014 when the health insurance exchanges are up and running and can give families an affordable coverage option. It is also a terrible time for the government to consider cutting back on federal contributions to Medicaid or to grant states waivers that allow them to stop maintaining adequate benefits in their health care programs for the poor. The long-term fiscal health of our country is deeply important. But the new Census survey highlights a present-day crisis in unemployment, poverty and access to health care that requires immediate intervention; symbolic belt-tightening will do nothing to change this alarming reality.