The percentage of Montanans without health insurance dropped in 2007, moving the state out of the bottom 10 of states with the fewest level of those insured, according to recent U.S. Census figures released.

Health-policy analysts and a spokeswoman for the state's largest private insurer agreed that the improvement is the result of a relatively strong state economy and expanded public programs, like the Children's Health Insurance Plan (CHIP).

Yet, while they hailed the change as good news, they also agreed that many Montanans with health insurance are paying more for less coverage or are "underinsured," meaning they have policies that require large out-of-pocket expenses before coverage kicks in.

"What we've seen nationally (and in Montana) is that people are finding health insurance less affordable on the job," said Steve Seninger, director of economic research at the University of Montana's Bureau of Business and Economic Research. "You add all that up -- higher premiums, the underinsured, reduced benefits -- and it adds up to less effective health insurance coverage."

The Census Bureau said last week that 16.1 percent of Montanans were without health insurance in 2007, or about 154,000 people. That's compared with 17.1 percent in 2006 and 18.7 percent in 2005 -- about 175,000 people in the latter year.

With the change, Montana moved from 44th in 2005 to 34th among the states last year, for the percentage of people with health insurance.

"It's not to understate that there aren't still huge problems, but it's a little bit of good news," said David Kendell of Missoula, a senior fellow for health policy with the Progressive Policy Institute. "It's better to have (health) insurance than to not have insurance."

Nationally, the number of people without health insurance dropped from about 47 million in 2006 to 45.7 million in 2007, according to the Census Bureau. That's 15.3 percent of the population.

The state with the highest level of uninsured is Texas, at nearly 25 percent. The state with the lowest is Massachusetts, at about 8 percent.

Linda McGillen, spokeswoman for Blue Cross Blue Shield of Montana, the state's largest private health insurer, said the company is "thrilled" to see the number of uninsured people dropping in Montana.

McGillen echoed the comments of others in saying the reduction is partly because of programs like CHIP and Insure Montana, which is using state money to subsidize health insurance purchased by small businesses for their employees.

"We'd like to emphasize the fact that it's going to take a public-private partnership to really bring those numbers down, and it's going to take some consumer education (on preventative care and health)," she added.

The numbers indicate that about 40 percent of the 20,000 Montanans who gained health insurance since 2005 obtained it through publicly funded programs, while the remainder bought it without public assistance.

Blue Cross is among the health insurers supporting the ballot measure Initiative 155, which would greatly expand the eligibility of CHIP. Supporters of I-155 say it would cover an additional 30,000 children who aren't currently insured. Montana voters will decide the issue in November.

The Legislature voted in 2007 to expand CHIP eligibility. Since then, about 3,700 kids have been added to the program.

Insure Montana, funded by increased tobacco taxes that were approved by voters in 2004, began its subsidy program in late 2005. The subsidies have helped pay for insurance at 750 companies covering about 4,000 people. Another 440 companies are on a waiting list for the program.

State Insurance Commissioner John Morrison has proposed expanded funding for the program next year. He said Tuesday that his office also has asked the federal government to approve using Medicaid money to help expand the program.

"It's encouraging to know that some of the things we've been doing seem to making a difference," he said. "But the uninsured rate is still unacceptable."