Fewer Americans Getting Health Insurance Via Work

by Lesley Politi on October 20, 2008

Fewer Americans Getting Health Insurance Via Work
Forbes staff 10.17.08, 3:30 PM ET




Fewer American workers are getting health insurance through their jobs, either their own or that of a family member. A new study by Elise Gould, an economist with the Economic Policy Institute, finds that more than 3 million fewer Americans under 65 had employer-sponsored health insurance in 2007 than in 2000.

Over that time, the number of uninsured workers has grown by 4.1 million. Barely three Americans in five under 65 now get health insurance via their work.

Employment-based coverage is the main form of health insurance in the U.S., but the declining numbers reflect a general shift from private to public coverage. “Workers and their families have become uninsured at alarming rates,” says Gould.

The national figures mask a wide divergence of coverage among states. New Hampshire (75.4%), Hawaii (72.5%) and Connecticut (72.3%) are the states with the highest employer-provided coverage rates for those under 65. The lowest coverage rates were found in New Mexico (50.7%), Texas (53.5%) and Mississippi (53.7%).

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The overwhelming majority of states–41–experienced significant declines in coverage, Gould says. South Carolina, Missouri, North Carolina and Maryland showed the largest declines, all of more than 7%. No state saw an increase in coverage, she adds.

The decline has been a steady one, with the coverage rates dropping each successive year in the seven in the study. Least educated, lowest wage workers suffered the greatest erosion of coverage. Employees with a post-graduate degree are nine times more likely to have health insurance from their employer than those with less than a high school education.

Manufacturing jobs are a better bet for finding health insurance than services, but that coverage is declining along with the number of manufacturing jobs. Education and health and social services are seeing an increase in the share of jobs that come with insurance. Three in five private-sector jobs in those services provided it.

Employees of small firms (less than 25 employees) are twice as less likely to have coverage than those working for larger outfits. Only one in three small firm workers is covered.

Businesses have struggled to deal with the rising cost of health insurance. The average annual premium costs for employer-sponsored health plans were up 5% this year over last year and now stand at $4,704 a year for one employee and $12,680 a year for family coverage, according to a recent Kaiser Family Foundation study. Employers are still picking up most of the premiums, but passing along more out-of-pocket medical costs to their insured workers in the forms of higher co-payments and deductibles.

The Kaiser report says two in five of the companies it asked said they planned to shift more of the cost to their employees next year, and one in 15 said they planned to drop coverage entirely.

Among workers insured through their own or a spouse’s job, the largest declines in coverage, according to Gould’s study, occurred in South Carolina (7.6%) and Colorado (7.2%). The state with the highest ratio of employer-sponsored coverage among workers was Hawaii, which mandates employer health insurance for those who work at least 20 hours per week. Hawaii had a coverage rate in 2006-07 of 80.6%, compared to the national average of 70.9%.

The loss of employer-sponsored health coverage has also hit children hard. In Mississippi, New Mexico, Texas, Arkansas and Louisiana, less than half of the state’s children now have health insurance. The highest rates of coverage were in New Hampshire (76.7%), Minnesota (71.4%), Connecticut (71.4%) and Massachusetts (71%).

More than 3 million fewer children had employment-based coverage in 2007 than in 2000, with the decline cutting across all ethnic and income groups, Gould says. Public safety net programs like Medicaid and the State Children’s Health Insurance Program–have had to pick up the slack.

Source: Forbes.com

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