ISO an affordable backup to employer-based health coverage
We know that most people get their health insurance coverage through their jobs or through a family member’s employer. But a report just released by the nonpartisan Employee Benefit Research Institute found that the percentage of the population with employment-based health benefits has been declining, most recently because of the recession.
Paul Fronstin, author of the report and director of the institute’s Health Research and Education Program, said his research found that fewer employers are offering health coverage, fewer workers are eligible for it and fewer employees are taking advantage of the benefit because it’s too costly.
“What we are seeing is this steady and slow erosion in employment-based coverage,” Fronstin said. “We’ve been seeing changes for the better part of a decade.”
Consider these findings:
●Between 1997 and 2010, the percentage of workers offered health insurance by their employers decreased from 70.1 percent to 67.5 percent, and the percentage of workers covered by those plans decreased from 60.3 percent to 56.5 percent.
●Many people aren’t qualifying for health coverage because they work part time. Two-thirds of workers not eligible for their employers’ health plans reported that they worked part time in 2010, up from half of workers in 1997.
●Between 1997 and 2010, the percentage of workers who declined coverage because they said it was too expensive increased from 23.2 percent to 29.1 percent.
And workers whose employers do not offer health benefits are more likely to go without any insurance. In 2010, half of all workers whose employer did not offer health benefits were uninsured, up from 44.1 percent in 1997.
“While it is possible that these trends will change with a rebound in employment rates, even when the unemployment rate fell between 2002 and 2005, it did not appear to have an impact on employer sponsorship of health plans,” Fronstin wrote.
He said that estimates presented in his report could serve as a base line to measure the future impact of the 2010 Patient Protection and Affordable Care Act on employment-based health benefits. Given all the misinformation and criticism about the health-care law, we certainly need a nonpartisan base line.
For now, without anything else on the table, President Obama’s Affordable Care Act is the backup to employer-provided health-care coverage. But that backup depends on a lot of assumptions.
For example, we are still waiting to see whether the Supreme Court will strike down key parts of the act, in particular the individual mandate that requires most people to purchase a minimum level of health insurance coverage for themselves and their dependents after the law is fully implemented in 2014. The court is expected to rule in June.
In another report, released last month, Fronstin noted that the health-care law will require employers with 50 or more full-time workers who do not provide health coverage to pay a penalty. But because of the law, “there is concern that employers may respond by cutting back on health coverage for part-time workers or by increasing the proportion of part-time workers employed,” he said.
In a report released this month, the Commonwealth Fund found that one-quarter of adults ages 19 to 64 experienced a gap in their health insurance in 2011, with a majority having been uninsured for a year or longer. Among those who had employer-sponsored insurance before their gap in coverage, two-thirds cited a loss or change of a job as the primary reason they were uninsured.
The Commonwealth Fund said that between 2008 and 2010, more than half of adults — or about 9 million people — who lost a job with health benefits became uninsured. Few affordable insurance options exist for adults outside of an employer-based benefit.
But beginning in 2014, subsidized private health insurance offered through new state insurance exchanges will allow adults and their families to remain insured even in the face of job changes and other life disruptions, the organization said.
Can we afford to shift from employers being the primary provider of health benefits?
Probably not, but we have to acknowledge that at any given time, high unemployment can and does put many people’s employer-sponsored health coverage at risk, the Kaiser Family Foundation points out.
Taken together, these recent reports provide a truth we can’t ignore. There has to be a viable, affordable backup to employer-based health coverage.
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