Perspectives on Health Insurance-
(Thank you to Aaron, Click Here to Read His Story)

The Chronic Problem of Declining Health Coverage-
Employer-provided health insurance falls for third consecutive year

By Elise Gould
Source

The costs to working families of the recession and jobless recovery have been amply documented in terms of jobs, wages, and incomes (Mishel et al. 2004). Yet the persistently weak labor market in tandem with sharply increasing health costs have led to a related problem for working families: the loss of employer-provided health coverage. This report examines the erosion of employer-based coverage since 2000, with an emphasis on the characteristics—gender, race, education, and wage and income levels—of those who have lost coverage.

Although unemployment has increased and the labor market has shrunk over this period, the loss of jobs cannot explain all of the decline in employer health care coverage. Jobholders also experienced a drop in coverage from 58.9% to 56.4%, a change of 2.5 percentage points. This decline may be the result of a couple of trends: the slack in the labor market that has weakened workers' bargaining power or steep increases in health care costs that are being passed to employers and employees in the form of higher premiums and lower take-up rates.

But regardless of the causes, an examination of the recent data clearly reveals a widespread loss of coverage. Predictably, those with the least education or income lost ground, but so did those with college degrees and higher incomes. Children were particularly likely to lose employer-based coverage, although many of those from poorer families have been picked up by publicly provided insurance.

In essence, the direction of health care policy is being determined by employers, who are shifting the cost of health coverage for the least-advantaged children to the public sector. While such a shift in the source of coverage for these children may be desirable in that it ensures they have reliable, ongoing care that is less sensitive to fluctuating market forces, it also exposes them to the ups and downs of federal and state fiscal policy.

While the most recent data on employer-provided health coverage goes through 2003, data on employment trends and health costs through 2004 suggest that these negative trends persist in the current job market.

The central findings regarding the loss of employer-provided coverage are:

• The number of uninsured Americans rose by 1.4 million, from 43.6 million in 2002 to 45.0 million in 2003, and over five million people on net became uninsured between 2000 and 2003. This increase was due primarily to the precipitous decline in employer-provided health coverage for workers and their dependents.

• A significant part of this drop in employer health care coverage was due to the loss of jobs over the 2001 recession and jobless recovery. This drop is reflected in 3.8 million fewer Americans with employer-provided health coverage, or a decline from 63.6% to 60.4% of the U.S. population with employer-provided health coverage.

• While many Americans lost coverage because they or a family member lost their job, jobholders also experienced a significant decline in coverage. Between 2000 and 2003, 3.4 million fewer employed workers had health coverage from their own employer.

• Those workers in the b