Employer-Sponsored Health Insurance Coverage Declines For 11th Straight Year

Filed under: News,The Economy |

Fewer American than ever have employers-sponsored health insurance.

Fewer American than ever have employer-sponsored health insurance

Fewer American than ever have employer-sponsored health insurance.

Fewer Americans than ever get health insurance through their employersIn 2011, the number of Americans under age 65 covered by employer-sponsored health insurance (ESI) declined for the eleventh year in a row, finds a new Economic Policy Institute (EPI) report.

In a new study, Employer-sponsored health insurance coverage continues to decline in a new decade, Elise Gould, EPI’s director of health policy research, explains that the share of Americans under 65 covered by employment-based health insurance fell from 58.6% in 2010 to 58.3% in 2011.

“Employer-sponsored health insurance is increasingly failing American families, causing far too many people to fall through the cracks,” Gould said. “While provisions in the Patient Protection and Affordable Care Act have helped mitigate the trend and will help more individuals and families in the future, the labor market’s insufficient job creation and workers’ ever-decreasing bargaining power will likely lead to further losses in employer-sponsored insurance coverage before major relief from health reform materializes.”

Share of the under-65 population with employer-sponsored health insurance, 2000–2011

Share of the under-65 population with employer-sponsored health insurance, 2000–2011. Note: Shaded areas denote recessions.

However, public health insurance coverage and key components of the Patient Protection and Affordable Care Act that took effect in 2010 shielded many Americans, primarily children and young adults, from becoming uninsured.

Because most Americans, particularly those under age 65, rely on health insurance offered through their employers, the fall in employer-sponsored health insurance is expected during bad economic times.

Long Decline For Employer-Sponsored Health Insurance

However, the fall in employer-sponsored health insurance started long before the Great Recession.

As many as 29 million more Americans under age 65 would have had employer-sponsored health insurance in 2011 if the coverage rate had remained at the 2000 level when 69.2% of workers had employer-sponsored health care.

Workers age 19 to 64 were nearly 30% more likely to be uninsured in 2011 than in 2000, according to the report.

Public health insurance, primarily in the form of Medicaid and CHIP, kept millions of people from becoming uninsured, according to the report.

Public health insurance covered 25 million more people under age 65 in 2011 than it did in 2000.

In fact, although children saw larger declines in mployer-sponsored health insurance than adults during the 2000s, they experienced an increase in total coverage rates due to public insurance, as the share of children with public coverage grew 14.6 percentage points from 2000 to 2011.

Through provisions in the Patient Protection and Affordable Care Act (also known as health care reform) that took effect in 2010, young adults up to age 26 were able to have health insurance coverage through their parents’ policies.

While this provision appears to have improved the low health insurance coverage rates for 19- to 25-year-olds, coverage for young adults dependent on parental coverage, which has suffered in recent years due to the struggling economy.

Young adults whose parents do not have the advantage of ESI (disproportionately non-whites and/or those with less education and/or lower incomes) are not able to take advantage of this provision.

New Hampshire had the highest rate of employer-sponsored health insurance coverage among the under-65 population, at 72.0% in 2010/11. The next highest ESI rates were found in Massachusetts at 70.5%, Connecticut with 69.8%, Minnesota, 68.7%, Utah, 68.6% and Maryland at 67.4%.

The nation’s lowest ESI rates were found in New Mexico and Louisiana. Less than half New Mexico’s and Louisiana’s non-elderly population have ESI at 47.6% and 49.7%.

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