Fewer getting insurance through jobs; 9M fewer covered in 2003 than in 2001

3 August 2004 | USA Today

by Julie Appleby

The percentage of people who get health insurance through employers fell sharply from 2001 to 2003, resulting in 9 million fewer people with employer coverage after accounting for population growth, researchers said Tuesday.

Unemployment and the rising cost of insurance were blamed for the falloff, which saw the percentage of people under 65 who get health insurance through employers go from 67% in 2001 to 63% in 2003. Employer coverage is the main way Americans get insurance.

Health insurance coverage trends:
Other private
Public insurance
Other coverage
Note: Public insurance includes state programs and Medicaid. Other coverage includes Medicare, military insurance, Indian Health Service and miscellaneous other coverage. Source: HSC Community Tracking Study

During the same years, enrollment in government health programs such as Medicaid grew, preventing a significant increase in the uninsured, according to the study by the non-partisan Center for Studying Health System Change in Washington.

Job losses caused by the sluggish economy were the main reason for the drop in people covered by employer health plans. But insurance premiums that increased 28% during the period also contributed to the decline, as some employers stopped offering coverage, while at some firms workers decided not to enroll because their share of the cost rose.

“While the economic downturn reduced employment and accounted for much of the decline in employer coverage, the rapidly rising cost of insurance … likely contributed to the decline as well,” said co-author Bradley Strunk in a written statement.

The research relied on the center’s household survey of about 25,400 families.

When they lose employer-offered insurance, some workers turn to government programs, if they meet income and other requirements. Others are left to buy coverage on their own or go without.

Another study released Monday tries to quantify the types of consumers who buy their own health insurance and how much they pay for it. The topic is under political debate, with Republicans proposing refundable tax credits as a way of helping the uninsured buy their own coverage. Some critics say such efforts would fall short of helping most uninsured afford health coverage. A tax credit proposed by President Bush would offer refundable credits of $1,000 to individuals and $3,000 to families.

The study shows that about 16.5 million people buy their own insurance, with individual prices ranging from a low of $87 a month for an 18-to-24-year-old in the South to $299 a month for a 45-to-64 year-old in the New England/Mid-Atlantic area.

Those prices were an average of the policies sold by various insurers through the online site eHealthInsurance, which teamed with the non-partisan Kaiser Family Foundation for the study. It showed that the average annual premium purchased through the site was $1,776 for individuals. For a family, the average premium was $3,324.

Those costs are sharply lower than what employers pay for health insurance, which averages $3,383 for single employees and $9,068 for families, according to a separate Kaiser study.

Researchers said the difference is likely because those who buy their own insurance pick plans with less generous benefits than those offered by employers. Individual purchasers may also be younger or healthier than those in group plans.

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