Employer Health Coverage in U.S. on 10-Year Decline
The share of Americans who get health benefits through work dropped to 60 percent in 2011, continuing a decade-long slide that highlights the challenges facing President Barack Obama’s insurance overhaul.
U.S. employers provided coverage for 159 million people in 2011, 12 million fewer than in 2000, according to a study released today by the Robert Wood Johnson Foundation. The report blamed the decline on the total number of jobs available as well as insurance premiums that have more than doubled in some cases.
“Everyone’s costs have increased dramatically,” Risa Lavizzo-Mourey, president of the Princeton, New Jersey-based foundation, said in a statement. “Higher costs naturally translate into fewer employers offering insurance coverage, and fewer employees accepting it, even when it is offered.”
Obama’s Affordable Care Act, passed in 2010, is expected to boost coverage in the U.S. by 27 million people this decade, according to congressional projections, even as employer-sponsored insurance continues to shrink. The law penalizes businesses that don’t offer affordable insurance and offers subsidies for small employers. It also imposes taxes and regulations that may increase the cost for some.
So far, the legislation’s main effect has been to increase coverage for young adults, said Julie Sonier, a University of Minnesota researcher who helped prepare the report. The act allows children to stay on a parents’ health plan to age 26.
Beyond that, it’s too early to measure the law’s impact on employers, Sonier said in a phone interview from Minneapolis. Most of its major provisions don’t take effect until next year, she said, including a mandate that all Americans obtain coverage or pay a penalty.
Nationally, the share of private-sector employers offering coverage fell to about 52 percent in 2011 from 59 percent in 2000, according to the study. Insurance costs increased during the time period, with the average premium for a single employee doubling to $5,081. The average family premium rose 125 percent to $14,447, the report found.
Employee take-up of benefits dropped over the study period as well, to 76 percent from 82 percent, researchers said.
Insurance rates varied widely from state to state, according to the report. Michigan, Indiana and South Carolina saw the steepest declines in employer-backed coverage, at about 15 percentage points each. Alaska, Massachusetts and North Dakota were the only states with stable rates, the report found. No state saw an increase.
The report is based on data from the U.S. Census and other surveys and sponsored by the foundation, a research and advocacy group that promotes health coverage.
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