Imagine the job market fully recovered from the economic downturn by next year (purely hypothetical, I know, but I'd be thrilled to be wrong). What would happen to employer-sponsored insurance coverage? Not what many would hope, according to one author of a new analysis of job-based health benefits.
Chapin White, a senior researcher with the Center for Studying Health System Change, who co-authored the analysis with James Reschovsky, a senior fellow for the center, said more hiring would not address the more fundamental erosion of employer-sponsored coverage caused by fast-growing premiums.
A rebound in job-based coverage to pre-recession levels seems unlikely as long as premiums continue to grow faster than the economy and wages, as has been the case, White said.
Or as White and Reschovsky said in their paper on the drop in job-based coverage between 2007 and 2010: “The recent experience with employer-sponsored health insurance could be viewed as an acute illness aggravating a chronic condition. The acute illness—the sluggish economy and weak employment situation—likely will resolve at some point. But the underlying chronic condition—rising healthcare costs—likely will persist.”
Of course, coverage options will change in 2014 if the Patient Protection and Affordable Care Act survives its legal challenges. White said the law offers competing incentives for employer-sponsored coverage that make projections difficult.
The recession took a severe toll on employer-sponsored coverage, largely thanks to the painful job losses during the downturn, according to the center's research. The center conducted the analysis using data from a nationally representative survey for the National Institute for Health Care Reform, a not-for-profit launched by labor, the Chrysler Group, Ford Motor Co., and General Motors.
In 2010, 53.5% of non-elderly individuals had employer-sponsored insurance compared with 63.6% in 2007, the center found. Job losses accounted for most of the decline, according to White and Reschovsky:
Source: Center for Studying Health System Change
