The number of private-sector workers who get health insurance through their employer has been declining steadily since well before the Great Recession, according to a new analysis published by the Robert Wood Johnson Foundation (PDF). And trend started nearly a decade before the healthcare reform law took effect.
The foundation said the findings should diffuse concerns that the Patient Protection and Affordable Care Act is the primary cause of the erosion in employer-sponsored insurance.
Both before and after the recession, the trend was for fewer employees to accept health insurance from their employer in response to rising premiums and deductibles. After the economic downturn, fewer companies offered coverage, fewer workers were eligible for their companies' plans and fewer eligible employees elected coverage. The dynamics in part reflect a shift toward part-time work.
The percentage of workers taking up employer-based coverage fell to 77.8% from 79.7% between 2005 and 2009 and then to 75.3% by 2013, according to the study. In those eight years, the number of employers offering insurance dropped nearly 6 percentage points, from 55.7% to 50%, and fewer workers were eligible. Part-time workers and small businesses showed the biggest declines in coverage—the decrease was 11 times larger for them compared with larger employers.
The report was compiled by the Minneapolis-based State Health Access Data Assistance Center. SHADAC uses private-sector data from the Medical Expenditure Panel Survey-Insurance Component, also known as MEPS-IC, a study sponsored by the federal Agency for Healthcare Research and Quality. SHADAC is a program of the Robert Wood Johnson Foundation.
Understanding that employer-sponsored coverage was on the decline long before the rollout of the Affordable Care Act should help Americans understand that the law gave them an alternative to health coverage that was already becoming unaffordable and less available, said Katherine Hempstead, director of coverage issues for the foundation. The study, she said, “sheds some light on a problem that the ACA was trying to solve.”
The average annual premium for employee-only coverage across the U.S. increased 42.4% from $3,848 in 2005 to $5,478 in 2013, according to the report. Average family-coverage premiums increased 57% during the same period. Hempstead said the decrease in employer-sponsored coverage and the increase in costs led insurance companies to invest in plans with lower actuarial value, including high-deductible plans and many of the offerings on the healthcare exchanges.
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