Heath insurance becoming a rare work benefit

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For decades, employer-provided health insurance has been commonplace, but that trend is reversing.

In Pennsylvania and every other state in the nation, a smaller share of people get their health insurance through an employer than did in 2000, according to a study from the Robert Wood Johnson Foundation in Princeton, N.J.

The share of under-65 Pennsylvanians getting their health care through an employer dropped from 78 percent in 2000 to 67 percent in 2011. But Pennsylvanians still are more likely to receive health insurance through work than the national average of 59.5 percent, which is down from 69.7 percent in 2000.

The cause of the drop is two-fold and straightforward: fewer private sector employers (about half) are offering health care coverage, and even when there is an employer health plan available, fewer employees are signing up.

In 2000, according to the report, 83.1 percent of employees offered coverage enrolled; a decade later, 77.8 percent did.

Why are fewer people taking advantage of the availability of health coverage?

Partly, the expense. In 2000, a Pennsylvania employee contributed $385 annually toward individual health premiums and $1,231 for a family plan; by 2011, employee contributions rose to $1,009 for single coverage and $3,361 for family coverage.

"It's an increasing strain on employers [and] also an increasing strain on employees," said Julie Sonier, deputy director at the University of Minnesota's health data center, which prepared the report for the Robert Wood Johnson Foundation.

Pre-World War II, few Americans had health insurance, and if they did, it wasn't necessarily tied to a job. By the 1960s, employer-based health coverage was commonplace, peaking in the 1990s. Throughout the 2000s, the percentage of people getting health care through their jobs has been declining.

The decline is part of a larger trend of employers trying to shed legacy and benefits liabilities -- retirement accounts are another example. Pensions used to be a standard benefit, but for years companies have been shifting out of "defined benefit" retirement plans and moving employees into privately manage 401(k) plans.

While there are those on both sides of the political aisle who might cheer the eventual severing of the tether that connects employment and health insurance, such a divorce has taxpayer implications.

For better or worse, employer-based health insurance is "a pillar of the way we finance health care in this country ... the fact that it's eroding is a concern," Ms. Sonier said. People who don't get health insurance through work often go without coverage, or go onto Medicaid rolls.

The trend shows no signs of letting up.

Even with the recession abating and the unemployment rate dropping over the last four years, many of the jobs that have been created are service industry and retail jobs that may not offer subsidized health insurance options to employees.

The 2010 Affordable Care Act hopes to provide an option for those without health care by setting up online health care "exchanges" where people can shop for subsidized individual or family policies -- and by fining people who don't obtain health insurance but have the financial means to do so.

Skeptics of the Affordable Care Act believe the reform law gives companies an incentive to dump their workers onto exchanges over the next decade, which would further reduce the percentage of people getting health care through work.

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Bill Toland: btoland@post-gazette.com or 412-263-2625.


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