Americans losing health coverage at alarming rate

Americans are losing health coverage every way you look at it, due primarily to a “precipitous decline in employer-provided health coverage for workers and their dependents.”

Those are the conclusions of a Sept. 9 report by the Kaiser Family Foundation, and a Sept. 16 report released by the Economic Policy Institute, a union-supported non-partisan research institute that studies the impact of economic trends and policies on working people.

Based on data from the U.S. Census, the EPI reports that health coverage has been declining for three years in a row.

The total number of uninsured Americans rose five million from 2000 to 2003, and now numbers 45 million. About 1.4 million of that increase occurred in 2003.

Part of that increase was due simply to job loss among workers who had employer-provided health insurance. But more importantly, the jobs workers are losing were more likely to have health benefits than the new jobs that are replacing them.

The proportion of job-holders with employer-sponsored health coverage dropped from 58.9 percent in 2000 to to 56.4 percent in 2003.

The impact is not just on the workers themselves, but on their families. Many children, no longer covered by their parents’ employer-paid health plans, are being picked up by government health programs like the State Children’s Health Insurance Program. Over 2.4 million fewer children had employment-based health insurance in 2003 than in 2000.

Among lowest-income fifth of families, about one in four people were covered in 2000 and, in 2003, just over one in five.

But the largest decline came for individuals in families ranked in the second-lowest fifth by income, (families making $20,000 to $37,700 a year). Since 2000, coverage for that group fell from 54.6 to 49.0 percent.

Those with the least education or income lost ground, but so did those with college degrees and higher incomes. About 52.9 percent of workers with a high school education were covered in 2003, while 68.8 percent of college-educated workers had employer-provided health coverage.

Data released Sept. 9 by the Kaiser Family Foundation suggest the downward trend in employer coverage will continue. The Foundation found an increase in premiums of 11.2 percent between 2003 and 2004, the fourth straight year of double-digit increases.

The increase was almost five times the rate of inflation (2.3 percent), and more than five times the rate of workers’ wage gains (2.2 percent).

In 2004, premiums reached an average of $9,950 annually for family coverage ($829 per month) and $3,695 ($308 per month) for single coverage.

The cost of family coverage is rapidly approaching the entire annual earnings of a minimum wage worker. [A full-time worker earning the federal minimum wage of $5.15 an hour grosses $10,700 a year. A full-time worker earning the Oregon minimum wage of $7.05 grosses $14,660.]

Since 2000, the cost of health insurance has jumped 59 percent, while workers’ wages have increased only 12 percent.

Workers on average contribute $558 of the $3,695 annual premium cost of single coverage and $2,661 of the $9,950 cost of premiums for family coverage. Average employee contributions for single coverage are statistically unchanged from 2003, while average employee contributions for family coverage grew by 10 percent — a similar rate to the average overall premium increase. The percentage of premiums paid by workers is statistically unchanged over the last several years, at 16 percent for single coverage and 28 percent for family coverage.

Just for premium contributions alone, families are paying $1,000 more this year for their health coverage than they paid in 2000.

Given these increases, small employers in particular are less likely to offer health benefits. In addition, families are less able to afford the premiums associated with employer coverage. All of these data point toward a further drop in the number of Americans with employer-provided health coverage in the coming year.

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