Employees Loose Health Coverage, Go on the Public Dole

August 3, 2004 (PLANSPONSOR.com) - The proportion of Americans under age 65 with employer health coverage fell from 67% in 2001 to 63% in 2003.

The drop in the proportion of those insured translates into 8.9 million fewer people with employer coverage after accounting for population growth. However, there was little impact on the number of insured Americans as during the same time, the proportion of the under-65 population enrolled in public coverage increased from 8.9% to 11.9% between 2001 and 2003, according to a study released by the Center for Studying Health System Change (HSC).

Aggregating all of the data, HSC found the proportion of Americans under age 65 that lack health insurance increased slightly between 2001 and 2003 – from 14.1% to 15.0%.

HSC attributes thedrop in employer coverage during this time period to the recession and the decline in the likelihood of people being in a working family and, among those in a working family, less access to employer coverage. From 2001 to 2003, the study found the proportion of the under-65 population in working families with access to employer coverage fell from 80.4% to 78.2%.

The loss of employer coverage left no particular age group untouched,but changes were particularly pronounced for young adults 19 to 39 and children 18 and under. Between 2001 and 2003, the proportion of young adults with employer coverage declined from 64.9% to 59.4%. At the same time, about half of the decline in employer coverage among young adults was offset by growth in public insurance enrollment from 5.5% to 8.3%. Among all children, employer coverage declined from 63.4% to 59.5%, as this group also saw a large increase in public insurance enrollment, from 17.6% in 2001 to 24.1% in 2003. In particular, the drop in access was particularly steep from those workers falling in the low-income demographic: The proportion of this group with access declined from 62.7% to 55.4%.

Overall, HSC found changes in access were likely the result of two factors. First, among people who remained in a family with at least one worker, the number of full-time workers declined. With fewer full-time workers, families are less likely to have access to an employer that offers health insurance. Second, employers became slightly less likely to offer health insurance to their employees.

The study, Trends in US Health Insurance Coverage, 2001-2003isavailable here .