Employer-Sponsored Health Coverage Continues Decline

October 13, 2008 (PLANSPONSOR.com) - The share of the U.S. population under 65 years old with health insurance rose from 2006 to 2007, but it was not thanks to employer-sponsored coverage, according to an Economic Policy Institute (EPI) report.

From 2000 to 2007, employer-sponsored health coverage declined from 68.3% to 62.9% – meaning that over three million fewer people under the age of 65 had employment-based insurance in 2007 than in 2000. Coverage declines crossed all lines: age, sex, race, education, and household income level, said EPI Briefing Paper author Elise Gould.

According to the report, children under 18 (-6.5 points), adults 18-24 years old (-5.1), and adults

25-54 years old (-6.1) experienced significant declines in employer-sponsored health coverage. By race, in 2007, 70.8% of whites had employer-provided coverage as compared to 51.6% of African Americans and 41.4% of Hispanics.

Those with a high school education or less and those in the second-to-lowest fifth (20-40%) of the income scale continue to be the hardest hit by coverage declines in the last five years, the report said. High school graduates were not only less likely than college graduates to have employer-provided insurance in 2007 (56.4% vs. 80%), but they experienced declines in coverage more than twice as large (9.2 vs. 3.6 percentage point drops).

The lowest rates of employer-sponsored coverage occurred within households with the lowest incomes. Only about one in five individuals in households in the bottom 20% of the income scale had employer-provided health insurance, whereas more than four in five individuals in households with the highest 20% of income had such coverage.

Currently, the states with the highest employer-provided coverage rates for those under 65 are New Hampshire (75.4%), Hawaii (72.5%), and Connecticut (72.3%). The lowest coverage rates were found in New Mexico (50.7%), Texas (53.5%), and Mississippi (53.7%).

The EPI Briefing Paper is here .