Low-Wage Workers Less Likely To Have Health Insurance

March 17, 2003 (PLANSPONSOR.com) - Low-wage workers are less likely to work for companies that offer coverage or even to be eligible to participate.

Among workers who earn less than $10 an hour, two-thirds (65%) work in firms that offer health insurance coverage, compared with 88% of those who earn over $15 an hour. While working for larger companies improves low-wage workers’ chances of being offered insurance, they are still less likely to be offered or eligible for insurance than higher-wage workers, according to On the Edge: Low-Wage Workers and Their Health Insurance Coverage, a report from the Commonwealth Fund .

Low-wage workers may lose out because of requirements that they work a certain number of hours, or because of their status as a temporary or contract employee. These workers in large firms find that while 85% work in firms that offer coverage, only 69% are eligible. In contrast, higher-wage workers in larger firms are both offered (97%) and eligible (96%) for health benefits.

Primary Giver

While employment-based health insurance is the primary system of health coverage in the United States, only 70 million of the 120 million workers in the United States have health benefits through their employers. The remaining 50 million have coverage through someone else’s employer or the individual market, are insured through a public program, or are uninsured.

Nearly half (45%) of those who do not have coverage through their own employers are workers who earn less than $10 an hour. The study found that public programs such as Medicaid and the State Children’s Health Insurance Program end up taking on some of the responsibility where employers are not providing coverage.

Less Coverage

When low-wage workers do get health insurance through their jobs, coverage is not as good as that of higher-wage workers. They are notably less likely to have prescription drug, dental, or vision benefits.

Lack of health insurance or less adequate insurance leads to two of five workers earning less than $10 per hour not seeing a doctor when they were sick, not filling a prescription, not seeing a specialist when needed, or skipping a recommended medical test because of cost. Similarly, two of five had problems paying their medical bills, including facing collection agencies.