Recession Leads to Record Drop in Workplace Health Coverage: EBRI
April 29, 2011 (PLANSPONSOR.com) – The Employee Benefit Research Institute (EBRI) reports that the percentage of workers who received employment-based health benefits through their jobs suffered a 2.4% decline between 2008 and 2009.
That percentage decreased from 53.2% in 2008 to 52% in 2009, according to the report. The data also show that during the recession the percentage of workers with coverage as a dependent fell from 17% in 2008 to 16.3% in 2009, a 4.5% drop.
EBRI noted that 2009 marked both the sharpest one-year decline in employment-based health coverage for working age Americans, and also the first time in recent history that less than 60% of individuals under age 65 had health benefits through a job. The analysis uses data from 2008 and 2009 that were collected in the March 2009 and March 2010 Current Population Survey following the 2007−2009 recession.
Paul Fronstin, director of EBRI’s Health Research and Education Program and author of the report, notes that unemployment and health coverage are strongly related: When the employment rate falls, health coverage also falls as jobs—and the health benefits that come with them—are lost.
The study found the decline in coverage corresponded with the rising unemployment rate during the recession, from an average of 5.8% in 2008 to 9.3% in 2009, and a high of 10.1% during 2009.
Fewer Offered Coverage
The EBRI report also noted that fewer employers offered coverage, which means that fewer workers have access to coverage, and workers’ wages are not keeping pace with health care premiums, meaning fewer workers with access to coverage are likely to enroll in health plans. Structural changes in the work force, such as the movement of workers away from manufacturing jobs and from full-time and full-year work, also contributed to the decline, according to the report, which appears in the April 2011 EBRI Issue Brief, “The Impact of the 2007−2009 Recession on Workers’ Health Coverage.”
“As we start to examine the data from 2010, we will be able to determine whether the economic recovery has started to have an effect on health benefits among workers who lost coverage during the recession,” Fronstin said.
The report notes that the decline in health coverage affected different groups in different ways. Among the other findings:
Workers with a high school education or less experienced a statistically significant decline in the likelihood of having coverage. The percentage of workers with less than a high school education who had health coverage through their job fell from 27.5% to 25.6% between 2008 and 2009, and among those with a high school education, the percentage with coverage through their job slipped from 50.2% to 48.4%. However, neither workers with a college degree nor those with a graduate degree experienced a statistically significant decline in coverage through their own jobs, according to the report.
Workers of all races experienced what EBRI termed “statistically significant” declines in coverage between 2008 and 2009, according to the report. . The likelihood that non-Hispanic whites had coverage through their own job fell from 56.2% to 55.2%, while among non-Hispanic blacks, the percentage with coverage fell from 53.5% to 51.9% Among Hispanics of all races, the percentage with coverage through their own job fell from 39.5% to 36.9%.
EBRI noted that both men and women also experienced a statistically significant decline in the percentage with health coverage through their own job; the percentage of men with coverage through their own job fell from 56.2% to 54.3%, while the percentage of women with coverage through their own job slipped from 50.1% to 49.5%.
Workers in nearly all age cohorts experienced a statistically significant decline in the percentage with health coverage through their own job, with the exception of those ages 18−20 and 55−64. While the youngest workers did not experience a statistically significant decline in coverage (they were the least likely age cohort to have coverage through their own job), neither did the cohort that included workers aged 55-64, though they were the most likely age cohort to have coverage through their own job.
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