Just How Secure Is Your Employer-Based Health Insurance?
23 04 08 - 12:05
By Maggie Mahar, Health Beat. Posted April 23, 2008.
Many workers believe that if they keep their job, their insurance is safe. That may have been true in the '90s, but not now, not even for top execs.
Last week, the Economic Policy Institute released a disturbing report revealing just how many white-collar workers have lost their employer-based health insurance in recent years -- even though they didn't change jobs.
Many workers believe that if they hold onto their job, their insurance is safe. Professionals with jobs near the top of the occupational ladder are especially likely to assume that their employer is not going to cut their coverage. That may well have been true in the 1990s, when the job market was tight -- but not today.
The EPI report shows that in just the first six years of this century, the share of U.S. workers with employer-provided health insurance (EPHI) fell from 51.1 percent to 48.8 percent. Moreover, workers in white-collar occupations -- including executives, managers and workers in professional specialties -- were just as likely as blue-collar workers to lose their safety net.
Perhaps this shouldn't come as a surprise, since employers typically pay a much larger share of premiums for higher-income employees. So as insurance premiums soar (up 78 percent since 2001), employers are beginning to chafe under the very costly burden of providing first-class benefits to white-collar employees. (Insurance premiums rose "only" 6.1 percent in 2007, but going forward, experts expect sharper increases because the cost of medical technology continues to skyrocket).
Most employers will just shift more costs to employees in the form of higher co-pays and deductibles. But some will decide that they cannot continue to offer insurance.
"No one is immune to the slow unraveling of the employer-based health insurance system," warns Heidi Shierholz, EPI economist and co-author, with Jared Bernstein, of the report "A Decade of Decline: The Erosion of Employer-Provided Health Care in the United States and California, 1995-2006."
"This dramatic loss of employer-provided health insurance since 2000 is not simply driven by the loss of high-quality jobs, such as those in the manufacturing sector," the report observes. "Rather, it is caused by the significant decline in employers providing coverage within existing jobs across the board. The burden of these employer cuts is not carried by part-time or marginal workers. Rather, the most dramatic loss is among workers with the strongest connection to the labor force."
Note, for example, the startling declines, from 2000 to 2006, in the share of workers covered by EPHI as shown in the bottom half of the table below (click for larger version). At the top of the job ladder, in the first three occupations listed, the percentage of executives, professionals and technicians with employer-based coverage fell by over 3 percent to 5.6 percent.