A report issued this week from the State Health Access Data Assistance Center (SHADAC) and the Robert Wood Johnson Foundation, shows that 59.5 percent of people now receive health insurance through their employer, down from 69.7 percent just 10 years ago.
The decrease continues the trend of the past 12 years that has shown a continued decline in the portion of Americans who receive employer-sponsored insurance. In total, 47 states have seen significant decreases in the percentage of residents receiving ESI. Only three states – Massachusetts, North Dakota and Alaska – have seen the proportion of residents receiving ESI remain virtually unchanged.
"It was not a surprise that there was a continued decline, as this has been going for over a decade," said Julie Sonier, deputy director of SHADAC at the University of Minnesota. "What was notable is how much variation there is among the states, which is dependent on a lot of factors like what is going on economically in the state for job gains and job losses, which is responsible for many of the variations we see."
While the broader economy and the high unemployment rate of the past few years has made some impact on the overall decline of people receiving ESI – unemployed people do not have ESI – there are other factors that have played into the recent declines.
"It is also important to remember that people who do have access to ESI, whose employers offer coverage, we see a decline in the number of people who chose to take up that coverage," Sonier added. "That's a sign of something different going on than just the effect of the economy. We think there is likely a relationship there to rising costs, because we know that employee shares of premiums have been pretty stable as a percent of the premium, but premiums are rising at a fast clip, faster than people's wages."
And while employers who offer ESI are, on average, paying for roughly the same percentage of the total costs as they have in the past, "higher costs naturally translate into fewer employers offering insurance coverage, and fewer employees accepting it, even when it is offered. That is why it is so important that people have options for purchasing affordable health insurance that meets their needs," said Risa Lavizzo-Mourey, MD, president and CEO of the Robert Wood Johnson Foundation in a press release.
Other key findings of the report include:
- Costs of insurance premiums have risen dramatically. Nationally, the average annual ESI premium for employee-only coverage doubled from 2000 to 2011 – increasing from $2,490 to $5,081. Family premiums increased 125 percent, from $6,415 to $14,447 in the same time period.
- The share of the premium that employees are asked to pay rose slightly, but the dollar amount of employee contributions more than doubled. The average share that employees pay for both types of coverage remained relatively constant--increasing from just 17.5 percent for individual coverage in 2000 to 20.8 percent in 2011. Employee contributions for family coverage increased from 23.8 percent in 2000 to 26.6 percent in 2011. The average dollar amount of employee premium contributions, however, jumped from $435 to $1,056 for single coverage, and from $1,526 to $3,842 for family coverage.
- More adults ages 19-25 are covered through employer-sponsored insurance. For young adults ages 19-25, dependent ESI coverage increased by nearly six percentage points – from 30.7 percent in 2000 to 36.5 percent in 2011. The researchers attribute this to the Affordable Care Act provision allowing children under age 26 to remain on their parents' health insurance policies, which went into effect in 2010.
- ESI rates vary significantly across states. The five states that saw the largest percentage point drops in ESI from 2000 to 2011 include Michigan (-15.2 points), South Carolina (-14.9 points), Indiana (-14.8 points), Ohio (-13.7 points) and North Carolina (-13.3 points).
- People with lower incomes are most affected. In households with income at or above about $89,400 annually for a family of four in 2011 (400 percent of federal poverty level), ESI dropped just 2.8 percentage points. In contrast, it fell by 10.1 percentage points for those with household incomes below $44,700 for a family of four (200 percent FPL).
While some opponents of the Affordable Care Act have asserted that the federal mandate to purchase health insurance will cause mass exodus of employers offering ESI and instead allow their employees to get it via the exchanges, the SHADAC research suggests that might not be the case.
Massachusetts, one of only three states to see no decline in the ESI rate, currently has a health insurance mandate upon which much of the ACA's individual mandate was crafted.
Sonier wasn't surprised that the state hasn't seen large declines in ESI.
"If you really think about the incentives out there, ESI is more valuable (to Massachusetts employees) because there is a mandate to have coverage," Sonier said. "And for employers who already offer coverage, they are likely to continue to offer coverage since they are doing it now because they need to attract and retain a qualified workforce.
"So it wasn't surprising to me that Massachusetts remain unchanged. Not that every state is like Massachusetts, but it does tell us that some of the predictions of large-scale employers dropping coverage – it's not clear why it would happen elsewhere."
[See also: Report hypothesizes that ACA will not lead to employer-sponsored health coverage drop]