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Economic Boom Failed to Boost Employer Health Coverage for Working Families
Low-Income Children Gain Coverage Through Public Insurance Expansion
FURTHER INFORMATION, CONTACT:
ASHINGTON, D.C.—The proportion of Americans in working families covered by employer-sponsored health insurance remained almost flat between 1997 and 2001, with the recent economic boom only suspending a long and steady decline in employer-sponsored health insurance, according to a national tracking study issued today by the Center for Studying Health System Change (HSC).
Growing public health insurance enrollment rather than expansion of employer-based insurance drove the slight decline in the proportion of uninsured Americans in working families, but more than one in 10 people in working families, or 22 million Americans, remained uninsured in 2001, the study found. Uninsured people in working families constitute about two-thirds of the total number of uninsured people in the United States.
"These findings tell us that relying on economic growth alone to reduce the number of uninsured wont work," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation. "Short of a major public investment—either through subsidies to purchase private insurance or public coverage expansions—significantly reducing the number of uninsured Americans in working families isnt likely."
Of the estimated 189 million nonelderly people in working families in 2001, about 76 percent, or 143 million people, had access to coverage from a current employer and chose to take up the coverage. Another 8 percent, or 16 million people, had access to employer coverage but declined it for a variety of reasons. A third group—30 million people in working families, or 16 percent—did not have access to coverage from a current employer, including about 3 million people who had coverage through a previous employer.
The studys findings are detailed in a new HSC Tracking Report—Working Families Health Insurance Coverage, 1997-2001. Based on results from HSCs Community Tracking Study Household Survey, a nationally representative survey involving about 60,000 people in 33,000 families, key findings include:
People with low incomes—below 200 percent of poverty, or about $35,000 a year for a family of four in 2001—people in fair or poor health and people who work for an employer with fewer than 100 workers are more likely to lack access to and decline employer coverage.
The study also found dramatic improvements in coverage of children in low-income working families. The proportion of uninsured children fell 4.9 percentage points, from 20.4 percent in 1997 to 15.5 percent in 2001. Enrollment of children in public programs rose 10.3 percentage points, from 21 percent in 1997 to 31.3 percent in 2001. At the same time, the percentage of low-income children in working families with employer coverage dropped 4.4 points, from 55.4 percent to 51 percent.
These findings indicate that the State Childrens Health Insurance Program, or SCHIP, played a significant role in reducing the number of uninsured low-income children in working families, but that some substitution of public for private coverage also occurred. When SCHIP was enacted in 1997, Congress required states to put safeguards in place to prevent substitution, or so-called "crowd out," of private coverage for public coverage. About 2 million children in low-income working families gained public coverage between 1997 and 2001, and a third to a half of the increase came from children who otherwise would have had employer coverage.
"Evidence suggests that some of the gains in childrens public coverage were a shift from private to public insurance," said Bradley C. Strunk, an HSC health research analyst who co-authored the study with HSC Senior Researcher James D. Reschovsky, Ph.D.
Helen Darling, president, Washington Business Group on Health, www.wbgh.org
Ron Pollack, executive director, Families USA, www.familiesusa.org
Don Young, M.D., president, Health Insurance Association of America, www.hiaa.org
The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nations changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded exclusively by The Robert Wood Johnson Foundation and affiliated with Mathematica Policy Research, Inc.