Job Loss, Rising Premiums Take Toll on Employer Health Coverage in 2003

Dramatic Decline in Employer Coverage Offset by Public Coverage Gains, Especially for Children

News Release
August 3, 2004

Alwyn Cassil: (202) 264-3484

ASHINGTON, D.C.—The proportion of Americans under age 65 with employer health coverage fell dramatically from 67 percent in 2001 to 63 percent in 2003, translating into almost 9 million fewer people with employer coverage after accounting for population growth, according to a national study released today by the Center for Studying Health System Change (HSC).

Despite the drop in employer coverage, public coverage gains forestalled a significant increase in the uninsured, according to findings from HSC’s 2003 Community Tracking Study Household Survey, a nationally representative survey involving information on about 25,400 families and 46,600 people. The proportion of the under-65 population enrolled in public coverage—primarily Medicaid and the State Children’s Health Insurance Program (SCHIP)—increased from 9 percent to 12 percent between 2001 and 2003.

By far, low-income children—those living in families with incomes below 200 percent of the federal poverty level, or $36,800 for a family of four in 2003—saw the largest gains in public coverage, with enrollment growing from 37.9 percent in 2001 to 49.3 percent in 2003, or an increase of almost 5 million low-income children covered by public insurance.

"Clearly, public insurance expansions provided a safety net for millions of people—especially children—who otherwise probably would have lost coverage as the country moved through a recession and jobless recovery," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

Because of the recession, there was a notable drop in the proportion of the U.S. population in a family with at least one worker: 84.2 percent of the under-65 population was in a working family in 2001 compared with 81.4 percent in 2003, according to the HSC study.

"While the economic downturn reduced employment and accounted for much of the decline in employer coverage, the rapidly rising cost of health insurance, which increased about 28 percent between 2001 and 2003, likely contributed to the decline as well," said HSC Health Researcher Bradley C. Strunk, who co-authored the study with HSC Senior Health Researcher James D. Reschovsky, Ph.D.

Released today at the launch of the Covering Kids & Families Back-to-School Campaign, the study is detailed in a new HSC Tracking Report—Trends in U.S. Health Insurance Coverage, 2001-2003.

Other key findings include:

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.

Covering Kids & Families, a program of The Robert Wood Johnson Foundation, is a national initiative to increase the number of children and adults who benefit from federal and state health care coverage programs. For more information, visit