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Number of Workers Covered by Employers’ Health Care Continues to Drop

The number of workers who received health insurance coverage from their employers dropped in 2004, according to recently released U.S. Census Bureau data.

The report, titled “Income, Poverty, and Health Insurance Coverage in the U.S.,” found that 59.8 percent of Americans were insured by their employers last year, down from 60.4 percent in 2003.

“This has been on the decline following the recession, and it just has continued to drop,” says Catherine Hoffman, associate director of the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured. “We get messages that jobs are coming back and think that might mean that this statistic would hold steady, but those jobs that are growing are not in industries that tend to offer health care benefits.”

As health care premiums continue to increase, more employers, particularly small businesses, are opting to not offer health care coverage to workers. A recent survey by United Benefit Advisors, a group of employee benefits advisory organizations, found that while employers expect a slow decline in health care cost increases, they still anticipate average cost increases of 12.2 percent next year.

The continued increase in health care premiums is causing many low-income employees to opt out of their plans, Hoffman says. “As more employers offer plans with higher deductibles and more cost-sharing, many employees have to decide if they can afford to be covered by their employers’ plans,” she says. In many cases, employees will first drop dependents off of their plans, but more often, they eventually opt out of the plan altogether.

The United Benefits Advisors survey, which was based on responses from 8,700 employers, found that average monthly health care premiums have increased to $327 for single coverage, with employees contributing an average of $53 of the cost. Average monthly premiums for full family coverage average $927, with employees contributing an average of $381.

The number of people with no health insurance who worked at some point during the year increased to 27.4 million in 2004 from 26.6 million in 2003, the Census Bureau data shows. Among 18- to 64-year-olds, 82.2 percent of full-time workers were covered by health insurance, compared with 75 percent of part-time workers and 74.2 percent of nonworkers. Most of these part-time workers and nonworkers are likely dependents of covered full-time workers, Hoffman says.

The Census Bureau report shows that the number of uninsured full-time workers increased to 21.1 million last year from 20.6 million in 2003, while uninsured part-timers rose to 6.3 million from 5.9 million. “As long as premiums continue to climb and outpace the rate of wage growth, we are going to see the number of employees who are covered by their companies’ health care plans decrease,” Hoffmann says.

Jessica Marquez