Press Releases

News from EPI Employer-sponsored health insurance coverage declines for eleventh year in a row

For Immediate Release: Wednesday, December 5, 2012
Contact: Phoebe Silag or Donte Donald, 202-775-8810

Employer-sponsored health insurance coverage declines for eleventh year in a row

In 2011, the percent of Americans under age 65 covered by employer-sponsored health insurance (ESI) declined for the eleventh year in a row, finds a new Economic Policy Institute (EPI) report. In Employer-sponsored health insurance coverage continues to decline in a new decade, Elise Gould, EPI’s director of health policy research, explains that the share of Americans under 65 covered by employment-based health insurance fell from 58.6 percent in 2010 to 58.3 percent in 2011. However, public health insurance coverage and key components of the Patient Protection and Affordable Care Act that took effect in 2010 shielded many Americans, primarily children and young adults, from becoming uninsured.

Because most Americans, particularly those under age 65, rely on health insurance offered through their jobs, the fall in employer-sponsored health insurance is expected at a time when the economy is struggling. However, the fall in ESI started long before the Great Recession. As many as 29 million more people under age 65 would have had ESI in 2011 if the coverage rate had remained at the 2000 level, 69.2 percent. And workers age 19 to 64 were nearly 30 percent more likely to be uninsured in 2011 than in 2000.

Public health insurance, primarily in the form of Medicaid and CHIP, was responsible for preventing millions from becoming uninsured.  Public health insurance covered 25 million more people under age 65 in 2011 than it did in 2000.  In fact, although children saw larger declines in ESI than adults over the 2000s, they experienced an increase in total coverage rates due to public insurance, as the share of children with public coverage grew 14.6 percentage points from 2000 to 2011.

Through provisions in the Patient Protection and Affordable Care Act (also known as health reform) that took effect in 2010, young adults up to age 26 were able to secure health insurance coverage through their parents’ health insurance policies. While this provision appears to improve the low coverage rates for 19- to 25-year-olds, coverage for young adults through this avenue is dependent on parental coverage, which has suffered in recent years due to the struggling economy. Furthermore, young adults whose parents do not have the advantage of ESI (disproportionately non-whites and/or those with less education and/or lower incomes) are not able to take advantage of this provision.

“Employer-sponsored health insurance is increasingly failing American families, causing far too many people to fall through the cracks,” Gould said. “While provisions in the Patient Protection and Affordable Care Act have helped mitigate the trend and will help more individuals and families in the future, the labor market’s insufficient job creation and workers’ ever-decreasing bargaining power will likely lead to further losses in employer-sponsored insurance coverage before major relief from health reform materializes.”

New Hampshire had the highest rate of ESI coverage among the under-65 population, at 72.0 percent in 2010/11. It was followed by Massachusetts (70.5 percent), Connecticut (69.8 percent), Minnesota (68.7 percent), Utah (68.6 percent) and Maryland (67.4 percent). In contrast, less than half of both New Mexico’s and Louisiana’s non-elderly population have ESI, at 47.6 percent and 49.7 percent, respectively.

Below is a list of state groups offering a state-level analysis of the findings published in this report:

Colin Gordon, Senior Research Consultant
Iowa Policy Project

Judy Putnam, Communications Director
Michigan League for Public Policy

New Hampshire
Deb Fournier, Policy Analyst
New Hampshire Fiscal Policy Institute (NHFPI)
603-856-8337 ext. 3

New Jersey
Jon Whiten, Director of Communications and Development
New Jersey Policy Perspective
609-393-1145 ext. 15

Lincoln Nehring, Sr. Health Policy Analyst
Voices for Utah Children

West Virginia
Ted Boettner, Executive Director
West Virginia Center on Budget and Policy

Jon Peacock, Research Director
Wisconsin Council on Children and Families
608-284-0580 ext. 307

Laura Dresser, Associate Director
Council on Wisconsin’s Strategy (COWS)