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Less Than Half of Americans Have Health Insurance Paid for by Private Employers

September, 1999

New England Journal Study Finds Role of Private Employers Has Been Exaggerated: Government and Individuals Pay for Most Care

Cambridge, MA -- While 61% of Americans get their health insurance on the job, private employers aren't picking up that much of the tab, according to a study published in today's New England Journal of Medicine. Excluding workers with insurance paid for by the government or by employees themselves, fewer than half of Americans (43%) have health insurance paid for by a private employer. Moreover, private employers pay for an even smaller share of total health spending, just over one-fifth (21.2%).
"On one hand, there's a nearly universal misconception that private employers are paying for most Americans' health care," commented Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard and a co-founder of Physicians for a National Health Program. "On the other hand, it's a well-kept secret how much health care taxes and individuals fund."

The study found that 34% of Americans are covered by government-paid insurance, including 22 million government workers and 69 million persons with Medicare, Medicaid, Veteran's Administration, or other government-paid insurance. In six states, more residents had government-funded insurance than had private employer-paid coverage (Alaska, D.C., Montana, New Mexico, Oklahoma, and Tennessee). Also, in only six states did more than half of the population receive coverage from a private employer (Connecticut, Illinois, Massachusetts, New Hampshire, Ohio, Wisconsin).

The percentage of residents with insurance paid for by a private employer ranged from a low of 25.6% in New Mexico to 53.8% in Wisconsin. The proportion of residents with government-paid insurance ranged from a high of 51.7% in Alaska to 28.0% in Iowa. The study analyzed data from the Census Bureau's 1997 survey of about 50,000 households.

Seven percent of Americans buy their own insurance, including 9.1 million workers who get insurance through work but pay the entire premiums themselves. 16% of Americans are uninsured. Including insurance premiums and out-of-pocket costs for care, individuals fund over one-quarter of total health costs (26%) previous studies show. Government pays for nearly half, (47%).

"Private employers' influence over health care is way out-of-proportion to how much coverage they pay for," said Dr. Olveen Carrasquillo, one of the study's authors and an internist at New York's Columbia Presbyterian Hospital. "We need a more democratic health policy debate."

"Most developed countries make health insurance a right, not a job benefit," said Dr. David Himmelstein, a co-author of the study and Associate Professor of Medicine at Harvard. "We should too."