Job-based health plans declining
A new study finds fewer employees receive coverage as medical costs soar
By Aurelio Rojas
Sacramento Bee Capitol Bureau
What was once a social compact - work, and chances were you would get health insurance through your employer - is fraying as medical costs soar, according to a new study.
The UCLA Center For Health Policy Research, which provides lawmakers with data to formulate policy, found that in 2003, only about half (53.8 percent) of non-elderly Californians were covered throughout the year by insurance from their employer.
That represents a drop of 2.6 percent between 2001 and 2003.
“Three-quarters of all of the uninsured in the state are in families that work,” E. Richard Brown, director of the center, said in an interview. “Sixty percent are in families headed by someone who works full time.”
As health costs rise, a growing number of policy-makers - including President Bush - are promoting personal responsibility as an alternative to the job-based system that covered most working Americans for the past half-century.
In California, Assemblymen Keith Richman, R-Northridge, and Joe Nation, D-San Rafael, plan to introduce legislation that would require all Californians to have health care. The state would subsidize low-income workers.
More than 6.5 million people in the state were without insurance at some point in 2003, including nearly 1 million children, according to the UCLA study.
The percentage of uninsured adults increased slightly from 2001. But the overall rate remained flat as enrollment of children surged in the state’s Medi-Cal and Healthy Families programs.
Brown said the overwhelming majority of the uninsured live in families whose low income puts health insurance out of financial reach.
“For workers who are trying to buy family coverage through their employer, the average increase in the share of the cost they have to pay rose 79 percent between 2001 and 2003,” Brown said. “That’s huge.”
Anthony Wright, spokesman for Health Access California, a coalition of consumer and labor groups, said the move away from employer-based health insurance has been gradual.
“It’s very rare that a business says, ‘You have health care coverage this month, but we’re going to drop it next month,’ ” he said.
“What’s more likely is that for new hires, they change the rules. The Southern California grocery strike is a classic example.”
In October 2003, 59,000 union members went on strike or were locked out. When a settlement was reached 4 1/2 months later, they retained their health benefits.
But new hires now have to wait more than a year before qualifying for coverage. The trend, repeated in other industries, has put a strain on state programs.
“The reason the costs of Medi-Cal and Healthy Families are increasing is because more people are getting on them,” Wright said. “What happens when the state begins cutting costs?”
Hospitals are bearing an added burden as emergency rooms turn into primary care providers of last resort.
Because of uncompensated care, a growing number of hospitals have shuttered their emergency units. In Sacramento, UC Davis Medical Center soon will begin turning away patients who do not need emergency care.
In the aftermath of November’s narrow defeat of Proposition 72, which would have required employers to provide insurance for workers, several proposals are taking shape in the Capitol.
Sen. Sheila Kuehl, D-Santa Monica, has introduced a “single-payer” universal health care plan designed to reduce administrative costs by squeezing out insurance companies. State Senate President Pro Tem Don Perata, D-Oakland, supports her bill.
Assembly Speaker Fabian Núñez, D-Los Angeles, said he will soon announce his support for a proposal. But he believes many employers are shirking their responsibilities.
“They ought to be ponying up and paying a bigger share of the premiums, and we need to contain health care costs,” he said. “Because if we don’t contain health care costs, the premiums are going to continue to rise.”
Gov. Arnold Schwarzenegger, however, has indicated he may be receptive to requiring individuals to have health insurance to address the issue of the uninsured.
“We have to really address this once and for all and figure out a way of how we do it, like with car insurance, where we make it law that people carry insurance, and they are really insured,” the Republican governor said last fall.
President Bush’s “ownership society” also calls for shifting the nation from an employer-based insurance system. Workers would buy higher-deductible catastrophic insurance policies to cover major medical needs.
Routine medical costs would be paid with money set aside in tax-sheltered health savings accounts. Poor families would received $3,000 annual subsidies.
Brown said most poor families still will not be able to afford coverage, because the average cost of health care purchased through an insurance pool is about $7,000 for a family of four.
The Richmond-Nation proposal, he said, likely will face the same problems.
“It’s a tough problem, and there aren’t going to be any easy answers,” he said. “But the solutions really need to match the reality.”