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More workers opting out of company health plans

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Ninety percent of uninsured workers said they didn't have insurance because it was too costly.

The weak economy continues to have a harsh effect on workers’ access to health insurance -- not necessarily because workers aren’t offered it but because they can’t afford it.

A new study from the Employment Benefit Research Institute finds that 55.8 percent of employees were getting health insurance directly from their employer as of April 2011, the most recent data available. That’s a nearly 5 percentage point drop from December 2007, when the economy first went into recession, and the researchers said early research shows that the number probably fell further.

The drop comes after more than a decade in which the rate of employees getting insurance in their own name held steady at around 60 percent.

It appears that it’s the cost, not the availability, of health insurance that is the primary thing keeping workers from getting insured. Ninety percent of uninsured workers said they didn’t have insurance because it was too costly.

The study was based on government data on workers age 18 to 64.

Paul Fronstin, director of EBRI’s health research and education program, said many employers have been gradually asking employees to foot more of the bill for their care through higher deductibles and co-payments.

“Employers have changed their focus to managing cost by changing the quality of the coverage that’s being provided,” Fronstin said. “You see more cost shifting and more employee responsibility when it comes to the cost of health care services.”

He said monthly premiums have not necessarily risen as much, but neither have wages. That may mean people feel like they are forking over a bigger slice of their paycheck for an insurance plan that requires higher and higher deductibles and other out-of-pocket expenses.

“It’s the value of the plan that’s changed more than the premium,” he said.

Some who drop their employer’s coverage may be switching to cheaper private plans or getting covered by a spouse, partner or parent. The percentage of workers who are covered as a dependent on someone else’s plan has held steady at around 17 percent.

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Others may just be giving up health insurance altogether.

As the job market becomes stronger, some employers might start offering better health care benefits to compete for key employees.

But Fronstin noted that because employers generally make decisions about health care coverage six months to a year in advance, any improvements will likely lag quite a bit.


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