Employer Coverage Continues Its Slow Erosion

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Although there were some signs of a brief stability between 2006 and 2007, the number of people covered by employer-sponsored insurance continued to decline, falling to 59.3 percent in 2007, down from 59.7 percent in 2006.[i] The decline continues a trend of decreasing employer-sponsored coverage that began in 2000. Furthermore, the percentage of employers offering health insurance coverage has fallen from 69 percent in 2000 to 63 percent today, a worrisome drop given that employer-sponsored coverage is the primary source of coverage for most people under age 65.[ii]And, for small employers, the trend is more alarming; whereas 57 percent of firms with three to nine workers offered coverage in 2000, the figure has dropped to less than half today (49 percent).[iii]


Figure: Average Annual Premiums For Single and Family Coverage, 1999-2008
Health insurance premiums continued their upward march in 2008, increasing by 5 percent from 2007 average premiums. The increase was relatively modest compared to that of past years. Nonetheless, many workers face higher deductibles and out-of-pocket costs.  A growing share of workers—now at 18 percent—have insurance policies with deductibles of at least $1,000, a significant increase over last year’s 12 percent of workers with deductibles of the same level. But the increase is most noticeable among employees of small firms with 3 to 199 workers; more than one-third (35 percent) of these workers must pay at least $1,000 out of pocket before their insurance starts to pay, up from 21 percent in 2007.[iv]




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[i] DeNavas-Walt, C. et al. Income, Poverty, and Health Insurance Coverage in the United States: 2007, U.S. Census Bureau, Current Population Reports, Washington, DC: U.S. Government Printing Office, 2008, pp.60-235.
[ii] “Employer Health Benefits Annual Survey, 2008,” Kaiser Family Foundation and Health Research Education Trust, September 2008.
[iii] Ibid.
[iv] Ibid.