Health coverage problems hit big business

Lawmakers must focus on ways to help workers afford insurance, experts said.

By Joel B. Finkelstein, amednews staff. Nov. 10, 2003.

Washington -- A study showing that the number of workers at large companies with health insurance is on the decline raises new questions about proposals to expand health coverage through the employer-based system.

Congressional efforts to increase insurance through such proposals as mandated coverage or deregulation of association health plans focus mostly on small businesses and would not address the problems that prevent workers at companies of all sizes from obtaining coverage, experts warned.

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The Commonwealth Fund study said the population of uninsured employees at large companies looks a lot like that of small companies, with the working poor being disproportionately affected, said Cathy Shoen, the fund's vice president for research, evaluation and health policy.

"Large employers have been the bedrock of insurance for the under-65 population, and most of the attention, up to now, has been focused on the problem of small firms not offering health coverage," she said.

Now attention may need to turn toward large employers as well.

"This study documents what working families have known for some time, which is that working at a large firm doesn't at all guarantee that you will have affordable health coverage," said Gary Shea, AFL-CIO assistant to the president for government affairs. "You're much more likely to have a plan offered to you, but whether or not you can afford it really varies greatly from company to company."

According to the report, 9.6 million uninsured people worked for or had a family member who worked for a company with 500 or more employees.

"That's about one of 11 workers and dependents at large firms, and even though that's a smaller percentage than the uninsured in small firms, it was a surprisingly large number," said study author Jeanne M. Lambrew, associate professor in the Dept. of Health Policy at George Washington University. The study tied the trend to declines in income, unionization and manufacturing jobs among low-wage workers.

A troubling trend

Although virtually all large firms offer health insurance, that doesn't mean they offer it to all workers. In a survey, 71% of uninsured workers at large companies said they did not have access to health insurance through their jobs. The survey also found that, when offered health benefits, workers tended to take them Lambrew said.

With more than 43 million Americans now without health insurance, it could be potentially disastrous for the country to continue seeing erosion in work-based coverage, said Charles Kolb, president of the Committee for Economic Development in New York.

Employer-sponsored insurance still has strong support, he said. Union workers consistently vote to forgo wage increases to preserve health benefits. "We all should be talking about [shoring] up the existing system and making sure that employers are not walking away from not only their responsibility, but something that is also in their best interest," Kolb said.

The trend is alarming, said James Rohack, MD, AMA chair-elect. It is one of the reasons the AMA prefers individual health insurance tax credits.

"The AMA has long advocated for a system of individually selected and owned health insurance where employers could contribute to their employees' health plan of choice," Dr. Rohack said. Lawmakers need to discuss tax credits or other assistance to help low-wage workers afford their share of rapidly rising insurance premiums, said Commonwealth Fund President Karen Davis.

ADDITIONAL INFORMATION:

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Income is a major determinant of insurance coverage even among people who work at large companies. Workers with low family incomes were the most likely to go without coverage.

Uninsured
all year Part of
the year Total

Less than 200% of poverty 18% 28% 46%

200% to 599% 5% 9% 14%

600% and above 3% 5% 8%

Source: Commonwealth Fund

Weblink

The Commonwealth Fund report, "The Growing Share of Uninsured Workers Employed by Large Firms," in pdf (www.cmwf.org/programs/insurance/glied_largefirms_672.pdf)