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The Erosion of Employment-Based Insurance: More Working Families Left Uninsured

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Publication Date: November 2007

Publisher(s): Economic Policy Institute

Author(s): Elise Gould

Topic: Health (Health care financing)

Type: Brief

Abstract:

The decline in health insurance coverage continued unabated in 2006, driven primarily by the continued erosion in employer-provided health insurance. In 2006, 47 million Americans were uninsured, up nearly 8.6 million since 2000. The rate of those without insurance has grown 2.1 percentage points during this period, from 13.7% in 2000 to 15.8% in 2006.

Employment-based coverage is still the most prominent form of health insurance in the United States at 59.7% of all Americans; however, the rate of this coverage has fallen in every year since 2000. In 2000, 64.2% of Americans had employer-provided health insurance. By 2006, this percent had fallen 4.5 percentage points. Nearly 2.3 million fewer Americans had employment based insurance in 2006 than in 2000. This decline does not take into account population growth. As many as 13 million more people would have had employer-provided health insurance in 2006 if the coverage rate had remained at the 2000 level.

As with workers, the downward trend in employer-provided coverage for children (through their parents' employers) continued into 2006: 3.4 million fewer children had employment-based coverage in 2006 than in 2000. From 2000 to 2004, children were less likely to become uninsured as public-sector health coverage expanded. In 2005, that trend reversed and the number of uninsured children rose by 940,000 to over 8.6 million by 2006.

This is the second year in a row that the rate of uninsured children has increased. Given the erosion of employer-provided health insurance and rising costs of medical care, now is a critical time to consider health insurance reform.