Employer-Sponsored Health Insurance Erosion Continues

Pennsylvania has outstripped every state in the nation except Michigan in the loss of employment-based health insurance coverage over the course of the decade, according to a new report analyzing U.S. Census Bureau data.

In 2007 and 2008, 694,471 fewer Pennsylvanians were insured by an employer policy than in 2000-01.  The nation as a whole also saw a dramatic decline in coverage, with 17 million fewer Americans insured by an employer policy in 2008 than at the start of the decade.

The report, authored by the Washington, D.C.-based Economic Policy Institute, analyzed U.S. Census Bureau data from 2000 to 2008.  State-level data are averaged over two years to reduce sampling error.

Overall, Pennsylvania has a higher rate of employment-based coverage than the national average, ranking 10th among the 50 states and Washington, D.C. in employer coverage rates in 2007-08. The steep decline of employment-based coverage, however, is a big concern for the Commonwealth.  The report identifies the skyrocketing cost of health care as a major cause of this decline in Pennsylvania and nationally.  As costs increase, employers are less likely to offer insurance coverage to workers and their families.  Given the state of the economy, millions more Americans are expected to lose employer coverage over the next two years, which is likely to further strain public programs.

Over the course of the decade, Pennsylvania already has seen an increase in the share of the population receiving health coverage through public programs.  Since 2000-01, that share has grown from 10% to 14.3% of the population.  As is the case nationally, increased enrollment in Medicaid and SCHIP in Pennsylvania has compensated for a loss of employment-based coverage for kids.  That explains how the rate and number of uninsured children has remained steady in Pennsylvania over the course of the decade, despite a decline of more than 200,000 children covered by employment-based health insurance.

CLICK HERE to access a fact sheet detailing the key findings of the report.

CLICK HERE to view the full report from the Economic Policy Institute.