Fewer small companies offer health insurance

Between 1999 and 2011, health insurance coverage doubled in cost, and a growing share of the nation’s workers no longer could obtain it from their employers. The lack of health coverage is particularly acute at the nation’s small employers and among those who earn lower wages.

Those trends and more are outlined in a new report released by the nonpartisan Robert Wood Johnson Foundation, a philanthropic group focused on health care issues. The full text of the 78-page document, including state-by-state data, was set to be made available today at www.rwjf.org/coverage.

With Americans standing at the threshold of federal health care reform, the report is intended, the authors say, to “establish a baseline” for future analysis of the federal law’s results. The law does not take full effect until next year.

Nationwide, the report says, the average annual employee-only health insurance premium rose from $2,490 in 1999 to $5,081 in 2011. For family coverage, the premium rose from $6,415 to $14,447.

Meanwhile, the share of nonelderly Americans with no health insurance rose during the decade, to 17.8 percent from 14.7 percent.

Among the hardest hit, according to the report, are those who work at companies with fewer than 50 employees. In Washington state, only 37 percent of small companies offered health insurance to employees by 2011 – a drop of 10.5 percentage points from 1999. In Idaho, only 28 percent of small businesses offered health coverage to their workers in 2011.

At companies with 50 or more workers, the picture nationwide and in both Idaho and Washington was brighter: 96 percent of employers offered health coverage to their workers in 2011, virtually unchanged from 1999.

Employee income had a greater effect on the availability of health care than size of employer did. Nationwide, among workers below 200 percent of federal poverty level, 39 percent had employer-sponsored insurance coverage in 1999; by 2011, only 29 percent had coverage. In 2011, 200 percent of poverty level equated to an income of $44,700 per year for a family of four.

At all income levels, 70 percent of Americans had employer-sponsored coverage in 1999, but by 2011, 60 percent had coverage.

The first results from federal health care reform, the report said, showed up among 19- to 25-year-olds. In 1999, 30.7 percent had coverage as a dependent; by 2011, 36.5 percent had coverage under a parent’s employer-sponsored coverage. In 2010, the federal reform law allowed young adults to remain on their parents’ policies until age 26.

Aside from that bright spot for young adults, the downward trend in insurance coverage appears to set the stage for federal reform. On Oct. 1, Americans who lack health insurance will be able to shop for plans from competing private insurance companies on government-run websites, one site for each state. Coverage purchased on these sites will be effective Jan. 1.

In states that decide to accept federal funds, such as Washington, people with incomes up to 138 percent of the federal poverty level will be able to obtain Medicaid coverage, paid for by the government.

Between incomes of 138 percent and 400 percent of poverty level ($94,200 for a family of four), families can go to the websites and purchase health coverage with costs reduced by federal subsidies.

Small businesses, a target of the federal reform law, will be able to set up an account on the insurance buying websites. That move will enable their employees to buy group health insurance coverage, obtaining federal subsidies to reduce the cost if their income is less than 400 percent of the poverty level.

Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation, pointed with concern to the study’s findings: “Higher costs naturally translate into fewer employers offering insurance coverage, and fewer employees accepting it, even when it is offered. That is why it is so important that people have options for purchasing affordable health insurance that meets their needs.”