EMPLOYER-SPONSORED COVERAGE: AFL-CIO Finds Decline
"About a million Americans a year are losing their health insurance primarily because employers are increasingly shifting the cost of coverage to workers who can't afford it," according to a new study commissioned by the AFL-CIO. The study found that "about eight million fewer adults and children had employer-based insurance in 1996 than in 1989." Of those who lost employer-based coverage, approximately "48% were workers and 52% were the spouses and children of workers," USA Today reports. Researchers from the Lewin Group, which conducted the study, found that "[t]hree-quarters of the drop resulted from the rising premium contributions required of employees." The remainder of the drop was due to "wage levels and a shift in jobs to service industries" (Findlay, 2/20).
By The Numbers
The study found that the average premium paid by workers for family coverage increased 146% between 1988 and 1996, compared to 111% for total premium increases. As a result, the typical worker pays $1,615 annually in premiums for family coverage today compared to $658 in 1988. AFL-CIO President John Sweeney said, "I hear story after story from workers who had to drop their family coverage because they were paying more for health coverage than for any other expense, including rent or groceries or clothes for their kids" (AFL-CIO release, 2/19). "The study indicates that most who can't afford, or opt not to buy, health insurance work for small and mid-size firms that are increasingly asking workers to pay 50% or 100% of dependent coverage," USA Today reports. The study predicts that "[i]f the trend continues ... up to 12.5 million more people will lose employer-based health coverage by 2002" (2/20). Sweeney said, "The trend of declining employer-based health coverage has occurred despite a strong economy and a moderation in health costs." He added, "While universal coverage is the best option, requiring employers to provide health coverage for workers and their families would be a good start to strengthen the faltering system" (AFL-CIO release, 2/19).
Not So Fast
The National Association of Manufacturers was quick to dispute the AFL-CIO's call for government intervention. NAM health care lobbyist Julie Cantor-Weinberg said, "Government mandated health care is a short-sighted recipe for disaster. The evidence is clear that mandated benefits are part of our nation's health care problems, not the solution. Forward-looking employers know that the way to attract and retain the best and brightest employees for the 21st century workplace is by working together to design a custom benefits package that satisfies individual needs." She continued, "What we really need are innovative, free-market approaches that will make health care more affordable and accessible, such as allowing small businesses to band together to purchase health policies for their employees. Market-based reforms work. Mandates do not" (NAM release, 2/19).