JOB-BASED HEALTH INSURANCE: Fewer Employees Can Afford It, UCLA Study Says
Although employer-based health insurance is more widely available than ever, fewer Americans are taking advantage of it because they can't afford the coverage, according to a new study by the UCLA School of Public Health and the accounting firm KPMG Peat Marwick. Lead study author Thomas Rice said his team's objective was to determine why 43 million people in the U.S. are not covered. "What we're doing here is getting inside the black box to understand why we have more and more uninsured people," he said. The study was funded by the Kaiser Family Foundation (Russell, San Francisco Chronicle, 6/17).
A Matter Of Cost
Looking at companies with more than 200 workers, the researchers found that the number of people purchasing health care through their employers dropped from 79% in 1989 to 70% in 1996. After analyzing the data, they concluded that the drop could not be attributed to employers dropping coverage. Instead, they found that the decline was a result of more employees electing not to buy the coverage they are offered. The primary reason for this trend, according to the study, is simply cost. Between 1989 and 1996, the average annual employee contribution for family HMO coverage soared from $935 to $1,778 -- a 90% increase (UCLA release, 6/16). The Chronicle notes that "health premiums far outstripped the growth in workers' ability to pay for them since wages during the same period rose only 23%" (6/17).
In addition to cost, the researchers cited the lack of options employees now have in choosing an employer-sponsored plan. Among small businesses, the percentage offering only an HMO option rose from 16% in 1993 to 36% in 1996. "People who have a choice of health care providers are more likely to purchase a plan," said Rice. Finally, workers are also less likely to purchase a plan because more employers now have restrictions on coverage -- items such as waiting periods and exclusions for pre-existing conditions.
Change Is Needed
"Our findings suggest that if we continue to rely on the nation's employers to provide the bulk of health insurance in the United States, the problem of a growing number of uninsured people is likely to become worse rather than better," said Rice. The research team suggests creating broad-based health care purchasing cooperatives which would allow small businesses and individuals to pool resources and access a broader array of options. Also, Rice suggested subsidies for lower-income families to offset the cost of health insurance (UCLA release, 6/16). The Chronicle notes that HMOs "contend that efforts to increase regulation of their industry are likely to drive up costs further." Maureen O'Haren, president of the California Association of Health Plans, said, "Is it really a good idea to impose mandates on health coverage when, as a result, fewer and fewer people can afford it?" (6/17).