Job-based health plans declining

AURELIO ROJAS
Saturday, February 12, 2005


What was once a social compact—work, and chances were you would get health insurance through your employer—is fraying as medical costs soar, according to a new study. The UCLA Center For Health Policy Research, which provides lawmakers with data to formulate policy, found that in 2003, only about half (53.8%) of non-elderly Californians were covered throughout the year by insurance from their employer.

That represents a drop of 2.6% between 2001 and 2003. “Three-quarters of all of the uninsured in the state are in families that work,” E Richard Brown, director of the center, said. “About 60% are in families headed by someone who works full time,” he added.

As health costs rise, a growing number of policy-makers—including President Bush—are promoting personal responsibility as an alternative to the job-based system that covered most working Americans for the past half-century.

In California, Assemblymen Keith Richman, R-Northridge, and Joe Nation, D-San Rafael, plan to introduce legislation that would require all Californians to have healthcare. The state would subsidise low-income workers.

More than 6.5 million people in the state were without insurance at some point in 2003, including nearly one million children, according to the UCLA study. The percentage of uninsured adults increased slightly from 2001. But the overall rate remained flat as enrollment of children surged in the state’s Medi-Cal and Healthy Families programs.

Mr Brown said the overwhelming majority of the uninsured live in families whose low income puts health insurance out of financial reach.

“For workers who are trying to buy family coverage through their employer, the average increase in the share of the cost they have to pay rose 79% between 2001 and 2003,” Mr Brown said. “That’s huge.”

Anthony Wright, spokesman for Health Access California, a coalition of consumer and labour groups, said the move away from employer-based health insurance has been gradual. “It’s very rare that a business says, ‘You have health care coverage this month, but we’re going to drop it next month,”’ he said. “What’s more likely is that for new hires, they change the rules. The Southern California grocery strike is a classic example.”

In October 2003, 59,000 union members went on strike or were locked out. When a settlement was reached four- and -a-half months later, they retained their health benefits.

But new hires now have to wait more than a year before qualifying for coverage. The trend, repeated in other industries, has put a strain on state programs.

“The reason the costs of Medi-Cal and Healthy Families are increasing is because more people are getting on them,” Mr Wright said. “What happens when the state begins cutting costs?”

Hospitals are bearing an added burden as emergency rooms turn into primary care providers of last resort. Because of uncompensated care, a growing number of hospitals have shuttered their emergency units.

Sen. Sheila Kuehl, D-Santa Monica, has introduced a “single-payer” universal healthcare plan designed to reduce administrative costs by squeezing out insurance companies. State Senate President Pro Tem Don Perata, D-Oakland, supports her bill.

Assembly Speaker Fabian Nunez, D-Los Angeles, said he will soon announce his support for a proposal. But he believes many employers are shirking their responsibilities.‘‘They ought to be ponying up and paying a bigger share of the premiums, and we need to contain healthcare costs,” he said. “Because if we don’t contain healthcare costs, the premiums are going to continue to rise.”

Gov. Arnold Schwarzenegger, however, has indicated he may be receptive to requiring individuals to have health insurance to address the issue of the uninsured. President Bush’s “ownership society” also calls for shifting the nation from an employer-based insurance system. Workers would buy higher-deductible catastrophic insurance policies to cover major medical needs.