Fewer Americans get health insurance through job

Employer-sponsored coverage is growing more expensive and covering less.

From AMA-ASSN.org

Findings by the Commonwealth Fund and polling by Gallup show that fewer workers are getting health insurance, and those who have it are paying more for less.

Polling released in November by Gallup showed the smallest percentage of American adults covered by employer-sponsored health insurance since the polling organization began tracking health insurance in 2008. As of the third quarter of 2011, 44.5% of adults were covered at work. That’s down from 50% at the end of 2008.

Research by the Commonwealth Fund, a private foundation that advocates better health care access and quality, found that from 2003 to 2010, health insurance premiums rose by 50% on average, much faster than income. Not only did the total cost rise, but the portion employees pay rose by 63%. The research showed that the premiums bought less generous benefits, with deductibles nearly twice as high in 2010 as in 2003.

“These are workers with jobs, with coverage — during the same time, millions more lost their jobs,” said Cathy Schoen, co-author of the report.

According to Gallup, 17.3% of the people it polled in the third quarter of 2011 said they were uninsured, down slightly compared with the second quarter, when it hit 17.4%. That was the highest level reported since Gallup began tracking health insurance in 2008.

By comparison, the most recent U.S. Census data estimated that 16.3% of the population — 49.9 million Americans — was uninsured in 2010.

The reports are the latest in a series of studies in recent months establishing that patients are spending more money out-of-pocket to get health care — and, as a result, are spending as little as they can. Various studies have estimated that physician office visits have declined 8% to 17% in recent months.

The Commonwealth Fund study examined the years before the enactment of health system reform, leading to the question of whether reform can take health care costs in a different direction.

The report by the fund, a supporter of the Patient Protection and Affordable Care Act, examined the possible savings to families if the growth rate in premiums were to decrease by just 1%. That small drop would save an average family $2,161 by 2020. A 1.5% drop in the growth rate would save $3,173 during the same period.

Schoen and Commonwealth Fund President Karen Davis, PhD, said the health reform law could lower the growth in a few ways. One is that premium reviews by the Health and Human Services Dept. could make insurers more hesitant to raise prices without solid justification. HHS can’t invalidate premium hikes, but it can examine them.

Also, the Commonwealth Fund said, medical-loss-ratio minimums from 80% to 85% would mean that if insurers spend less than expected on care, they must return the excess to members. This is the first year the minimums must be applied. Coverage expansion in 2014 will eliminate some cost-shifting, which means the insured bear the cost of care for the uninsured, the fund said.

Health insurers have said the reform bill does little to control costs, which they say are driven not by their administrative costs or profits but by the underlying cost of care.

Speaking Nov. 15 at the Fall Forum hosted by the trade group America’s Health Insurance Plans, the group’s president and CEO, Karen Ignagni, said the scrutiny and transparency required under the health reform law could help insurers make their case that the underlying cost of care drives premiums higher.

Too often, she said, health care costs are equated with premiums, and government efforts to control costs stop with barring insurers from raising premiums.

She and others in the industry say elements of the reform law are likely to raise premiums. A few weeks before the Fall Forum, AHIP released research it had commissioned projecting that insurers would need to raise premiums by as much as 3.7% to cover the health insurance industry fee (AHIP calls it a “premium tax”) that takes effect in 2014 under the reform law.

But Davis said she doubts insurers actually will increase the cost of coverage for those reasons. The coverage expansions that already have kicked in — making adult children eligible for coverage under their parents’ policies until age 26, for example — have raised costs much more modestly than government actuaries predicted.

“When you look at large insurers, there is plenty of room for absorbing [cost],” she said. “We could see a much more efficient insurance market in the future.”