Employer Based Economical Health Insurance on the Decline According to Report

The traditional source for economical health insurance or medical benefits in this country has been through employers. A recent report published by the Economic Policy Institute indicates that for the fifth straight year the number of individuals and families who rely on their employers as their supplier of economical health insurance has once again declined. The report found that Over 3 million fewer people of all ages had employer-provided health insurance in 2005 than in 2000. The report went on to say that the number of those without any insurance in 2005 was almost 46.6 million. That number represents an increase of close to 7 million since 2000 or up by 1.7% from 14.2% in 2000 to a rate of 15.9% in 2005.

The report also found that those that are suddenly finding themselves without insurance due to job loss, or companies eliminating or reducing economical health insurance for their employees cross all socio-economic lines. Even highly educated and upper tier wage earners showed significant increases in those without coverage since 2000. Clearly health insurance and the economy is an issue that concerns all Americans. Particularly alarming in the report is how this decline is effecting children. In recent years the numbers of uninsured child had been on the decline as a strong economy allowed for growth in public assistance and health coverage, however for the fist time in the last seven years the number of children without medical insurance rose. The traditional "safety net" health programs, Medicaid and the State Children's Health Insurance Program have come into play to help keep 100's of thousands of families with children covered when loss of medical insurance from an employer occurs. Unfortunately, medical inflation and state budget constraints continue to weaken these programs. While Medicaid and SCHIP still work for many, the numbers in the report clearly indicate that the government has not kept pace in its ability to provide economical health insurance for all who have lost coverage.

So why has this occurred? According to the Economic Policy Institute economical health insurance in this country has largely been based on an employer-provided model. It is a system whose basic principals are founded on successfully sharing risk among individuals. Right now we are in a time that combines a weakened labor market and tremendous increases in the costs of medical care and health insurance. During such times where labor is in a weakened bargaining position at the same time as spiraling health costs, employers may insist their workers pay to cover the larger premiums, or dip deeper into their own pockets for their own care. Under these economic conditions workers may lose their jobs or be forced to take jobs without benefits.

Economists agree now more than ever it is time to rethink a new model for economical health insurance. Experts in economic policy agree while there is no one single answer, there are several ideas being discussed that could increase entrée to less costly health care and economical health insurance. The report concludes "Clearly, there are many Americans who fall through the growing gulf between employer-provided coverage and government health programs. A universal system, one that provides a minimum standard of care to everyone, would provide Americans with access to the type of health care appropriate for the most prosperous nation in the world."