Declining Job-Based Health Coverage for Working Families in California and the United States

In the second half of the twentieth century the American system of health care delivery emerged as a dual system of private, employer-sponsored health care for most people, supplemented by public health care for the poor and elderly. Today, rising health insurance premiums, shifting industrial composition and increased use of temporary and part-time workers are leading to a marked shift in the nature of health care coverage for American workers.

This study analyzes how health insurance coverage responded to rising premium costs between 2000 and 2004.We first report coverage trends for individuals and families in different income levels and demographic categories. We then create a statistical model to predict the impact of a given rise in premiums on employer-based coverage, the uninsurance rate and public coverage in the United States. We use data on premium prices over the past five years along with household data to estimate how different types of coverage respond to increases in premium prices for a variety of family types. Finally, using this model we predict the effect of an increase in premiums on employerbased coverage, the uninsurance rate, private coverage and public coverage in the United States and California over the next six years.

The study projects a continued decline in employer-based coverage with the greatest concentration among lower-and-middle income families. This will largely translate into increased uninsurance for adults, and greater take-up of public coverage for children.