Sources of health insurance and characteristics of the uninsured: analysis of the March 1999 Current Population Survey

This Issue Brief provides summary data on the insured and uninsured populations in the nation and in each state. It discusses the characteristics most closely related to an individual's health insurance status. Based on EBRI estimates from the March 1999 Current Population Survey (CPS), it represents 1998 data--the most recent data available. In 1998, 194.7 million nonelderly Americans--81.6 percent--had some form of health insurance. More than 64 percent had it through an employment-based health plan; 6.5 percent purchased it on their own; and 14.3 percent were covered by a public program, mostly through Medicaid (10.4 percent). In 1998, 18.4 percent of the nonelderly population was uninsured (43.9 million people), compared with 14.8 percent in 1987. The percentage of uninsured Americans has generally been increasing since at least 1987, although the percentage uninsured in 1998 was not statistically different from the percentage uninsured in 1997 (18.3 percent). The increase in the uninsured prior to 1993 can be attributed to the erosion of employment-based health insurance. However, since 1993, the percentage of nonelderly Americans covered by an employment-based health plan has increased from 63.5 percent to 64.9 percent. The decline in public sources of health insurance would mostly explain the recent increase in the uninsured. For example, between 1994 and 1998 the percentage of nonelderly Americans covered by CHAMPUS/CHAMPVA declined from 3.8 percent to 2.9 percent, in large part due to downsizing in the military. Similarly, between 1993 and 1998, the percentage of nonelderly Americans covered by Medicaid declined from 12.7 percent to 10.4 percent as people left welfare. The increase in employment-based coverage since 1994 was due mainly to a higher likelihood that children were covered by an employment-based health plan. Between 1994 and 1998, the percentage of children covered by an employment-based health plan increased from 58.1 percent to 60.2 percent. For adults, it increased less than one percentage point, from 66.1 percent to 66.9 percent. Adults started to realize gains in employment-based health insurance between 1997 and 1998. Between 1994 and 1997, the percentage of working adults with employment-based health insurance coverage held steady at roughly 72.3 percent. During this period, health care cost inflation was essentially nonexistent. However, between 1997 and 1998, the percentage of working adults with employment-based health insurance increased from 72.2 percent to 72.8 percent, despite the apparent return of health care cost inflation in 1998. It is likely that the changing composition of the labor force accounted for some of the increase in employment-based coverage.     

Sources of health insurance and characteristics of the uninsured. Analysis of the March 1993 Current Population Survey

This Issue Brief/Special Report examines the extent of health insurance coverage in the United States, the characteristics of the uninsured population by employment status, firm size, industry, income, location, family type, gender and age, race and origin, and education, as well as how the uninsured population has changed over the last several years. Eighty-three percent of nonelderly Americans and 99 percent of elderly Americans (aged 65 and over) were covered by either public or private health insurance in 1992, according to EBRI tabulations of the March 1993 Current Population Survey (CPS). The March 1993 CPS is the most recent data available on the number and characteristics of uninsured Americans. In 1992, 17.$ percent of the nonelderly population--or 38.5 million people--were not covered by private health insurance and did not receive publicly financed health assistance. This compares with 36.3 million in 1991 (16.6 percent), 35.7 million in 1990 (16.5 percent), 34.4 million in 1989 (16.1 percent, and 33.6 million in 1988 (15.9 percent). The most important determinant of health insurance coverage is employment. Nearly two-thirds of the nonelderly (62.5 percent) have employment-based coverage. Workers were much more likely to be covered by employment-based health plans than nonworkers (71 percent, compared with 40 percent). A primary reason for the increase in the number of uninsured between 1991 and 1992 is a decline in employment-based coverage among individuals (and their families) working for small firms. Forty-two percent of the additional 2.2 million individuals without coverage between 1991 and 1992 were in families in which the family head worked for an employer with fewer than 25 employees. The number of children who were uninsured in 1992 was 9.8 million, or 14.8 percent of all children. This compares with 9.5 million and 14.7 percent in 1991. The increase in the number and proportion of uninsured children was partially offset by an increase in the proportion of children with Medicaid. In 12 states and the District of Columbia, more than 20 percent of the population was uninsured in 1992 (table 3). These states and their uninsured rates were Nevada (26.6 percent), Oklahoma (25.8 percent), Louisiana (25.7 percent), Texas (25.7 percent), the District of Columbia (25.5 percent), Florida (24.2 percent), Arkansas (23.5 percent), California (22.2 percent), South Carolina (20.8 percent) and Alabama (20.1 percent).     

Sources of health insurance and characteristics of the uninsured: analysis of the March 1994 Current Population Survey

This Issue Brief provides summary data on the insured and uninsured populations in the nation and in each state and is based on EBRI analysis of the March 1994 supplement to the Current Population Survey (CPS). It discusses the way health protection has changed for the insured, how the states rank in health insurance protection, and the characteristics most closely related to whether or not an individual is likely to have health insurance protection. The March 1994 CPS represents 1993 data--the most recent data available. Forty-three percent of nonelderly respondents indicating they were noncitizens were uninsured in 1993, compared with 16.4 percent of citizens. Among all nonelderly uninsured, 15.1 percent were noncitizens. In six states a higher proportion of the total uninsured were noncitizens than in the nation as a whole. These states include California (37.8 percent), New York (26.6 percent), Florida (21.7 percent), New Jersey (20.8 percent), Illinois (19.9 percent), and Texas (17.8 percent). The CPS contained data regarding citizenship for the first time in its March 1994 survey and does not allow for the determination of legal status of noncitizens. Eighty-two percent of nonelderly Americans and 99 percent of elderly Americans (aged 65 and over)--or 215.7 million individuals--were covered by either public or private health insurance in 1993. In 1993, 18.1 percent of the nonelderly population--or 40.9 million people--were not covered by health insurance, up from 17.8 percent and 39.8 million in 1992. However, the margin of error in 1993 at the 95 percent confidence level is 0.4 percent and 765 thousand. Thus, the percentage of uninsured in 1993 ranged from 17.7 percent to 18.5 percent, and the number of uninsured ranged from 40.1 million to 41.7 million. Children accounted for the largest proportion of the increase in the number of uninsured between 1992 and 1993. Sixteen percent of all children--or 11.1 million children--were not covered by private health insurance and were either ineligible or did not receive publicly financed medical assistance in 1993, up from 15.1 percent and 10.2 million in 1992.     

Sources of health insurance and characteristics of the uninsured: analysis of the March 2001 Current Population Survey

This Issue Brief provides summary data on the insured and uninsured populations in the nation and in each state. It discusses the characteristics most closely related to an individual's health insurance status. Based on EBRI estimates from the March 2001 Current Population Survey (CPS), it represents 2000 data--the most recent available. Between 1999 and 2000, the percentage of Americans with health insurance increased: 84.1 percent of nonelderly Americans were covered by some form of health insurance in 2000, up from 83.8 percent in 1999. The percentage of nonelderly Americans without health insurance coverage declined from 16.2 percent in 1999 to 15.9 percent in 2000, continuing a trend that started between 1998 and 1999. The main reason for the decline in the number of uninsured Americans was the strong economy and low unemployment. Between 1999 and 2000, the percentage of nonelderly Americans covered by employment-based health insurance increased from 66.6 percent to 67.3 percent, continuing a longer-term trend that started between 1993 and 1994. In 2000, 34.3 million Americans received health insurance from public programs, and an additional 16.1 million purchased it directly from an insurer. More than 25 million Americans participated in Medicaid or the State Children's Health Insurance Program, and 6.1 million received their health insurance through the Tricare and CHAMPVA programs and other government programs designed to provide coverage for retired military members and their families. Even though the number and percentage of uninsured declined substantially between 1998 and 2000, more than 38 million Americans remain uninsured. While an increasing percentage of Americans were being covered by employment-based health plans, this trend may not continue because of the combined re-emergence of health care cost inflation and the weak economy. As long as the economy is strong and unemployment is low, employment-based health insurance coverage will expand and the uninsured will decline gradually. However, the combination of the current weak economy and the rising cost of providing health benefits will likely result in more Americans without health insurance coverage. Should the uninsured remain unchanged and continue to represent 15.9 percent of the nonelderly population, 40 million would be uninsured by 2005. If the uninsured represented 25 percent of the population, 63 million would be uninsured in 2005 and 65 million nonelderly Americans would be uninsured by 2010.     

Sources of health insurance and characteristics of the uninsured: analysis of the March 1997 Current Population Survey

This Issue Brief provides summary data on the insured and uninsured populations in the nation and in each state. It discusses the characteristics most closely related to individuals' health insurance status. Based on EBRI analysis of the March 1997 Current Population Survey, it represents 1996 data--the most recent data available. In 1996, 82.3 percent of nonelderly (under age 65) Americans had private or public health insurance. Seventy-one percent had private insurance, 64 percent through an employment-based plan. Sixteen percent had public health insurance. The percentage of uninsured Americans has been increasing since at least 1987. In 1987, 14.8 percent of the nonelderly population was uninsured, compared with 17.7 percent in 1996. However, the erosion of employment-based health benefits cannot fully explain this increase since 1993. Instead, the decline in public sources of health insurance would partly explain it. It may be that, while the percentage of individuals with employment-based coverage is rising, individuals previously covered by Medicaid and CHAMPUS/CHAMPVA are not being fully absorbed into the employment-based health insurance market. Between 1995 and 1996, the percentage of nonelderly Americans without health insurance coverage increased from 17.4 percent to 17.7 percent. Further examination indicates that children completely accounted for this increase. In 1995, 13.8 percent of children and 19 percent of persons ages 18-64 were uninsured, compared with 14.8 percent of children and 18.9 percent of persons ages 18-64 in 1996. With the recent passage of legislation designed to reduce the number of uninsured children, the next focal point for health care reform could be early retirees and unemployed persons. President Clinton and some members of Congress have expressed an interest in improving access to and affordability of coverage for these groups. Currently, health care cost inflation is at its lowest point in years, but there are signals indicating that it is about to rise above current levels. The federal government's recent announcement that health insurance premiums will rise for federal employees an average of 8.5 percent in 1998 may portend higher future health care costs. Similarly, disappointing earnings announcements from several large insurers because of higher medical costs and lower-than-expected revenues may indicate that health insurance plans will increase premiums. Employment and income play a dominant role in determining an individual's likelihood of having health insurance. Age, gender, firm size, work hours, and industry are also important determinants; however, these variables are also closely linked to employment status and income. Some of the widest variations involve factors that are not always looked at in traditional demographic assessments, such as citizenship. However, variations by race, ethnicity, and citizenship are also closely linked to employment status and income.     

Trends in health insurance coverage

This Issue Brief presents data on trends in health insurance coverage between 1987-1995. In 1995, 70.7 percent of the nonelderly population had private health insurance coverage, compared with 75.9 percent in 1987. During this period, the percentage of the nonelderly population with employment-based health insurance declined from 69.2 percent to 63.8 percent, while the percentage covered by Medicaid program increased from 8.6 percent to 12.5 percent. The percentage of the nonelderly population without any form of health insurance increased from 14.8 percent in 1987 to 17.4 percent, or 40.3 million individuals, in 1995. The percentage of nonelderly Americans with employment-based coverage fell for both individuals with coverage in their own name and those with coverage as dependents. In 1995, 32.7 percent of the nonelderly population had coverage in their own name, compared with 33.8 percent in 1987. Similarly, 31.1 percent of the nonelderly population had employment-based health insurance as dependents in 1995, compared with 35.4 percent in 1987. One of the most important determinants of health insurance coverage is work status and hours of work. While employment-based health insurance received directly from worker's employer decreased between 1987 and 1995 from 66.2 percent of 63.2 percent among full-time workers, the percentage of part-time workers with employment-based health insurance coverage in their own name increased from 17.2 percent to 20.1 percent. The percentage of workers with dependent coverage fell for both full-time and part-time workers, as did the percentage of nonworkers with dependent coverage. Workers in the manufacturing industry are most likely to have employment-based health insurance; they are also the workers most likely to have experienced a decrease in employment-based coverage between 1987 and 1995. In contrast, workers employed in most of the service sectors, experienced an increase in employment-based health insurance, self-employed workers experienced a decrease, and government workers experienced a slight increase. Cost is one of the primary factors contributing to the decline in employment-based health insurance coverage. While health insurance premium cost increases have slowed during the past three years, many health care analysts are predicting an increase in health insurance premiums during the next few years. Inflationary pressure may come from health care providers, health insurers, consumers, and/or policymakers. If inflationary pressure increases health insurance premiums, we are likely to see a continued decline in employment-based health insurance and a subsequent increase in both Medicaid and uninsured populations.     

Questions and answers on employee benefit issues

This Issue Brief addresses 19 topics in the areas of pensions, health insurance, and other benefits. In addition to the topics listed below, the report includes data on the prevalence of benefits, tax incentives associated with benefits, lump-sum distributions, number of private pension plans, pension coverage rates, 401(k) plans, employer spending on group health insurance, self-insured health plans, employer initiatives to reduce health care costs, and employers' response to the retiree health benefits accounting rule, and flexible benefits plans. In 1992, U.S. employers (public and private) spent $629 billion for noncash benefits, representing nearly 18 percent of total compensation, excluding paid time off. In 1992, 71 percent of the 50.1 million individuals aged 55 and over received retirement benefits, including distributions from private and public pensions, annuities, individual retirement accounts, Keoghs, 401(k)s, and Social Security. Among the 76 percent of all private pension plan participants who participated in a single plan, 30 percent named a defined benefit plan as their pension plan type, 58 percent named a defined contribution plan as their pension plan type, and 12 percent did not know their plan type. Private and public pension funds held more than $4.6 trillion in assets at the end of 1993. The 1993 year-end assets are more than triple the asset level of 1983 (nominal terms). According to the Congressional Budget Office, U.S. expenditures on health care were expected to have reached $898 billion in 1993, up from $751.8 billion in 1991, an increase of 19.4 percent in nominal terms.     

Sources of health insurance and characteristics of the uninsured: analysis of the March 2000 Current Population Survey

This Issue Brief provides summary data on the insured and uninsured populations in the nation and in each state. It discusses the characteristics most closely related to an individual's health insurance status. Based on EBRI estimates from the March 2000 Current Population Survey (CPS), it represents 1999 data--the most recent available. In 1999, for the first time since at least 1987, the percentage of Americans with health insurance increased: 82.5 percent of nonelderly Americans (under age 65) were covered by some form of health insurance, up from 81.6 percent in 1998. The percentage of nonelderly Americans without health insurance coverage declined from 18.4 percent in 1998 to 17.5 percent in 1999. The main reason for the decline in the number of uninsured Americans is the strong economy and low unemployment. Between 1998 and 1999, the percentage of nonelderly Americans covered by employment-based health insurance increased from 64.9 percent to 65.8 percent, continuing a longer-term trend that started between 1993 and 1994. In 1999, 34.1 million Americans received health insurance from public programs, and an additional 15.8 million purchased it directly from an insurer. Twenty-five million Americans participated in the Medicaid program, and 6.5 million received their health insurance through the Tricare and CHAMPVA programs and other government programs designed to provide coverage for retired military members and their families. Despite expansions in the State Children's Health Insurance Program (S-CHIP), public health insurance coverage did not increase overall between 1998 and 1999. The percentage of nonelderly Americans covered by Medicaid and other government-sponsored health insurance coverage did not change between 1998 and 1999, though some children benefited from expansions in government-funded programs. The percentage of children in families just above the poverty level without health insurance coverage declined dramatically, from 27.2 percent uninsured in 1998 to 19.7 percent uninsured in 1999. Some of the decline can be attributed to expansions in Medicaid and S-CHIP, but it appears that expansions in employment-based health insurance and individually purchased coverage had an even larger effect than expansion of S-CHIP. Even though the number and percentage of uninsured declined substantially between 1998 and 1999, more than 42 million Americans remain uninsured. As long as the economy is strong and unemployment is low, employment-based health insurance coverage will expand and the uninsured will decline gradually. If the economy continues to soften or comes close to a recession, the number of uninsured would easily and quickly start to increase again as unemployment rises. Should a severe downturn in the economy occur, causing the uninsured to represent 25 percent of the nonelderly population, 63 million Americans would be uninsured.     

Employment-based health benefits: analysis of the April 1993 Current Population Survey

The April 1993 CPS differs from the March 1993 CPS in a number of respects. The April 1993 CPS supplement surveys only workers, whereas the March CPS examines the noncash benefits received by all Americans. The April CPS asks workers about health coverage in the week in which the questions were fielded, whereas the March CPS asks about coverage in the preceding year. In April 1993, there were 112.5 million civilian American workers between the ages of 18 and 64 with jobs. Eighty-two million (73 percent) of them worked for an employer that sponsored a health insurance plan, and 65 million (58 percent of all workers) participated in their employer's health plan. About one-third of workers at firms with fewer than 10 employees had employers who offer health benefits; about one-quarter of all of the workers in these firms participated in their employer's plan. Conversely, 94 percent of workers at firms with more than 1,000 employees had an employer who sponsored health benefits, and over 77 percent of these workers participated in their employer's plan. There are 16.5 million American workers whose employers sponsored health benefits but who did not participate in these benefits. Over one-half of these workers (8.5 million) chose not to be covered. Another 36 percent of these workers (5.9 million) did not participate because they were ineligible or denied coverage. Over 66 percent of the ineligible workers did not participate because they were part-time, contract, or temporary workers. Another 26 percent had not yet completed a probationary period. Among the reasons that those who chose not to participate in their employer's coverage, the vast majority (75 percent) stated they were covered by another health care plan. Twenty-nine percent stated that they chose not to purchase coverage because it was too costly or that they did not need or want the coverage. In 1993, there were 16.7 million workers with no health insurance coverage. The vast majority of these workers (95 percent) were employed by private employers. Sixty-six percent of the workers with no health insurance coverage were self-employed or worked for firms with fewer than 100 employees.     

Sources of health insurance and characteristics of the uninsured. Analysis of the March 1992 Current Population Survey

Eighty-three percent of nonelderly Americans and 99 percent of elderly Americans (aged 65 and over) were covered by either public or private health insurance in 1991, according to EBRI tabulations of the March 1992 Current Population Survey (CPS). The March 1992 CPS is the most recent data available on the number and characteristics of uninsured Americans. In 1991, 16.6 percent of the nonelderly population--or 36.3 million people--were not covered by private health insurance and did not receive publicly financed health assistance. This number compares with 35.7 million in 1990 (16.6 percent), 34.4 million in 1989 (16.1 percent), and 33.6 million in 1988 (15.9 percent). The most important determinant of health insurance is employment. Nearly two-thirds (64 percent) of the nonelderly have employment-based coverage. Workers were much more likely to be covered by group health plans than nonworkers (71 percent versus 40 percent). Even though workers and members of their families were more likely to be covered by health insurance than nonworkers, 85 percent of the uninsured lived in families headed by workers in 1991, primarily because most people lived in families headed by workers. More than 60 percent of uninsured were in families headed by full-year workers with no unemployment. Nearly all persons who were covered by an employment based-plan received at least some contribution to that plan from their employer. The estimated average annual contribution among those receiving a contribution to employee or family plans was $2,129. Although many individuals in poor families are covered by public health plans, that coverage is far from universal. In 1991, only 52 percent of the nonelderly with income below the poverty line were covered by a public plan--49 percent by Medicaid. The number of children who were uninsured in 1991 was 9.5 million, or 14.7 percent of all children, compared with 9.8 million or 15.3 percent of all children in 1990. Twenty-three percent of children were covered by public health insurance, with 21 percent being covered by Medicaid. In 11 states and the District of Columbia, more than 20 percent of the population was uninsured in 1991. These states and their uninsured rates were the District of Columbia (30.3 percent), Texas (25.3 percent), New Mexico (24.5 percent), Louisiana (23.8 percent), Florida (23.5 percent), Mississippi (22.1 percent), Oklahoma (22.1 percent), Nevada (21.8 percent), California (21.7 percent),Arizona (21.1 percent), Alabama (20.6 percent), and Idaho (20.6 percent).     

Sources of health insurance and characteristics of the uninsured: analysis of the March 2007 Current Population Survey

This Issue Brief provides historic data through 2006 on the number and percentage of nonelderly individuals with and without health insurance. Based on EBRI estimates from the U.S. Census Bureau's March 2007 Current Population Survey (CPS), it reflects 2006 data. It also discusses trends in coverage for the 1994-2006 period and highlights characteristics that typically indicate whether an individual is insured. HEALTH COVERAGE CONTINUES DECLINE: The percentage of the nonelderly population (under age 65) with health insurance coverage continued to decline, reaching to a post-1994 low of 82.1 percent in 2006. Declines in health insurance coverage have been recorded in all but four years since 1994, when 36.5 million nonelderly individuals were uninsured; in 2006, the uninsured population was 46.5 million. EMPLOYMENT-BASED COVERAGE REMAINS DOMINANT SOURCE OF HEALTH COVERAGE: Employment-based health benefits remain by far the most common form of health coverage in the United States, consistently covering 60-70 percent of nonelderly individuals. In 2006, 62.2 percent of the nonelderly population had employment-based health benefits, as compared with 64.4 percent in 1994. Between 1994 and 2000, the percentage of the nonelderly population with employment-based coverage expanded. Since 2000, the percentage has declined. PUBLIC PROGRAM COVERAGE IS STABLE: Public-sector health coverage was slightly lower as a percentage of the population in 2006, accounting for 17.5 percent of the nonelderly population. The decline was due to a drop in the percentage of the population covered by the Tricare/CHAMPVA program. Enrollment in Medicaid and the State Children's Health Insurance Program increased, reaching 34.9 million in 2006, and covering 13.4 percent of the nonelderly population, which is significantly above the 10.5 percent level of 1999, but not far above the 12.7 percent level of 1994. INDIVIDUAL COVERAGE STABLE: Individually purchased health coverage was unchanged in 2006 and has basically hovered in the high 6 and low 7 percent range since 1994. PRIVATE- VS. PUBLIC-COVERAGE TRENDS REVERSING: Health insurance coverage generally has not sustained unbroken trends since 1994. There were crosscurrents: Employment-based coverage expanded significantly in the 1994-2000 period to exceed the growth in public programs. Subsequently, the dynamic reversed, as public programs expanded while employment-based coverage declined. It appears that 2005 might be the beginning of a new trend, where the erosion in employment-based coverage is not being offset by expansions in public programs. This may be due to the fact that, while unemployment is relatively low, the cost of providing health benefits continues to increase faster than inflation.     

Expanding health insurance for children: examining the alternatives

This Issue Brief examines the issue of uninsured children. The budget reconciliation legislation currently under congressional consideration earmarks $16 billion for new initiatives to provide health insurance coverage to approximately 5 million of the 10 million uninsured children during the next five years. Proposals to expand coverage among children include the use of tax credits, subsidies, vouchers, Medicaid program expansion, and expansion of state programs. However, these proposals do not address the decline in employment-based health insurance coverage--the underlying cause of the lack of coverage, to the extent that a cause can be identified. What is worse, some proposals to expand health insurance among children may discourage employers from offering coverage. Between 1987 and 1995, the percentage of children with employment-based health insurance declined from 66.7 percent to 58.6 percent. Despite this trend, the percentage of children without any form of health insurance coverage barely increased. In 1987, 13.1 percent were uninsured, compared with 13.8 percent in 1995. Medicaid program expansions helped to alleviate the effects of the decline in employment-based health insurance coverage among children and the potential increase in the number of uninsured children. Between 1987 and 1995, the percentage of children enrolled in the Medicaid program increased from 15.5 percent to 23.2 percent. Some questions to consider in assessing approaches to improving children's health insurance coverage include the following: If the government intervenes, should it do so through a compulsory mechanism or a voluntary system? Is the employment-based system "worth saving" for children? In other words, are the market interventions necessary to keep this system functioning for children too regulatory, too intrusive, and too cumbersome to be practical? In addition to reforming the employment-based system, what reforms are necessary in order to reach those families who have no coverage through the work place? Which approaches are both efficient and politically acceptable? Employment-based coverage of children will likely continue. The challenge for lawmakers is to find a way to cover more uninsured children without eroding employment-based coverage. Several current legislative proposals attempt to avoid this problem by excluding children who have access to employment-based coverage. Without such a requirement, the opportunity to purchase coverage at a discount would create incentives for some low-income employees to drop dependent/family coverage, which in turn could lead some employers to drop their health plans.     

Sources of health insurance and characteristics of the uninsured: analysis of the March 2011 current population survey

LATEST CENSUS DATA: This Issue Brief provides historical data through 2010 on the number and percentage of nonelderly individuals with and without health insurance. Based on EBRI estimates from the U.S. Census Bureau's March 2011 Current Population Survey (CPS), it reflects 2010 data. It also discusses trends in coverage for the 1994-2010 period and highlights characteristics that typically indicate whether an individual is insured. HEALTH COVERAGE RATE CONTINUES TO DECREASE, UNINSURED INCREASE: The percentage of the nonelderly population (under age 65) with health insurance coverage decreased to 81.5 percent in 2010. Increases in health insurance coverage have been recorded in only three years since 1994, when 36.5 million nonelderly individuals were uninsured. The percentage of nonelderly individuals without health insurance coverage was 18.5 percent in 2010, up from 18.3 percent in 2009, and its highest level during the 1994-2010 period. EMPLOYMENT-BASED COVERAGE REMAINS DOMINANT SOURCE OF HEALTH COVERAGE, BUT CONTINUES TO ERODE: Employment-based health benefits remain the most common form of health coverage in the United States. In 2010, 58.7 percent of the nonelderly population had employment-based health benefits, down from 69.3 percent in 2000. SHIFTING COMPOSITION OF EMPLOYMENT-BASED COVERAGE: Between 2007 and 2010, the percentage of individuals under age 65 with employment-based coverage in their own name has dropped. In 2007, 54.2 percent had coverage in their own name. By 2010, it was down to 51.5 percent. Dependent coverage during this time period fell slightly from 17.5 percent to 17.1 percent, and increased slightly from 16.8 percent to 17.1 percent between 2009 and 2010. PUBLIC PROGRAM COVERAGE IS GROWING: Public program health coverage expanded as a percentage of the population in 2010, accounting for 21.6 percent of the nonelderly population. Enrollment in Medicaid and the State Children's Health Insurance Program increased, reaching a combined 45 million in 2010, and covering 16.9 percent of the nonelderly population, significantly above the 10.2 percent level of 1999. INDIVIDUAL COVERAGE STABLE: Individually purchased health coverage was unchanged in 2010 and has basically hovered in the 6-7 percent range since 1994. WHAT TO EXPECT IN 2011: 2010 is the most recent year for data on sources of health coverage. Unemployment in 2011 has been about 9 percent since the beginning of the year. While down from the 2010 average of 9.6 percent, it remains high and there is a continued threat of a double-dip recession increasing it even further. As a result, the nation is likely to see continued erosion of employment-based health benefits when the data for 2011 are released in 2012. Fewer working individuals translates into fewer individuals with access to health benefits in the work place, especially after COBRA subsidies have been exhausted.     

Implications of ERISA for health benefits and the number of self-funded ERISA plans

This Issue Brief provides an overview of the issues relating to the Employee Retirement Income Security Act of 1974 (ERISA) and health benefit plans, the major case law relating to ERISA and health plans, and the implications of the preemption of state regulations for health plan sponsors and participants. It also presents the latest data on the number of health plan participants in self-funded ERISA plans. Finally, it presents a summary of current legislative proposals that would attempt to amend ERISA. Under the framework ERISA established for employee benefit plans, the regulation of employment-based health benefit plans has evolved into a two-tiered system in which both federal and state laws play important roles. The Supreme Court has interpreted ERISA's "savings" and "deemer" clauses to mean that insured plans are subject to regulations directly at the federal level and indirectly at the state level, while self-funded plans are regulated exclusively at the federal level. The ERISA statute and the courts' interpretations of the Act have created a sharp controversy over how employee health benefit plans are provided and administered, with state regulators and consumer advocates on one side of the debate and plan sponsors (e.g., employers and unions) on the other. State regulators and consumer advocates tend to favor more regulation, and in many instances greater regulation at the state level, which they argue would provide more protections for consumers. However, employers and unions (or any plan sponsors) think ERISA preemption is very important to their ability to provide innovative and cost-effective health benefits for their employees, and assert that ERISA's present structure should be preserved. The U.S. General Accounting Office (GAO) found that 44 million individuals (39 percent of those in ERISA plans) were enrolled in self-funded ERISA plans in 1993, up from 39 million (33 percent of those in ERISA plans) in 1989. The Employee Benefit Research Institute (EBRI), using the same methodology as GAO with 1995 data, estimated that 48 million individuals (39 percent of those in ERISA plans) were enrolled in self-funded ERISA plans in 1995. When policymakers look to amend ERISA, they should consider whether the change to ERISA will produce a higher level of quality for consumers than is being provided under the present system and will continue to do so in the future. Policymakers must also decide whether quality of care is better enhanced by health plans' greater exposure to liability or by market forces. If policymakers decide that increased exposure to liability is the route to go, will consumers be able to enjoy any potential improvement in quality or will more individuals end up uninsured because of increased costs and not be able to get any care regardless of the quality?     

Employment-based health benefits: who is offered coverage vs. who takes it

This Issue Brief provides data on employment-based health insurance, with a discussion of recent trends and how sponsorship rates, offer rates, coverage rates, and take-up rates vary for different workers. Other sections examine reasons why workers do not participate in employment-based health plans, alternative sources of health insurance, and uninsured workers. In 1997, 83 percent of the 108.1 million wage and salary workers in the United States were employed by a firm that sponsored a health plan. Of those workers, 75 percent were offered coverage, and 62 percent (or 67.5 million workers) were covered by that plan. Of those workers who worked for an employer that offered them a health plan, 83 percent participated in the plan. Sponsorship rates have barely changed in the last 11 years. In 1988, 83 percent of wage and salary workers reported that their employer sponsored a health plan. This declined slightly to 82 percent in 1993 but had increased to 83 percent by 1997. Offer rates significantly changed between 1988 and 1997. In 1988, 82 percent of workers reported that they were eligible for health insurance through their employer. By 1993, the percentage of eligible workers declined to 74 percent, and it has only slightly increased since then to 75 percent in 1997. In 1997, 40.6 million American workers did not have health insurance through their own job. Forty-five percent of the workers without coverage were employed at a firm where the employer did not provide health insurance to any workers. Thirty-three percent of the workers without coverage were offered coverage but declined it. Twenty-two percent of the workers without coverage were employed in a firm that offered health insurance to some of its workers, but certain workers were not eligible for the health plan. The 13.7 million workers who were offered coverage but declined it gave a number of reasons for doing so. In the majority of cases (61 percent), the worker was covered by another health plan. Of the remainder, 20 percent reported that health insurance was just too costly. Overall, 41 percent of the 40.6 million workers who were not participating in an employment-based health plan through their own employer had coverage through a spouse. However, 42 percent of the 40.6 million workers who declined their employers' health plan or who were not offered health insurance from their employer were uninsured.     

Characteristics of the nonelderly with selected sources of health insurance and lengths of uninsured spells

This Issue Brief examines the characteristics of individuals with selected sources of coverage and combinations of sources of coverage over a 12-month period. In addition, it examines the characteristics of individuals who experience spells without health insurance and the lengths of these spells. It uses the most recent 12-month period from the Survey of Income and Program Participation and builds on previous research on the lengths of spells with and without health insurance. Analysis of individuals' health insurance coverage from October 1994 to September 1995 showed that approximately 77.6 percent of the nonelderly had health insurance coverage during this entire period. In addition, 22.4 percent of the nonelderly were uninsured for at least one month during this period, and 7.4 percent of the nonelderly were uninsured for the entire period. Of those with health insurance coverage for the entire year, approximately 83 percent were covered by private health insurance, with at least 81 percent of this group receiving the coverage from employment-based sources. Eighty-five percent of the spells without health insurance with an observed beginning and end lasted for 4 months or less, and 99 percent lasted for 8 months or less. When examining the spells with either an observed beginning or end, 55 percent of these spells were found to last for 4 months or less, and 87 percent were found to last for 8 months or less. However, investigation of all spells without health insurance showed that approximately one-half of all spells without health insurance coverage lasted for 8 months or longer. This report found that two-thirds of spells without health insurance last for less than one year, confirming previous research that a majority of these spells are for less than a year. However, this report also confirms the existence of a significant number--approximately one-third of all individuals with a spell of noncoverage--of chronically uninsured individuals. These individuals are the most likely to delay seeking treatment for illnesses and to use the emergency room as their only site of care. Because they are in poverty or near poverty, much of this care is uncompensated. Thus, to the extent that providers can shift these costs onto other payers, all individuals and employers share in these costs through higher health insurance premiums or higher taxes to finance public hospitals and public insurance programs. Recent major health insurance legislation has addressed access to health insurance, and in many cases focused solely on continued access to employment-based coverage, but has done very little to address the affordability of coverage. However, as this report demonstrates, many individuals experiencing spells without health insurance have low incomes. Thus, to obtain coverage, individuals need not only increased access to health insurance but also the ability to afford this health insurance.     

Sources of health insurance and characteristics of the uninsured. Analysis of the March 1996 Current Population Survey

This Issue Brief provides summary data on the insured and uninsured populations in the nation and in each state. It discusses the way health protection has changed for the insured, how the states rank in health insurance protection, and the characteristics most closely related to whether or not an individual is likely to have health insurance. The report is based on Employee Benefit Research Institute analysis of the March 1996 supplement to the Current Population Survey (CPS) and represents the most recent data available. In 1995, there were 231.9 million civilian, nonelderly Americans in the United States, 163.9 million (70.7 percent) of whom were covered by private health insurance. Almost 148 million individuals (63.8 percent) were covered by an employment-based plan. Over 38.4 million individuals (16.6 percent) were covered by publicly financed health insurance, and 29 million (12.5 percent) were covered by Medicaid. In 1995, 17.4 percent of the nonelderly population, or 40.3 million individuals, were not covered by health insurance. This is an increase from 39.4 million, or 17.1 percent, in 1994. In general, the percentage of the population without health insurance has been increasing. In 1988, 15.2 percent of the U.S. population was uninsured. The 104th Congress passed the Health Insurance Portability and Accountability Act of 1996 in the interest of making health care more portable and affordable. Additional legislation was passed addressing mental health benefits and maternity length of stay. These bills will do little to decrease the size of the uninsured population. They include provisions for group-to-group portability, group-to-individual portability, an increase in the self-employed health deduction, medical savings accounts, mental health parity, and minimum length-of-stay requirements for childbirth. These provisions in large part benefit individuals who already have health insurance. They do not directly address the larger problem of its affordability. Data from the Survey of Income and Program Participation indicate that 50.7 million individuals lacked health insurance coverage for at least one month during calendar year 1992. Approximately 43 percent were uninsured between one and four months. The median spell without health insurance was six months. These data would seem to indicate that even though many individuals may lose health insurance during any given month, the majority are uninsured for a short period of time.     

Employer-sponsored long-term care insurance: best practices for increasing sponsorship

Behind the enthusiasm of policymakers for long-term care (LTC) insurance is the belief that increased ownership of private LTC insurance will reduce the government's future liability for financing the nation's LTC needs, currently projected by the Congressional Budget Office to increase by 2.6 percent annually between 2000 and 2040. Some observers say that sustained economic growth could keep these increased expenditures at the same share of total GDP; others argue that current federal expenditure trends will become unsustainable without large tax increases. The potential of the employer-sponsored group LTC market to stave off a national LTC financing crisis has recently started to receive popular notice in the news media. However, for the potential of the group LTC market to be realized, there must be widespread employer sponsorship of group LTC plans and significant participation levels among eligible employees in these plans. The present analysis of industry data estimates the LTC plan sponsorship rate for all U.S. employers with 10 or more employees at 0.2 percent. The sponsorship rate among large employers is significantly higher (8.7 percent). The greatest growth opportunities are projected to lie in the smaller employer market, because it is enormous and virtually untapped. Nonsponsors cite a variety of barriers to employer sponsorship of LTC plans. For many nonsponsors, the most important obstacles are the intrinsic characteristics of their work forces: employees are too young, transient, part-time, and/or low-income to be suitable for LTC insurance. For many others, lack of awareness and low priority are the primary obstacles. Because group LTC insurance has been widely available for only 10 years, many benefits managers view it as "too new and untested." Prior to the passage of the Health Insurance Portability and Accountability Act (HIPAA), in August 1996, the tax treatment of long-term care insurance premiums was unclear because Congress had not addressed the issue and the Internal Revenue Service had not issued clear guidance. In essence, HIPAA served to clarify the tax status of LTC insurance and establish product criteria for tax qualification. The interventions contained in HIPAA appear to have been insufficient to stimulate coverage growth rates that will meaningfully reduced the future burden on government financing of LTC. Although employment-based LTC insurance appears to be the best mechanism for mass expansion of coverage at affordable rates, the data suggest that employer sponsorship of LTC plans is relatively rare, especially among smaller employers, and that sponsorship rates may not dramatically increase without significant investments in employer education and new incentives.     

Health insurance portability: COBRA expansions and job mobility

This Issue Brief discusses continuation-of-coverage mandates under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). It provides background information on health insurance portability and job mobility, data on the cost to employers of providing continuation of coverage to former employees, and a summary of empirical research on COBRA's effect on employee benefits and job mobility. COBRA coverage can be considered advantageous for most workers, as it allows continuation of the health insurance policy they had in place at work when they lose or leave a job. Although employees can be required to pay 102 percent of the premium for COBRA coverage, they can usually realize significant savings compared with the cost of purchasing the equivalent insurance policy in the private market. Many employers consider COBRA to be a costly mandate for three reasons. First, premiums collected from COBRA beneficiaries typically do not cover the costs of the health care services rendered. Second, COBRA imposes an additional administrative cost on employers. Third, many employers view the penalties for noncompliance as excessively large. According to a survey conducted by Charles D. Spencer & Associates, of the 10.2 percent of employees and dependents who were eligible for COBRA coverage in 1996, over 28 percent elected it. In addition, average employer claims costs for COBRA beneficiaries amounted to $5,591, compared with $3,332 for active employees in surveyed plans. According to Employee Benefit Research Institute estimates of the Survey of Income and Program Participation (SIPP), the COBRA population is much older than the general insured population. COBRA beneficiaries also have higher personal income than the general insured population, with this difference being almost entirely due to differences in retirement income. Any attempt to expand COBRA coverage, either through subsidies or by allowing workers to choose from plans with lower premiums, would likely result in increased employer health care costs. As a result, employers may consider various alternatives to reduce, shift, or eliminate the impact of this increased cost. One alternative would be to continue requiring active employees to share in the increased costs through higher employee contributions. A second alternative would be to reduce or eliminate health care benefits for active employees and/or future retirees and their families. A third alternative would be to reduce the size of the work force eligible for health insurance benefits. Finally, employers may pass additional costs on to workers or consumers.