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PA Residents Losing Employer Coverage at Rate Second Only to CA

HARRISBURG, Pa., Nov. 1 /PRNewswire-USNewswire/ -- Nearly half a million fewer Pennsylvanians are receiving health insurance through their employer than were getting it just five years ago, according to a report released jointly today by the Economic Policy Institute in Washington, DC, and the Pennsylvania Budget and Policy Center in Harrisburg.

That decrease was the largest of any state in the country, except California.

Almost 200,000 of those newly non-covered residents were children, the report found.

The study, The Erosion of Employment-Based Health Insurance: More Working Families Left Uninsured, found that although employment-based coverage is still the most prevalent form of health insurance in the nation, the rate of such coverage has fallen every year since 2000. Some 3.1 million fewer Americans -- including 491,392 Pennsylvanians -- had employment-based coverage in 2006 than in 2001.

"Despite an upturn in the overall economy, the loss of health insurance coverage through employers has continued," said Sharon Ward, Director of the Pennsylvania Budget and Policy Center (PBPC), a non-partisan policy research project that analyzes state tax and budget matters. "Health insurance, which for a long time came as a basic benefit to a decent, middle-class job, is disappearing for many Pennsylvanians."

Ward attributed the decline in coverage to the continued loss of manufacturing jobs in the Commonwealth and to the rising cost of health insurance, especially for small businesses. Between 2000 and 2006, she said, insurance premiums increased by 76 percent.

The report by EPI, a non-partisan economic think tank that works to broaden public debate on the national economy, noted that the decline in employer coverage in the past five years has been pervasive and felt throughout the country. Thirty-eight states experienced significant losses in employment-based coverage for people under 65 years old, and four states-Utah, South Carolina, Maryland, and Georgia-saw losses of more than seven percentage points. No state had an increase in its employer-provided coverage rate.

Pennsylvania's downward trend in employer-provided coverage for children through their parents' employer was also reflected nationally. Some 3.4 million fewer children had employment-based coverage in 2006 than in 2001, and in 2005 a trend of the previous four years-the expansion of public-sector health insurance-reversed, leaving 940,000 more kids without coverage.

Joan Benso, President and CEO of Pennsylvania Partnerships for Children, said the study provides still further evidence that Congress needs to act now to reauthorize the federal SCHIP program. "SCHIP is an example of a state- federal, public-private partnership that effectively fills the gap for children," she said. "Without a strong reauthorization of SCHIP, even more children could lose access to health care."

Small business owners in the state agreed that the cost of providing good health coverage has become exorbitant.

"The best thing the state legislature could do for my small business is to reform the insurance laws," said Bill Hughes, co-owner of Kathie's Christmas and Collectibles in Lower Allen Township. "Without laws that restrict medical underwriting and limit rate increases, I am one illness or accident away from dropping or severely downgrading coverage for my employees," he added.

The state legislature is currently considering Gov. Ed Rendell's "Prescription for Pennsylvania," a comprehensive plan to reduce health care costs and make insurance more affordable for small businesses. The "Cover All Pennsylvanians" program, modeled after the popular "Healthy New York" program, would offer a low-cost insurance option for employers with fewer than 50 employees.

The Prescription would also include legislation to enact additional consumer protections in the small business insurance market, including rate review, a minimum medical loss ratio, and provisions to ban medical underwriting. All of these measures would help to reduce rate increases and make insurance more affordable. Pennsylvania is one of only three states that allows medical underwriting, a practice that permits an employee's health status and medical history to be considered when rates are set.

"My premiums increased this year from $450 per month to $600 per month for each employee, and I dropped my coverage," said Paul Bennett, Director of the Discovery and Learning Center for children in Upper Darby. Cover All Pennsylvanians would offer me an option to do the right thing and get my employees the coverage that they deserve, but that I just can't afford today."

There is good news in an otherwise grim report, according to Ward. Pennsylvania still has much higher rates of employer-based coverage and smaller percentages of citizens without insurance than most states. "The Prescription for Pennsylvania, like similar proposals in California and Illinois, looks to reign in cost drivers and expand coverage," said Ward. "Delaying action on the governor's plan will postpone the problem but make it more difficult and more costly to resolve in the long run."

Among the study's other main findings were:

-- The number of uninsured nationwide grew in 2006 to 47 million-up by 8.6


-- Individuals among the bottom 20 percent of household incomes were the

least likely to have employer coverage: 21.9 percent of the bottom

income quintile were covered, compared to 86.2 percent for people in

the highest income quintile.

-- No category of workers was insulated from loss of coverage. Even full-

time workers, workers with a college degree, and workers in the highest

wage quintile, experienced declines in coverage between 2000 and 2006.

-- 70.6 percent of Pennsylvanians and 63.2 percent of Americans had

insurance through an employer in 2005-06. (Note: Data are averaged over

two years to increase sample size and the precision of the estimates.)

-- During this period, 60.1 percent of Americans received health insurance

through their own employer, compared to 66.8 percent of Pennsylvanians.

-- According to the Census data, 10 percent of Pennsylvanians under the

age of 65 were uninsured in 2005-06, up from 8 percent in 2000-01. In

contrast, 15.8 percent of non-elderly Americans were uninsured, up from

13.7 percent.

Health Insurance Coverage in Pennsylvania and the US

Economic Policy Institute Analysis of March, 2007 Current Population


Table 13. Employer provided health insurance coverage, population under 65

years old

2000-01 to 2005-06

Percent covered Number covered % of

State 2000-01 2005-06 % change 2000-01 2005-06 change total

US 67.6% 63.2% -4.5% 167,174,509 164,025,026 -3,149,483

PA 75.9% 70.6% -5.4% 7,929,984 7,438,592 -491,392 15.6%

Source: EPI analysis of March Current Population Survey, 2001-07.

Table 15. Employer-provided health insurance coverage by state, children

under 18 years old

2000-01 to 2005-06

Percent covered Number covered % of

State 2000-01 2005-06 % change 2000-01 2005-06 change total

US 65.2% 60.3% -4.9% 47,220,271 44,648,233 -2,572,038

PA 74.3% 66.8% -7.5% 2,072,948 1,874,265 -198,683 7.7%

Source: EPI analysis of March Current Population Survey, 2001-07.

Table 14. Employer-provided health insurance coverage by state, workers

insured by own employer

2000-01 to 2005-06

Percent covered Number covered % of

State 2000-01 2005-06 % change 2000-01 2005-06 change total

US 58.50% 55.00% -3.5% 56,341,454 54,157,485 -2,183,969

PA 64.70% 61.60% -3.1% 2,797,141 2,668,010 -129,131 5.9%

Source: EPI analysis of March Current Population Survey, 2001-07.

Table HIA-4: Health insurance coverage status by state: Number and Percent

not covered

State 2000 Percent 2006 Percent Change

US 38,426,000 13.7% 46,995,000 15.8% 8,569,000

PA 963,000 8.0% 1,237,000 10.0% 274,000

Source: Current Population Survey, March 2001, 2007.

SOURCE Keystone Research Center
Copyright©2007 PR Newswire.
All rights reserved

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