More find health plans too costly
Coverage from employer goes untaken
By Kimberly Blanton, Boston Globe Staff
July 6, 2004
Soaring premiums and copayments are squeezing a rising numbers of Americans
unable to purchase health coverage offered by employers. People who have
access to insurance, yet can't afford it, even when it's subsidized by
an employer, are adding to the nation's population of 37 million uninsured,
a new survey by the Urban Institute found.
The biggest declines in coverage have occurred among low-income workers,
but all workers and particularly those employed by small companies, which
have less clout with insurers to negotiate their premiums, are also less
likely to purchase employer coverage.
In 2002, 88 percent of all people eligible for insurance at work, including
their spouses and children, purchased it, down from 90 percent in 1999,
the institute said. Linda Blumberg, a senior research associate, said
medical inflation in 2003 probably caused more erosion in coverage, though
the survey did not examine 2003 figures.
''We haven't gotten to the point where we're seeing a mass exodus"
from employer-provided insurance, said Blumberg, who wrote the study with
John Holahan. ''But it's a signal of the difficulty that people are having,
and they're avoiding coverage." The Urban Institute is a nonpartisan
economic social policy research organization.
Kimberly Jones felt there was no way the small paycheck she gets as a
certified nursing assistant could absorb the doubling in her health insurance
premium, to $43 a week. She dropped coverage for herself and daughter,
The $200 she received for ''selling" her policy back to her employer
paid some bills. But the big savings each month drove her decision, the
single mother said, as Jonniesha, 10, rode her bike around their Roxbury
cul-de-sac of modest apartments.
They now receive the state's low-cost, but inferior, health assistance.
It covers their asthma treatments but not Jonniesha's medical evaluations
for a learning disability. ''It's the same health care homeless people
take," said Jones, who takes home $360 a week. ''And I work sometimes
40, sometimes 50 hours a week. It's sad I still can't afford health insurance."
Some employers ''may not even pay half of the cost," said Marcia
Hams, deputy director of Health Care for All, a Boston advocacy group.
Workers who decline their employer's health care frequently call her organization's
help line about assistance for medical emergencies.
Health care premiums rose 14 percent in 2003 for all employers and more
for small employers. They are, in turn, passing their costs on to workers,
taking more out of their paychecks and boosting copayments.
David Weinschrott, senior fellow at the conservative Hudson Institute,
said employers are also dropping health insurance altogether. ''The pressure
now is hitting lower-middle-income people, and it's moving up the income
distribution, because the pressure is so high," he said.
Last year, Dawn Barrett and her husband, a chef, together earned about
$55,000. Not much is left, she said, after paying a $1,000-a-month mortgage.
Barrett is a clinical therapist and on-site counselor in a group home
for teen trauma survivors in Western Massachusetts. She has a master's
degree in education and never imagined health insurance would be an issue.
Five months' pregnant, she is covered by her employer, Valleyhead Inc.,
including prenatal care. But her husband goes without insurance, and the
baby will, too, because the couple can't afford Valleyhead's family policy.
At $500 a month, it is a quarter of Barrett's monthly take-home pay. Just
as daunting, mental-health treatments for her husband piled on $8,000
in unexpected medical bills they are slowly paying off.
The health insurance system is ''extremely unfair," she said. ''With
starting a family, it makes me even more angry because we have a small
child coming into this world with the possibility of not being covered.
Or, if we are covered, do we give up our house and go back to an apartment
to be able to afford it?"
A tough economy makes it harder. Recent wage increases have been small,
making it difficult for employees to pay for rising premiums and copayments.
A weak job market removed a powerful incentive for companies to keep employees'
benefit costs down, reversing a trend in the boom years.
''It's an extreme period in terms of the health care cost increases relative
to inflation or wage increases," said Gary Claxton, vice president
of Kaiser Family Foundation, a Washington health care organization.
Parents increasingly are faced with whether to insure their children,
Urban Institute data show. In 2002, 83 percent of eligible children were
covered, down from 86.5 percent in 1999.
Declines were steepest for low-income workers and their children. The
study defines low-income as individuals earning less than $17,720 a year
and families of four with a household income below $36,200. In 2002, 66.8
percent of low-income workers eligible for their employer's insurance
purchased it, down from 72.6 percent in 1999. Only 58.6 percent of their
children were covered.
''The system of getting your health insurance benefits through your job
is broken," said Rand Wilson, of Jobs with Justice, a workers rights
Jones's life is fairly simple: It revolves around Jonniesha's well-being.
Not being able to properly support her is disappointing to a woman who
proudly went from welfare to work six years ago and finally could purchase
health insurance. When she decided to discontinue the insurance two years
ago, her employer paid her a small portion of what it saved by not covering
her, or about $200, she said. When she signed up for the employer insurance,
she thought, ''I'm actually earning this. I'm doing my part." Now
off the insurance, she said, her ''options are limited all over again."
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