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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, Jonniesha.
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 organization.

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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