Who has insurance?
Health insurance is a means for financing a person’s healthcare expenses. The majority of people have health insurance through an employer.
Health Insurance Coverage
In 2020, 8.6% of people, or 28.0 million, did not have health insurance the entire year. The number would be much higher if you include the people who did not have health insurance part of the year.
• The percentage of people with health insurance coverage for all or part of 2020 was 91.4%. This number is fudged upwards by including people who had coverage only part of the year. The rest of the time they would be uninsured.
In 2020, private health insurance coverage continued to be more common than public coverage at 66.5% and 34.8%, respectively.
♦ Private Coverage = Employment-based + Direct-purchase + Tricare (formerly known as Civilian Health and Medical Program of the Uniformed Services)
♦ Public Coverage = Medicare + Medicaid including CHIP + CHAMPVA or VA
Employment-based insurance was the most common, covering 54.4% of the population for some or all of the calendar year.
Between 2018 and 2020, the rate of private health insurance coverage decreased to 66.5%, driven by a 0.7% decline in employment-based coverage to 54.4%.
• In 2020, 87.0% of full-time, year-round workers had private insurance coverage, up from 85.1% in 2018.
People who worked less than full-time, year-round were less likely to be covered by private insurance in 2020 than in 2018 (68.5% in 2018 and 66.7% in 2020).
More children under the age of 19 in poverty were uninsured in 2020 than in 2018. Uninsured rates for children under the age of 19 in poverty rose 1.6% points to 9.3%.
In 2000, close to 70% of Americans received coverage through employers. That number has declined to 54.4% in 2020.
♦ The percentage of the U.S. population received coverage through government programs is growing.
In June 2021, 76 million people were enrolled in Medicaid and close to 7 million were enrolled in CHIP.
Since February 2020, enrollment in Medicaid has increased 19.2% and CHIP enrollment has increased 3.5%.
♦ There are a number of reasons for the decline in employer sponsored coverage. Cost is the main reason.
The number of people eligible for employer sponsored health insurance has also been declining. Part of this decline is related to job loss or reduction in hours worked.
♦ In 2020, the percentage of uninsured continues to hover around 8.6% or 28 million.
This number is grossly unreported by the U.S. Census Bureau which only considers an individual to be uninsured if they do not have health insurance coverage for the entire calendar year.
Cost is a factor
Over 49 million people in the United States had no health insurance in 2010.
♦ Due to factors like the Affordable Care Act and expansion of Medicaid the uninsured rate has been sharply reduced.
• Cost is proving a major barrier, especially for families that do not qualify for a premium tax credit to help subsidize their insurance.
♦ Roughly 97% of larger companies (over 50 employees) continue to offer some form of health insurance coverage as an employment benefit.
The price of which, has more than doubled over the past 10 years.
• The Kaiser Foundation estimates the average cost of covering an employee and his or her family at a large company to be around $20,758. Large companies can better support these hefty sums but smaller companies cannot.
♦ The Affordable Care Act requires all companies with 50 or more full-time employees to offer insurance or pay a penalty.
Today, 31% of companies with fewer than 50 employees offer health insurance.
♦ Small and medium size companies that do not offer any coverage cite cost as the main reason.
Some companies offer more money so their employees can buy insurance on their own. Most however don’t offer much help in the way of subsidizing the cost of coverage.
Will employers drop coverage?
The Affordable Care Act makes the individual market more attractive.
Insurers can no longer refuse to cover someone even if they are not healthy, or to charge them an exorbitant fee.
Individuals with incomes of 100-400% of the Federal Poverty Level may qualify for subsidies to buy insurance through the exchanges.
• The concern is that employers may see this as a chance to save money by dumping their employees on the health exchanges.
To prevent this, the law imposes a steep fine per employee for any employer (with more than 50 employees) that does not sponsor health insurance coverage.
Some companies may opt to pay the fine, however.
♦ Employers that continue to sponsor insurance will be increasing the amount they expect their employees to pay for coverage.
Most will continue to change their health plans to shift more of the cost for services to the employee in the form of higher deductibles and higher copays.
There is expected to be a greater push to use Consumer-Driven Health Plans under the guise of encouraging employees to become more responsibility for their use of health care services.
There will be a continued shift from PPO type plans to more restrictive HMO type plans.
♦ As the employee’s costs increase, there is a danger that they will delay seeking essential treatment for fear of the bill. That could leave companies with a sicker, less productive workforce.
The trend is clearly away from employer sponsored health insurance, but to what?
Age is strongly associated with the likelihood that a person has health insurance and the type of health insurance a person has.
• Adults aged 65 and over had the highest rate of health insurance coverage because most are eligible for Medicare.
♦ The population aged 26 to 34 is the least likely to be insured.
This is the population that insurance companies want the most. They are the least likely to use health insurance.
♦ Children under age 19 are more likely to be covered by health insurance at a higher rate than working-age adults.
One reason for this could be that children from lower income families may be eligible for programs such as Medicaid or the Children’s Health Insurance Program (CHIP).
The Children’s Health Insurance Program (CHIP) is a government program that provides health insurance to children in families with incomes too high to qualify for Medicaid, but who are unable to afford private health insurance.
♦ All age groups have experienced a consistent decline in uninsured rates following the adoption of the Affordable Care Act.
• Employers will continue to try to shift more costs to the employees as a means of keeping health insurance as a benefit alive.