Most Americans get their health insurance through their–or their spouse’s–employer. Of course, that’s more or less an unintended consequence of wage freezes that took place during World War II, but hey, our accidental health care system has really grown on us. There’s also that pesky little piece of information that often goes unreported that our employers aren’t required to offer us insurance. Shhhh! Don’t tell anyone, or employers might find out and stop offering coverage. In fact, not all employers currently offer benefits. You probably knew that, but it’s the first crack in the facade. There are two more. Even if employers offer health insurance benefits, the employee’s portion of the costs may be prohibitively expensive, or the employee may not be eligible for the benefits (perhaps they only work part-time or they haven’t worked for the company long enough to receive benefits). Those are cracks two and three.
A new statistical brief from the Agency for Healthcare Research and Quality (AHRQ) takes a look at employer-sponsored health insurance over the period from 1998 to 2008 and finds that some of the cracks in the system are growing larger. First, it seems that about 87% of employers are on average offering benefits to their employees, and that didn’t change across the decade. The gap between large firms (50+ employees) and small firms (<50 employees) is notable, though. About 97.5% of large firms offer benefits. In 1998, only 64.7% of small firms did so, and that number dropped significantly to 61.6% in 2008.
Eligibility rates were statistically flat, however, going from 77.6% of employees at firms offering insurance in 1998 to 78.1% in 2008. The real noticeable decline has to do with eligible employee uptake of benefits, which across all firms dropped from 85.3% in 1998 to 78.7% in 2008. So, significantly fewer employees who work for companies offering benefits and who are eligible for those benefits are electing to purchase the benefits. Why? The answer is painfully obvious: It costs too much.