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Study: Fewer Workers Insured

As premiums climb and employers drop health coverage, 20% more Californians will be uninsured in five years, researchers predict.

June 02, 2005|Debora Vrana | Times Staff Writer

The number of Californians lacking health insurance will grow by about 20% over the next five years as premiums rise and fewer jobs offer employer-sponsored coverage, predicted a study released Wednesday by UC Berkeley researchers.

Low- and middle-income adults in California will be most dramatically affected if current trends continue, concluded the study, conducted by the UC Berkeley Center for Labor Research and Education and the union-affiliated Working Partnerships USA, a San Jose-based nonprofit organization.

From 2000 to 2004, the percentage of California full-time workers making $9 to $11 an hour with employer-based coverage dropped from more than 59% to 46%, the researchers found. Nationwide, the decline for this pay range was from 64% to 58%.

"What we are facing is a downward spiral in healthcare coverage -- and California is five years further down the path than the nation as a whole," said Ken Jacobs, co-author and deputy chairman of the center.

Growth in the number of uninsured patients drives up healthcare costs, "and that in turn pushes more people into the ranks of the uninsured" by further discouraging employers from offering insurance, Jacobs said.

Arindrajit Dube, an economist at the center and a co-author, said the results were worrisome because the kinds of jobs being added most quickly in California pay about $9 an hour.

"The most alarming thing is that precisely where we are seeing job growth in California, that is where we are seeing the biggest declines of employer-sponsored healthcare," Dube said.

From 2000 to 2004, the number of all adults in California with access to health coverage through an employer declined to 58% from 61%, the study found.

These are just the issues that concern the California Chamber of Commerce, said spokeswoman Sara Lee. The study highlights the need to control healthcare costs, she said.

The research, part of a more extensive study expected to be released in July with more data on health coverage for California's children, took more than a year to complete.

It analyzed data from the U.S. Census Bureau, the state Department of Finance and health surveys to forecast insurance costs given current trends.

The work is being underwritten by grants from the nonprofit California Endowment and the Blue Shield Foundation of California.

As premiums for healthcare coverage escalate, more employers argue that they need to pass on costs to employees or drop coverage altogether to stay competitive, the study found.

That is happening throughout the nation, said Joanne Spetz, an economist at UC San Francisco who specializes in healthcare issues.

"This study doesn't surprise me. As costs go up, employers get rid of coverage or try to pass on the costs," said Spetz, who was not involved in the Berkeley study.

Nationwide, the annual cost to employees for job-based family coverage increased from $6,567 in 2000 to $9,831 in 2004, the study found -- an average annual increase of 11% that far outpaced growth in wages.

"The pillar on which our healthcare system as a whole relies, employer-based coverage, is deteriorating," said Anthony Wright, executive director of Health Access California, an Oakland-based nonprofit. "We are getting dangerously close to a tipping point where companies that are providing coverage have no choice but to drop it."

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(BEGIN TEXT OF INFOBOX)

Losing coverage

In most income categories, the percentage of full-time workers in California with employer-sponsored health insurance declined from 2000 to 2004.

Percentage of full-time workers receiving employer-sponsored coverage:

Below $9/hour*

2004: 27.9%

2000: 30.6%

$9 to $11/hour

2004: 45.9%

2000: 59.4%

$11 to $13/hour

2004: 63.5%

2000: 66.2%

$13 to $15/hour

2004: 68.5%

2000: 75.0%

$15 to $19/hour

2004: 77.0%

2000: 76.7%

$19 to $23/hour

2004: 75.5%

2000: 81.5%

$23 or more/hour

2004: 82.7%

2000: 84.9%

*Wage groups are in 2004 dollars.

Sources: Census Bureau's March Current Population Survey, UC Berkeley Center for Labor Research and Education

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