Pennsylvanians Lose Employment-Based Health Care Faster Than the Nation

October 29, 2009

Employers provided health insurance to 694,471 fewer Pennsylvanians in 2007 and 2008 than at the start of the decade, according to a new report analyzing U.S. Census data.

The Economic Policy Institute in Washington, D.C., and the Pennsylvania Budget and Policy Center in Harrisburg jointly released the study, which found that Pennsylvania outstripped every state in the nation except Michigan in the loss of employer-sponsored health care between 2000-01 and 2007-08.

The report analyzed U.S. Census Bureau data from 2000 to 2008. State-level data are averaged over two years to reduce sampling error.

Nationally, the percentage of Americans under age 65 covered by an employer policy fell in each of the past eight years, going from 68.3% in 2000 to 61.9% in 2008. That amounts to 17 million fewer Americans insured by an employer policy today.

The number of Pennsylvania workers and their dependents with employment-based health insurance fell from 7,929,984 in 2000-01 to 7,235,512 in 2007-08 – a decline of 694,471. The rate of employer coverage in the commonwealth dropped from 75.9% in 2000-01 to 69.7% in 2007-08 – outstripping the national average decline during that period.

Overall, Pennsylvania has a higher rate of employment-based coverage than the national average. Among the 50 states and Washington, D.C., the state ranked 10th in employer coverage rates in 2007-08.

Still, working Pennsylvanians are less likely to be insured by their employer today than they were seven years ago. In 2000-01, 82.5% of working Pennsylvanians were insured by their own employer, while in 2007-08, the rate dropped to 77.9% – a decline of 4.7 percentage points.

Pennsylvania also has seen a larger-than-the-national-average decline in the number of children covered by an employer policy. In 2007-08, 201,425 fewer Pennsylvania children were covered by employer policies than seven years before.

Still, the rate and number of children without health insurance has bucked overall downward trends in Pennsylvania, remaining the same between 2000-2001 and 2007-2008.  For both periods, approximately 200,000 children lacked coverage, making up slightly more than 7% of the population.

As is the case nationally, increased enrollment in Medicaid and SCHIP compensated for the loss of employment-based coverage for kids. Since 2000-01, the share of the population with coverage through those public programs grew from 10% to 14.3% in Pennsylvania.

A major cause of the decline in employer coverage is the skyrocketing cost of health care, which has made employers less likely to offer insurance coverage to their workers. Given the state of the economy, millions more Americans are expected to lose employer-sponsored health insurance over the next two years which is likely to further strain public programs.

Click here for a fact sheet detailing the study's main findings and click here to access the full report.