Employer-Sponsored Insurance Still Cost-Prohibitive for Workers

December 17, 2019 - Even the promise of employer-sponsored insurance could not increase healthcare coverage for individuals facing increasingly high premiums, according to a Kaiser Family Foundation study.

The number of individuals accessing employer sponsored health plans did not rise in 2018, largely due to the fact that workers’ share of premiums are constantly increasing, rising steadily by 71 percent between 2009 and 2019, the study showed.

“Millions of people gained coverage under the ACA, but recent trends in insurance coverage indicate that coverage gains are eroding,” the researchers said. “Increases in the uninsured threaten the improvements in access to care and overall health and well-being following the ACA.”

In 2018, the uninsured population consisted of 27.9 million Americans, an increase of half a million from 2017. It has been steadily rising since 2016 when it dropped to 27 million, nearly half of the nation’s 2010 uninsurance level.

Attaining employment was no safeguard against uninsurance, the researchers found. Seven in ten uninsured individuals were employed full time or had a family member with full-time employment in 2018. Despite such high employment, 70 percent of uninsured workers were not offered access to employer sponsored health plans.

This is significant because major policy decisions are being made on the assumption that Medicaid work requirements help Medicaid beneficiaries move from Medicaid coverage into private coverage by gaining employment. The KFF numbers demonstrate that full-time employment does not necessarily mean an individual will be offered health insurance.

The 30 percent of uninsured individuals who did have the option of employer sponsored health plans but did not take advantage of the offer in 2017 largely turned it down for the same reason: of that 30 percent, most (90 percent) said that the cost of employer-sponsored insurance was prohibitive.

Cost forced many into uninsurance, with the price of healthcare being too high to afford insurance for over four in five uninsured individuals. This encompassed those who were eligible for a lower cost Affordable Care Act exchange plan.

These figures come as part of a larger report on uninsurance throughout 2018. The report also showed that cost was not the only barrier to insurance enrollment. For 21 percent of all uninsured populations, loss of employment or a change in employment situation led to uninsurance.

Other reasons for uninsurance included losing their Medicaid coverage (13 percent), change of status (10 percent), or working for an employer who does not offer insurance (9 percent). Three percent of the uninsured population said that they did not need healthcare coverage.

The study also found that lower-income families who had employer sponsored health plans struggled with their premium contribution and out-of-pocket spending. Those with an income that was over two hundred percent of the federal poverty level (FPL), who make up 48 percent of the uninsured population, tended to not experience the same level of difficulty in meeting these expenses.

Adults were less likely to be covered than children. While children can be enrolled under the Children's Health Insurance Program (CHIP) or Medicaid, adults see a lower likelihood of eligibility for federal health insurance aid.

Over eight in ten are nonelderly and more adults are uninsured than children. Fifteen percent were located in non-expansion states whereas 5 percent were in expansion territories.

Medicaid expansion under the Affordable Care Act (ACA) increased adult eligibility for Medicaid coverage in 32 states and DC in 2018, but the remaining states continued to have poor eligibility for adults. Low adult eligibility was particularly true for adults without dependent children.

Many of the uninsured also fell into a “coverage gap” for low-income uninsured adults. These adults are above the Medicaid income limits but are not eligible for premium tax credits on the federal health insurance marketplace.

Immigrant adults, both legal and undocumented, can struggle to gain insurance as well. Those who come into the country legally and are under 400 percent of the FPL can receive premium tax credits for the federal health insurance marketplace, but in order to go on Medicaid, a legal immigrant must wait five years to qualify. A separate report from earlier in 2019 also underscored this trend. Undocumented immigrants cannot gain insurance through Medicaid or on the federal health insurance marketplace.

While the reality of cost barriers is nothing new, the KFF report reveals that even employed and ACA eligible communities thought to be more immune to the effects of high healthcare costs are not safe from its effects.