Employment-Based Coverage: Is The Erosion in

Coverage the Tipping Point? Paul Fronstin, Ph.D.

Director, Health Research and Education Program

Employee Benefit Research Institute

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2

Characterizations of the Employment-Based Health Benefits

System• Vanishing

• Employers are fleeing the system

• Employer-based health care is ending. It is dying in front of our very eyes

• Employer-based health coverage is melting away like a popsicle on the summer sidewalk

3

Percentage of Employers With 3-199 Employees Offering Health Benefits,

2000-2007

59%

68%66%

63%

59%

60%

57%

59%

61%

63%

65%

67%

69%

2000 2001 2002 2003 2004 2005 2006 2007

Source: Kaiser Family Foundation.

4

Percentage of Employers With 3-199 Employees Offering Health Benefits,

1996-2007

63%60%

59%59%

59%

65%68%

66%

0%

10%

20%

30%

40%

50%

60%

70%

80%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Kaiser Family Foundation.

5

Worker Eligibility and Take-Up Rates for Own Employer Health Benefits,

Wage and Salary Workers Ages 18-64, 1988-2005

74.0%76.2%74.9%74.0%73.6%

75.7%77.8%

87.9% 86.5% 85.2% 84.9% 84.8% 84.0% 83.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1988 1990 1992 1994 1996 1998 2000 2002 2004

Eligibility rate Take-Up Rate

Source: Employee Benefit Research Institute estimates based on data from the Current Population Survey.

6

Percentage of Workers, Ages 18-64, With Employment-Based Health

Benefits, 1994-2006

73.3% 73.3% 73.5% 73.6% 74.2% 74.6% 74.9% 74.3% 73.0% 72.1% 71.7% 71.4% 70.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: Employee Benefit Research Institute estimates based on data from the Current Population Survey, March Supplement.

7

Percentage of Workers, Ages 18-64, With Employment-Based Health

Benefits, 2000-2006

74.9%

74.3%

73.0%

72.1%

71.7%

71.4%

70.9%

70%

71%

72%

73%

74%

75%

76%

2000 2001 2002 2003 2004 2005 2006

Source: Employee Benefit Research Institute estimates based on data from the Current Population Survey, March Supplement.

8

Average Monthly Premiums for Employee-Only Coverage and Family

Coverage, and CPI, 2000-2006

28 30 38 42 47 51 52

248

226222

201

174

150138

172.2 177.1 201.6195.3188.9184

179.9

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006

Employee-Only Coverage Family Coverage CPI

Source: Kaiser Family Foundation and Bureau of Labor Statistics (BLS).

9

Distribution of Deductibles for Employee-Only PPO Coverage, 2000-

2006

86%

14%

80%

20%

77%

23%

69%

31%

71%

29%

67%

33%

62%

38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$1 - $499 $500+

2000 2001 2002 2003 2004 2005 2006

Source: Kaiser Family Foundation.

10

Distribution of Physician Office Visit Copayments, All Plan Types, 2004-2006

57%

39%

48% 49%45%

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

$5-$15/visit $20 or more/visit

2004 2005 2006

Source: Kaiser Family Foundation.

11

Average Co-Payment for Prescription Drugs, 2000-2006

7

1317

8

1520

9

17

25

9

19

29

10

21

33

48

10

22

35

74

11

24

38

63

0

10

20

30

40

50

60

70

80

Generic Drugs Preferred Drugs Non-Preferred Drugs Fourth-Tier

2000 2001 2002 2003 2004 2005 2006

Source: Kaiser Family Foundation.

12

Characterizations of the Employment-Based Health Benefits

System• Vanishing

• Employers are fleeing the system

• Employer-based health care is ending. It is dying in front of our very eyes

• Employer-based health coverage is melting away like a popsicle on the summer sidewalk

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