Employers were dropping health coverage long before Obamacare

Employers were dropping health coverage long before Obamacare

By Steve Spires

Skyrocketing health-care premiums; businesses dropping health coverage for their employees; families struggling to pay for health insurance — all issues caused by Obamacare, right? Despite what health reform opponents want to believe, these trends have been plaguing Louisiana companies and working families for more than a decade.

New research from the Economic Policy Institute finds that between the 2000 and 2012, the share of Louisiana workers and their family members covered under health insurance plans provided by their employer dropped from 60.3 to 53 percent. That drop of 7.3 percentage points translates into 276,000 fewer people covered.

Non-elderly population with employer-sponsored insurance

Most Louisianans get health insurance through their job or the job of a family member. While the share of people covered by job-based health insurance has fluctuated over the last decade in response to natural disasters and economic ups and downs, the overall trend has been an erosion of coverage. Louisiana ranks 45th out of the 50 states  and the District of Columbia for the percentage of people who get health insurance through their jobs.

Nationally, the share of Americans who get health insurance at work dropped steadily from 68.5 to 58.4 percent over the same period as coverage became less affordable for families and some employers dropped it altogether. Small businesses that lack the bargaining power of larger corporations have had an especially hard time offering coverage to their employees, even though many want to.

Only 44.2 percent of Louisiana’s businesses offer coverage, compared to a national average of 50.1 percent, putting Louisiana near the bottom among the states. The problem is acute in Louisiana, where one in four working-age adults is uninsured, in part because small businesses provide a slightly larger share of jobs compared to the national average. While 93.7 percent of businesses in Louisiana with more than 50 employees offer insurance, only 26.5 percent of companies with fewer than 50 employees do so.

By contrast, the uninsured rate for children in Louisiana is at an all-time low, in large part due to Medicaid and the Louisiana Children’s Health Insurance Program (LaCHIP). These programs have offset the loss of employer-sponsored coverage, and protected more children from becoming uninsured when their parents lose coverage. Fortunately, Obamacare offers new coverage options and tax credits for many middle-income working families who can’t get coverage through their job, or who struggle to afford decent, affordable coverage in the current “Wild West” individual market. Reform will significantly reduce the number of uninsured Louisianans, and will especially be a lifeline to those who have been denied coverage altogether because they have a pre-existing condition — a practice that will no longer be allowed. The Kaiser Family Foundation recently estimated that 344,000 Louisianans could be eligible for tax credits to help make health insurance affordable.

Even with health reform, job-based coverage will remain the backbone of Louisiana’s insurance market. And reform has the potential to help more workers obtain health insurance through their employers. For example, small businesses will now be able to shop for coverage in the new marketplace, where their purchasing power will be pooled to encourage more affordable prices from insurers.