New EBRI Research: Continued Drop in Job-Based Health Insurance Seen Because of Rising Costs, Structural Changes

6/14/2004

From: Paul Fronstin, 202-775-6352; fronstin@ebri.org Jim Jaffe, 202-775-6353; jaffe@ebri.org both of EBRI

WASHINGTON, June 14 -- The percentage of workers with job-based health insurance will probably continue to decline in the years ahead, not just because of rising costs but also because of a shift of jobs from manufacturing into the service area, according to a new study by the Employee Benefit Research Institute.

The June issue of EBRI Notes reports that slightly more than 64 percent of nonelderly Americans (below age 65) had employment- based health benefits in 2002, down from more than 70 percent in 1987. While the trend can be explained in part by rising premium costs, it also reflects changes in employment patterns -- from manufacturing to services, and from full-time to part-time work. The EBRI report says these trends are likely to continue.

Between 1987 and 2002, the proportion of American workers ages 18?64 in manufacturing dropped from 24 percent to 18.8 percent, while those in service jobs grew from 17.7 percent to 26.4 percent. Significantly, there has been a simultaneous shift in health insurance coverage patterns. Manufacturing workers are less likely to receive health insurance as an employment benefit than they were in 1987, and those working in personal services are slightly more so. Despite this trend, health coverage remains higher for manufacturing workers (70 percent) than it is for personal services workers (slightly more than 50 percent). Health coverage for workers in the public sector has remained stable and high during the period.

"Today's economic trends are not promising for those who'd like to see broader health insurance coverage," said EBRI Chairman and CEO Dallas Salisbury, "and it's not just because health costs are going up."