Health Insurance Eroding for Working Families: Employer-Provided Coverage Declines for Fifth Consecutive Year

In 2005, the percentage of Americans with employer-provided health insurance fell for the fifth year in a row. Workers and their families have been falling into the ranks of the uninsured at alarming rates. The downward trend in employer-provided coverage for children also continued into 2005. In the previous four years, children were less likely to become uninsured as public sector health coverage expanded, but in 2005 the rate of uninsured children increased. While Medicaid and SCHIP still work for many, the government has not picked up coverage for everybody who lost insurance. The weakening of this system—notably for children—is particularly difficult for workers and their families in a time of stagnating incomes. Furthermore, these programs are not designed to prevent low-income adults or middle- or high-income families from becoming uninsured. Government at the federal and state levels has responded to medical inflation with policy changes that reduce public insurance eligibility or with proposals to reduce government costs. Federal policy proposals to lessen the tax advantage of workplace insurance or to encourage a private purchase system could further destabilize the employer-provided system. Now is a critical time to consider health insurance reform. Several promising solutions could increase access to affordable health care. The key is to create large, varied, and stable risk pools.