Health reform to provide new alternatives in 2014
AUSTIN — On February 23, the Center for Public Policy Priorities highlighted a new national report that shows employer provided health coverage has been on the decline over the last decade, and Texans are among the Americans least likely to be covered by their job, or by their spouse or parent’s job. The report, released by the Economic Policy Institute in Washington, D.C., compares employer-provided health coverage rates for persons under 65 across the states between 2000–01 and 2009–10. While on the decline, however, the report confirms that employer-provided health coverage is still the primary way Americans are covered.
Texas is third worst among the 50 states with only 51.1 percent of our non-elderly population covered by an employer; New Mexico and Mississippi residents have a rate of coverage at 48.6 percent and 48.4 percent, respectively. New Hampshire has the highest rate of coverage at 73.0 percent in 2009–10, followed by Connecticut (70.8 percent), Massachusetts (70.2 percent), and Utah (69.3 percent). Texas has the same third-worst state ranking in rates of employer-provided health coverage for its children at 45.1 percent after Mississippi at 41.3 percent, followed by New Mexico at 43.3 percent.
Employer-provided health coverage across the U.S. fell, on average, by 9.4 percentage points from 2000–01 to 2009–10, and Texas’ decline was just above that national average. The decline over that same period was even worse for Texas children (age 0-17), dropping by 11.3 percentage points from 56.4 percent in 2000-01 down to 45.1 percent for 2009-10.
“These data underscore why Texas needs health reform more than any other state,” says the center’s Senior Policy Analyst Stacey Pogue. “Small employers need the support and protection the new health reform law offers, whether they choose a tax credit or the security of knowing they won’t lose their best workers over health benefits because those workers can get good affordable coverage through the insurance exchange in 2014.”
In 2010, 31 percent of Texas small firms (fewer than 50 employees) offered a group health plan, compared to 95 percent of firms with 50 or more workers and average family premiums cost more than $14,500 a year.
“The health reform law provides strong incentives for the larger employers to keep offering benefits, and at the same time offers affordable solutions for the small firms and families who just can’t afford coverage today,” says Pogue.
The health reform law was designed to build on, not replace, employer-s Insurance, and most economists predict only modest gains or losses in employer-provided coverage rates after 2014.1 Massachusetts—the only state today with an insurance exchange with sliding-scale insurance premiums and an individual mandate—has had an increase in coverage.
Several reforms are already helping Texas employers with providing health insurance:
- Employers will get rebates from their insurers in the summer of 2012 if their health plans did not pay out at least 80 cents on the dollar in health care benefits in 2011;
- More than 120 of Texas’ largest employers—e.g., AT&T, American Airlines, Southwest Airlines, the Employee Retirement System, and Texas Instruments—have received over $425 million in federal support to lower early retiree health premiums.
- Today, small employers with 25 or fewer employees and average wages under $50,000 can get federal tax credits up to 35% of their ESI premiums (this credit will increase to 50% in 2014).
The report is available at: http://www.epi.org/publication/bp337-employer-sponsored-health-insurance/
Reporters who wish to schedule an interview with Anne Dunkelberg, associate director of the center, or Stacy Pogue, senior policy analyst, may do so by contacting Brian Stephens (firstname.lastname@example.org or 512.320.0222, ext. 112).
1 Avalere Health, The Affordable Care Act’s Impact on Employer Sponsored Insurance: A Look at the Microsimulation Models and Other Analyses, June 17, 2011, http://www.avalerehealth.net/pdfs/2011-06-17_ESI_memo.pdf.
The Center for Public Policy Priorities (CPPP) is a nonpartisan, nonprofit policy institute committed to improving public policies to make a better Texas. You can learn more about CPPP at www.cppp.org.