We all know that millions are not covered, those that potentially are don't have full coverage, some that are can't afford their share of employment-based coverage and therefore forego it. In the post-Sicko world in which we live, the common wisdom seems to be that we are at the point where universal health care is inevitable.

Is that the case, though?

A new report by EBRI explores whether employment-based health benefits vanishing. The first part of the report reviews recent survey data that shows a situation of greater stability in coverage than we have come to believe. There is stability in the percentages covered and in many other measures.

EBRI thus concludes:

[M]any individual employers believe that there is a business case for offering health benefits to their workers, and they continue to invest substantial amounts of money in their health programs.

The EBRI report cites a number of studies that show far greater stability and continuity than is reflected in the news.

Despite the continued rising cost of providing health benefits to workers relative to workers’ earnings and overall inflation, an examination of recent history suggests that the employment-based system is not vanishing, although there has been some erosion in the availability of health insurance through smaller employers. In fact, the percentage of small employers offering health benefits in 2007 was about the same as it was in 1996. In 2000, 68 percent of employers with fewer than 200 employees offered health benefits. By 2005, only 59 percent offered it. Between 2005 and 2007, the percentage of small employers offering health benefits was stable. The erosion in availability among small employers between 2000 and 2005 followed an expansion in availability of health benefits that occurred between 1996 and 2000.

While there has been an erosion of availability of health benefits at the small employer level since 2000, the percentage of workers reporting that they have access to health benefits through their job is largely unchanged from the mid-1990s and down only slightly from the late-1980s. In 2005, 74 percent of workers who were not self-employed reported that they were eligible for health benefits through their own job, up slightly from 73.6 percent in 1995, but down from 77.8 percent in 1988. And while take-up rates for employment-based health benefits have fallen from nearly 88 percent in 1988 to 83.5 percent in 2005, fewer than 5 percent of workers who are eligible for health benefits from their own employer but decline them are uninsured, as most workers who decline coverage do so because they have coverage from another source.

In terms of whether workers have health insurance coverage, for the most part, the percentage of workers with coverage either from their own employer or from someone else’s employer has been remarkably stable, considering what has happened with the cost of providing health benefits and the fact that fewer small employers have offered coverage since 2000. Between 1994 and 2000, the percentage of workers with health benefits through an employer held steady at between 73 percent and 75 percent. Since 2000, the percentage of workers with health benefits has fallen to about 71 percent. While a 4 percentage point drop in the number of workers with health benefits may be significant, it does not imply that these benefits are vanishing.

However, that stability may belie an underlying instability that means the shift to universal health care may be closer than we think.

They also tend to agree that if one major employer were to drop health benefits, others would follow. And they tend to agree that public policy changes, such as the erosion or elimination of ERISA (federal) preemption of state insurance regulation, could mean the end of voluntary employment-based health benefits.

Workers are paying more out of pocket these days to keep their coverage, and those expenses come in many forms, including higher deductibles, shares of payments, and co-pays. A recent development is part of this shift of costs to employees - consumer-driven health benefits (CDHBs). These are high-deductible health plans such as plans with health savings accounts (HSAs) or health reimbursement arrangements (HRAs). The EBRI gives a number of examples of these efforts to shore up the existing system.

EBRI notes a number of initiatives by employers that suggest we are indeed at a critical point of change for health care in the United States:

The HR Policy Association, representing the chief human resource officers in the largest corporations in the United States, is currently developing a comprehensive position on health care reform. The Association’s members are committed to maintaining the nation’s system of employment-based health insurance if and only if major reforms can be achieved. Their commitment is contingent on near-term adoption of dramatic improvements that can help contain skyrocketing costs, improve efficiency and value, and improve overall quality.

In November 2006, the Committee for Economic Development (CED), an organization of business leaders and educators, released its recommendations for continuing to maintain some form of an employment-based health benefits system.20 After explaining in great detail why neither CDHB nor singlepayer (nationalized) options will solve the health care problems in the United States, the report discusses how the following ideas are being “oversold as solutions in themselves”:

• Information technology.
• Electronic medical records.
• Pay for performance.
• Disease management.
• Evidence-based medicine.
• Tort reform.
• Tiered high performance networks.
• Transparency.
. . .
This Issue Brief does not do justice to the various proposals mentioned above. The reader should refer to the specific proposals for those details. But their significance is that all the proposals have a common message that employers have reached a tipping point with health benefits and are either proposing alternatives to the status quo or are on the verge of releasing such a proposal.

Interviews with large employers showed that the system is now being shored up by a fear of being the first to drop health insurance coverage and the impact that would have on the ability to attract and keep workers and the existence of subsidies such as the employer tax deduction and ERISA pre-emption which, as now interpreted by the Supreme Court, prevents workers from being able to sue for even gross denials of health care. These large "employers all think that small employers might be on the verge of dropping benefits."

If you want to see the impact any of these legal subsidies could have, take a look at what is happening in retiree health coverage these days. A once stable system is now all but gone.

The report concludes that if just one large employer dropped health coverage, the system would collapse.

The EBRI report has links to a number of resources and sources from p.17 on.

• health,
• employment