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Fewer get workplace health plans

Premiums rise, coverage drops over decade

Americans who receive health insurance through their employers have dropped to less than one- half of all workers from about two- thirds a decade ago, according to a report on the nation's health coverage released yesterday by the US Bureau of Labor Statistics.

Health specialists said the decline in employer-sponsored health coverage stems from soaring insurance premiums and the inability of workers and small employers to afford the increasingly costly coverage. The report said there was a 75 percent increase in premiums paid by employees for their share of health coverage over the past decade, outpacing wages or inflation.

Shifts in the composition of the US work force and the recent economic decline also caused coverage to fall. Manufacturing employment has dropped steadily, and there has been a rise in the percentage of workers employed by service companies, which are less likely to offer health coverage to the extent that employers in traditional industries do. While half of workers in blue-collar jobs have health insurance, only 22 percent of low-wage workers are covered in service occupations such as waitresses, dental assistants, security guards, or childcare workers, the bureau said.

"We're really moving from a highly unionized and manufacturing-based economy to a service-based economy and to an economy in which many of the newest jobs created are in small businesses where benefits are least likely to be offered," said Diane Rowland, executive vice president of the Kaiser Family Foundation, a health care policy and research organization.

The study confirms a troubling trend: a deterioration in the relationship between workers and employers, who have provided health, pension, and other benefits in the past. Dental benefits are also less common: 32 percent of workers receive them, down from 39 percent a decade ago.

"Employer-sponsored coverage has traditionally been the mainstay of the US healthcare system, and if it begins to erode we're going to have larger numbers of people without health coverage," said Sara Collins of the Commonwealth Fund, a health research organization.

The study found 45 percent of US employees have health insurance at work, down from 63 percent in 1993. In New England, 43 percent of workers are covered. Walter Marshall, a bureau economist in the Boston office, called the drop in nationwide coverage "dramatic." But he warned the data may overstate the trend, in part because of coverage shifts within two-income families.

Marshall said rising premiums are the main reason workers are dropping coverage at a time when co-payments for drugs and office visits are also going up. The average premium paid by an employee for a single plan went from $34.09 per month in 1993 to $60.24 today, according to the bureau. For a family plan, an employee's share of the monthly premium rose from $130.65 to $228.98 over the same period.

Low-wage workers are less able to pay for insurance even if their employer offers it. Health specialists said they are the first to drop coverage when it becomes more expensive.

Income and coverage are closely linked in the bureau's data. About one-third of workers earning less than $15 an hour are covered by health insurance, compared with nearly two-thirds for people earning more. Data from the Commonwealth Fund show the trend may be starker among workers earning less than $10 an hour: while more than one-third of workers at small employers are offered coverage, only 13 percent take it. The acceptance rate is higher for low-income employees of large companies.

"To be fair, employers have swallowed a lot of these [premium] increases, so everyone's doing their best to hold the line and keep health insurance available, but the increases are so large that people are just feeling them," said Arnaa Alcon, a health economics researcher at the Women's Union in Boston, which has documented the rising burden of health care costs on low-income families in Massachusetts.

Employers are also dropping their health care coverage, particularly small businesses vulnerable to rising premiums in a declining economy. A recent trend among large corporations has been to hire more employees on contract or to offer coverage to only a select group of workers, health care specialists said.

Bureau data were derived from a nationwide survey of employers, who were asked how many of the people on their payrolls participated in their health insurance programs. The data include both full-time workers and part-timers, who are far less likely to have insurance.

"There is no question the number of people without insurance is rising both locally and nationally, and these numbers are another sign of that trend," said Andrew Dreyfus, president of the Blue Cross and Blue Shield of Massachusetts Foundation.

David Weinschrott, senior fellow at the conservative Hudson Institute in Indianapolis, said the weak economy has played a role in reducing coverage. His research has found that during the boom, more households reported they were covered by insurance. That number declined after the recession. "During that period of very tight labor markets, [employers], particularly those looking for highly skilled workers, were using that feature to bid people away from each other," he said. "During a recession, it's very difficult to cover the cost of rising healthcare."

Kimberly Blanton can be reached at blanton@globe.com.

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