Across the nation, employer-sponsored health plans have decreased radically in the past decade. Small and large business owners alike could give you one reason why: they’re being priced out of the market. With premiums leaping to unprecedented heights, many employers simply can’t afford to offer the coverage their employees have depended on in the past.
None of this is new news, but a recent study conducted by the Robert Wood Johnson Foundation confirmed that Texas is a good pace behind the national average when it comes to health insurance options.
In 2000, 62 percent of Texas employers provided health insurance. Today, that number has dropped to just 51.5 percent — well below the 61 percent national average.
A history of limited coverage
Admittedly, Texas has always been behind the curve when it comes to the availability of health insurance. Back in 2000, 69 percent of employers nationwide offered health care coverage, a seven-point increase on the Texas numbers. And while every state has seen a decline in employer-sponsored programs, Texas is one of just 12 states that have dropped by 10 percentage points or more.
Middle to low-income families have experienced the brunt of this blow, particularly those family members who aren’t the primary breadwinners. Lynn Blewett, director of the University of Minnesota’s State Health Access Data Assistance Center, helped conduct the Foundation’s study and said that, in today’s market, dependents have the least access to care because many employers are choosing to drop them from their policies.
The numbers explain why: The price of covering these dependents is rising faster than annual inflation. The average Texas family plan went from approximately $6,400 per year in 2000 to $11,000 per year in 2009. That’s an increase of more than 6 percent each year.
“Many employers are deciding they can’t afford to offer coverage, and new employers coming on the market are deciding to wait to offer coverage,” Blewett said.
The HCR effect
How health care reform will impact this coverage crisis is still up for debate. A controversial study put out by McKinsey earlier this year concluded that 30 percent of employers will drop health care coverage in 2014 when the full scope of the law is put into effect.
Blewett, however, agrees with a different study, released recently by the Urban Institute, which predicts the opposite. She says that more employers will provide coverage in 2014.
“There will be more affordable coverage options offered through the exchange. There’ll be a place to go for small employers to look for coverage that best meets their needs,” she said.
Agents across the country fall on both sides of the debate, although most worry that they’ll become less relevant. ASJ’s recent Employee Benefits Market Study revealed that 47 percent of benefits agents thought the Affordable Care Act would hurt their business. Only 18 percent predicted health reform would be beneficial.
Look for the full results of this study in ASJ’s August issue. Until then, in Texas as in other states, agents will stay most relevant by staying best informed.
Past Texas news coverage from ASJ:
Texas Medicaid Reform Bill Moves Forward