The share of Georgians who got health insurance through an employer dropped sharply between 1999 and 2009, as rising costs prompted fewer small companies to offer coverage and the recession forced some workers out of jobs with benefits, a new study found.
Among Georgians under 65, 59.8 percent had employee health plans during 2008 and 2009, down from 69.3 percent during 1999 and 2000, according to the study released Tuesday by the Robert Wood Johnson Foundation.
The change was also fueled by a decline in the share of Georgia employees willing to pay rising premium and out-of-pocket costs for employer-based coverage.
The shift away from employer plans pushed slightly more Georgians to buy their own insurance or resort to government coverage such as Medicaid, the tax-funded program for low-income families. But the biggest jump was in the share of non-elderly Georgians without insurance, which climbed from 14.4 percent to 20.4 percent over the decade -- one of the steepest state increases and three points higher than the national average.
The federal health care overhaul passed last year has a goal of increasing work-based insurance, especially at small businesses, through a combination of tax credits for offering coverage and penalties for not doing so. Experts disagree about whether the law will achieve that goal, with some predicting employer-based coverage may further wane under the law.
“There are many people who believe that many parts of health care reform are going to increase costs,” said Tony Holmes, an Atlanta-based partner at Mercer, the global consulting firm. If costs continue to rise, some employers may decide that it’s a better deal for them to pay a fine instead of providing coverage, Holmes said.
Most employers won’t decide until all the details of the new health care law are final. “There are so many unknowns,” Holmes said.
According to Tuesday’s report, the declines in companies offering coverage -- along with the share of employees willing to pay for it -- were sharpest at small businesses. Thirty-seven percent of Georgia companies with less than 50 employees offered health coverage by the end of the decade, compared with 97 percent of the state’s employers with 50 or more workers.
“Any small employer will tell you having a competitive benefits package is crucial to attracting and retaining employees but there is only so much they can afford,” said Kyle Jackson, Georgia director of the National Federation of Independent Business.
The report found that the total cost of an average family health plan provided by an employer jumped from $6,165 to $10,824 over the decade. The share of that premium passed along to employees doubled over the decade, reaching $3,283. The average family deductible of $1,814 added to the already hefty health care tab facing most families.
At small businesses, the share of employees who agreed to pay for their company’s plan dropped from nearly 78 percent to about 72 percent over the decade.
The Robert Wood Johnson Foundation, which focuses on health issues, released the report along with the State Health Access Data Assistance Center, which conducted the research.
Julie Sonier, an author of the report, said the trends put pressure on public budgets when more people get coverage through Medicaid or rely on charity care at hospitals if they no longer have insurance.
“It’s not a good thing to see erosion in private coverage,” she said.
William S. Custer, a Georgia State University expert on health care, said declines in insurance coverage at work started before the economic downturn and have accelerated. While the trends are most pronounced among small businesses, he said the rising costs affect companies of all sizes.
“Smaller firms are the canary in the coal mine of health care financing,” Custer said.
The numbers show that the nation’s current system of paying for health care “is simply not sustainable,” he said. Custer said the rising costs and declines in coverage are the reason the health care overhaul was enacted.
Holmes, of Mercer, agreed that the problems paying for health care have been building for years.
“Before health care reform happened it was already a big issue,” Holmes said. “As costs remain out of control it is a top business priority to do something about it.”
If the federal health care law survives pending court challenges, it will establish new state-based insurance marketplaces for small businesses and people who buy their own insurance. The federal government will offer substantial subsidies to people who buy their own plans along with tax incentives for small businesses to offer plans. Some experts say that will lead to a significant jump in the number of small employees offering coverage.
The exchanges were designed to give individuals and small businesses the same clout that large companies have when buying coverage, while also requiring insurers to compete on the basis of both cost and quality.
But many experts say the law doesn’t do enough to address the underlying problem: the increasing cost of health care.
Holmes said employees should expect their share of health costs to keep rising. He said they also need to do what they can to stay healthy -- something companies will be pushing more in the coming years.
“You need to be accountable for your own health,” he said.
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