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Thu April 11, 2013
Employer-provided health insurance dips 15% in Michigan
Michigan workers are losing their health-care coverage at a greater rate than any other state.
In 2000, about 78 percent of Michigan workers got insurance through their employer.
By 2011, that fell to about 63 percent.
Lynn Blewett is a University of Minnesota professor who took part in the national study funded by the nonprofit Robert Wood Johnson Foundation.
"We wanted to get a baseline of employer-sponsored coverage before the Affordable Care Act fully kicks in in 2014," Blewett says.
She says those who could afford it least were the most affected by the loss of health coverage.
"These are small employers, low-wage firms, so it's workers who have minimum wage or slightly above minimum wage, those are the ones that were hit the hardest," Blewett says.
Blewett says annual health-insurance premiums nearly doubled over the past decade causing many employers to drop the benefits.
"It went from $2,600 in premiums a year to $6,500 per year," she says. "Family coverage cost about $5,000 ten years ago; that's gone up to about $14,000 annually."
For many people, that was the breaking point.
"When you're living from day to day, or trying to make your mortgage or rent payment, if your health insurance premiums are almost as much, you have to decide what's going to go," Blewett says.
She also says more employers are eliminating coverage for spouses and dependents.
The premium increases are attributed in part to rising health care costs, but Blewett says the recession played a big role.
"Michigan suffered, and some of those employers are not coming back."
She says large and small employers were impacted, but smaller businesses were hardest hit because they may already have been on the margins of providing health care coverage.
Things may change when the ACA takes effect, Blewett says.
"We're all sort of projecting how employers are going to act. One thing we know is employers in a competitive market will provide benefits. I think we'll see some employers dropping out, but some may offer coverage through the exchange."
Blewett says provisions under the ACA can be complicated.
"Employers with up to 25 employees will qualify for a tax credit if they offer coverage through the exchange," she says. "If you're under 50 employees, there's no penalty if you don't offer insurance, but if you have 50 or more employees, there is a penalty," she says.