Texas Losing Job-based Health Insurance Faster than Most States

A new study from the Economic Policy Institute examines the continued decline in coverage through job-based health insurance. From 2000-01 to 2007-08, the percentage of Texans covered by employer-sponsored insurance declined 7.3 percentage points, from 59.7% to 52.4%.  The experience in Texas reflects a national trend, though the decline in Texas was more severe than in most states.  Low- and moderate-income Americans were hardest hit and saw the largest declines in job-based coverage.  Had the job-based coverage rate not fallen, another 1.5 million Texans would have had employer-sponsored insurance in 2007-08.

The continued erosion of job-based coverage is a disturbing trend that signals the need for change.  National health reform proposals being debated in Congress do two things that will help: (1) shore up employer-sponsored insurance, and (2) provide real access to affordable coverage for people who do not get insurance through work. 

National health reform bills provide different incentives to large and small employers to help shore up employer-sponsored insurance.  Almost all large employers offer coverage today, so the bills provide a meaningful incentive for large employers to not drop their coverage by requiring some large employers to offer insurance or pay a penalty.  For small employers, most of whom do not offer coverage today, there is no penalty for not offering coverage.  Instead, bills provide generous tax credits to help eligible small businesses afford to offer coverage.

Even if the proposals above stop the hemorrhaging in employer-sponsored coverage, many still won’t have access to it.  All health reform bills allow such individuals to buy coverage through a health insurance exchange, where they can’t be turned down for pre-existing conditions, and low- and moderate-income individuals will pay premiums on a sliding scale.