Health Insurance Coverage in the United States

Paul Fronstin, Ph.D.

Director, Health Research and Education Program

Employee Benefit Research Institute

Copyright© - Employee Benefit Research Institute Education and Research Fund, 1978-2008. All rights reserved.

The information contained herein is not to be construed as an attempt to provide legal, accounting, actuarial, or other such professional advice. Permission to copy or print a

personal use copy of this material is hereby granted and brief quotations for the purposes of news reporting and education are permitted. Otherwise, no part of this material may be

used or reproduced without permission in writing from EBRI-ERF. 

2

Health Insurance Sources, 2007

175.5

26.5

41.4 39.6

11.0

45.7

0

20

40

60

80

100

120

140

160

180

200

Employment-Based

Nongroup Private Medicare Medicaid/SCHIP Millitary Uninsured

mill

ions

Source: EBRI estimates of the March 2008 Current Population Survey.

3

Health Insurance Sources, 1999 & 2007

63.9%

9.7%13.3%

10.3%

3.1%

14.0%

3.7%

58.6%

8.9%

13.8% 13.2%15.3%

0%

10%

20%

30%

40%

50%

60%

70%

Employment-Based Nongroup Private Medicare Medicaid/SCHIP Millitary Uninsured

Source: EBRI estimates of the March 2000 & 2008 Current Population Survey.

4

Spending Sources, 1990-2006($2.1 Trillion Spent on Health Care in 2006,

54% Private/46% Public)

33%

19%

8%

15%

10%

15%

33%

15%

9%

17%15% 15%15%

34%

12%

7%

19%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Private insurance Out-of-pocket Other private Medicare Medicaid Other pub

1990 1999 2006

Source: Employee Benefit Research Institute estimates from CMS.

5

But Employer Coverage Dominates Coverage

(Why Coverage is Offered)

• Voluntarily provided (except MA and HI)• Business case• Competitive labor market – recruitment &

retention• Wellness, prevention, DM have positive effect on

worker health & productivity• Despite view on bottom line – role of employer is access

6

Percentage of Employers Offering Health Benefits, by Firm Size,1996-2007

63% 60%

59%59%

59%

65% 68%66%

99%98%98%99%98%98%99%99%99%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

3-199 Workers 200+ Workers

Source: Kaiser Family Foundation.

7

Percentage of Children, Under Age 18 With Employment-Based Health Benefits,

Medicaid, & Uninsured, 1994-2007

56.8%57.1%57.9%58.4%61.6%

63.4%64.4%65.9%65.2%64.5%

63.7%62.9%59.3%

58.9%

28.1%27.1%26.7%27.0%26.4%

23.9%22.7%20.9%20.3%20.1%20.8%22.1%23.5%23.2%

11.0%11.7%10.9%10.5%11.0%11.2%11.3%

11.6%12.5%13.9%13.6%13.6%12.7%13.1%

0%

10%

20%

30%

40%

50%

60%

70%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Employment-based Medicaid/SCHIP Uninsured

Source: EBRI estimates from the March Current Population Survey.

8

Health Plan Enrollment, 1988 & 2007

Source: KFF/HRET.

73%

21%

16%

57%

11%

13% 5%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2007

1988

FFS HMO PPO POS Account-based

9

Health Reimbursement Arrangement (HRA)

• Employers started to offer in 2001• Exist under then current law• Employer provided notional account that allows for pre-

tax reimbursement of medical expenses.• “Typically” combined with a high-deductible health plan.• Employer funded & owned

– Employee contributions not permitted.

• Unused balanced can roll over.• Preventive care can be carved out.

10

Health Savings Account (HSA)

• 2003 Medicare Modernization Act• Allows for tax-free accumulation of savings

– Tax free contribution.– Tax free accumulation.– Tax free withdrawals for health care services, COBRA and LTCI premiums,

retiree health premiums for Medicare-eligible retirees.

• Qualified health plan– Self-only: Minimum $1,100 deductible, $5,500 OOP max.– Family coverage: Minimum $2,200 deductible, $11,000 OOP max.

• Contributions– Self-only: limited to $2,900 max.– Family coverage: limited to $5,800 max.

• Catch-up contributions allowed once age 55 of $1,000– Phased-in by 2009.

11

Non-Group (Individual) Insurance

• 7% of <65 population or 18 million individuals.• Typically for those who do not have access to

employer coverage and don’t qualify for public programs.

• On average, more costly than employer market because of higher admin costs.

• Individuals usually subject to medical underwriting.

12

Who Are The Uninsured?

• Workers or their dependents• Minorities• Lower income• Younger• Male• Employed in trade and service sectors• Employed less than full time full year• Employed at small firms• Resides in South and Southwestern U.S.• Recent immigrants

13

Reasons Uninsured Workers Are Not Covered by Own Employer's Health Plan,

Wage and Salary Workers Ages 18-64, 2005

63%

16%

21%

0%

10%

20%

30%

40%

50%

60%

70%

Employer does not offer coverage Employee is ineligible for plan Employee chose not to be covered

Source: Employee Benefit Research Institute estimates based on data from the February 2005 Current Population Survey.

14

Reasons Uninsured Workers Choose Not to Participate in Own Employer's Health Plan, Wage and Salary Workers Ages 18-64, 2005

73%

4%

23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Plan too costly Does not need or want coverage Other

Source: Employee Benefit Research Institute estimates based on data from the February 2005 Current Population Survey.

15

Reasons Uninsured Workers are Ineligible for Own Employer's Health Plan

Wage and Salary Workers Ages 18-64, 2005

31%

9%

44%

17%

0%

10%

20%

30%

40%

50%

60%

Waiting period not completed Contract or temporaryemployee

Part-time employee Other

Source: Employ ee Benef it Research Institute estimates based on data f rom the February 2005 Current Population Surv ey

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