NJPP Monday Minute: 11/16/09 House bill would provide a safety net for those losing health insurance

Over the last seven years, New Jersey employers dropped insurance coverage for workers at a rate faster than the national average, according to economist Elise Gould in her new report Employer-Sponsored Health Insurance Erosion Continues. The nearly seven percent drop (from 75.6 percent to 68.7 percent) is the 14th largest percentage decline in the nation.

"No demographic or socioeconomic group has been spared from the erosion of employer sponsored insurance over the 2000s," states Gould, Director of Health Policy Research at the Economic Policy Institute. "Workers across the wage distribution, in small and large firms alike, and even those working full time and in white-collar jobs have experienced losses."

Although all income groups across the country have experienced some loss of benefits over this time period, lower income households have been the hardest hit: the coverage rate for the bottom 40 percent of income earners dropped by about ten percentage points, while for the top 40 percent it declined by three percentage points.

In New Jersey, children covered under a parent's insurance experienced the greatest decline. That number fell to 67.1 percent in 2007-2008 from 76.2 percent in 2000-2001, a 9.1 percentage point drop. Fortunately, many of these children were able to obtain health coverage because of recent improvements in Medicaid and NJ FamilyCare that expanded outreach and eliminated some barriers to the programs.

Unfortunately, adults without children are not eligible for NJ FamilyCare, no matter how poor they are. In addition, only parents with incomes up to 200 percent of the federal poverty level ($44,100 for a family of four) are eligible to receive NJ FamilyCare benefits for themselves, although children in the same size family are eligible when parents earn up to 350 percent of the federal poverty level ($77,175). Even though most are employed, about half of all New Jersey's low-income non-elderly adults do not have insurance, compared to a quarter of low-income children who are uninsured. These adults must usually purchase health insurance on the private market, but often cannot afford the high cost.

These are some of the reasons why national health reform is critical for New Jersey. Many small businesses want to provide insurance to attract qualified employees, but the cost is often prohibitive. The health reform bill that passed in the House (HR 3962) would address these problems in several ways by:

• Requiring large employers to provide health coverage or pay a fee
• Limiting how much insurance companies can increase premiums each year
• Providing health insurance subsidies to low and middle-income households, including childless adults
• Establishing a public insurance option in every state which would create more choice and competition
• Providing tax credits to small employers as an incentive for them not to drop coverage

People's health should not depend on who they work for or how much money they make. Individuals should have more opportunities for affordable coverage, but large businesses must also share in the responsibility to effectively and equitably provide coverage to their employees as detailed in the House bill.