Uninsured Unchanged in 2004, But Employment-Based Health Coverage Declined

October 2005, Vol. 26, No. 10
Paperback, 12 pp.
PDF, 867 kb
Employee Benefit Research Institute, 2005

Download Notes PDF pdf

Executive Summary

Continuing decline in employment-based health coverage: Among all individuals residing in the United States, just under 60 percent were covered by employment-based health benefits during 2004, down from almost 64 percent in 2000. This continues a downward trend that started between 2000 and 2001, following a period of increasing coverage dating from 1994.


Employment-based coverage is crucial: The level of employment-based health coverage is a critical factor, since the vast majority of Americans who have health insurance coverage obtain it through work (either their own jobs or a family member’s job).


Total uninsured rate stable in 2004: The total rate of the uninsured in America remained statistically unchanged in 2004 at just under 16 percent, since the decline in employment-based health coverage was largely offset by an increase in government-based public programs (primarily for the elderly, disabled, and children).


Children accounted for bulk of Medicaid growth: Most of the expansion in public coverage occurred in Medicaid and the State Children’s Health Insurance Program (S-CHIP).


Employment-based coverage decline spanned all groups: The percentage of workers, nonworking adults, and children with employment-based health benefits all dropped between 2003 and 2004. These trends are the result of a relatively weak labor market and rising health benefit costs. In response to these factors, small employers either continued to drop health benefits or required workers to pay more for health benefits when they were offered.


Erosion of employment-based coverage likely to continue: The erosion in employment-based health benefits is expected to continue at least until the unemployment rate drops below 5 percent and as long as the cost of providing health benefits continues to increase.