The Impact of the 2007–2009 Recession on Workers’ Health Coverage

April 2011
EBRI Issue Brief #356
Paperback, 20 pp.
PDF, 685 kb
Employee Benefit Research Institute, 2011

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Executive Summary

IMPACT OF THE RECESSION: The 2007–2009 recession has taken its toll on the percentage of the population with employment-based health coverage. While, since 2000, there has been a slow erosion in the percentage of individuals under age 65 with employment-based health coverage, 2009 was the first year in which the percentage fell below 60 percent, and marked the largest one-year decline in coverage.

FEWER WORKERS WITH COVERAGE: The percentage of workers with coverage through their own job fell from 53.2 percent in 2008 to 52 percent in 2009, a 2.4 percent decline in the likelihood that a worker has coverage through his or her own job. The percentage of workers with coverage as a dependent fell from 17 percent in 2008 to 16.3 per-cent in 2009, a 4.5 percent drop in the likelihood that a worker has coverage as a dependent. These declines occurred as the unemployment rate increased from an average of 5.8 percent in 2008 to 9.3 percent in 2009 (and reached a high of 10.1 percent during 2009).

FIRM SIZE/INDUSTRY: The decline in the percentage of workers with coverage from their own job affected workers in private-sector firms of all sizes. Among public-sector workers, the decline from 73.4 percent to 73 percent was not statistically significant. Workers in all private-sector industries experienced a statistically significant decline in coverage between 2008 and 2009.

HOURS WORKED: Full-time workers experienced a decline in coverage that was statistically significant while part-time workers did not. Among full-time workers, those employed full year experienced a statistically significant decline in coverage from their own job. Those employed full time but for only part of the year did not experience a statistically significant change in coverage. Among part-time workers, those employed full year experienced a statistically significant increase in the likelihood of having coverage in their own name, as did part-time workers employed for only part of the year.

ANNUAL EARNINGS: The decline in the percentage of workers with coverage through their own job was limited to workers with lower annual earnings. Statistically significant declines were not found among any group of workers with annual earnings of at least $40,000.

DEMOGRAPHICS: Workers with a high school education or less experienced a statistically significant decline in the likelihood of having coverage. Neither workers with a college degree nor those with a graduate degree experienced a statistically significant decline in coverage through their own job. Workers of all races experienced statistically significant declines in coverage between 2008 and 2009. Both men and women experienced a statistically significant decline in the percentage with health coverage through their own job.

IMPACT OF STRUCTURAL CHANGES TO THE WORK FORCE: The movement of workers from the manufacturing industry to the service sector continued between 2008 and 2009. The percentage of workers employed on a full-time basis decreased while the percentage working part time increased. While there was an overall decline in the percentage of full-time workers, that decline was limited to workers employed full year. The percentage of workers employed on a full-time, part-year basis increased between 2008 and 2009. The distribution of workers by annual earnings shifted from middle-income workers to lower-income workers between 2008 and 2009.