EBRI 12 14 5 4 Ii i0 2 938 13 6 d 2 T-58 Table 2 Table Table i3 wfor iIntroduction the Table th AFDC nonelderly children 3)and, . therefore, fail population, to qualify Medicaid have for sought eligibility either toAFDavoid C ois r probably this Medicaiso-called d. an import "hidden ant factor tax" on popul erosion ation;of private this percentage insurancedeclined coveragetoamong 65 percent children. in 1984, and edged up to 66 coverage among children -and the growing rate of noncoverage--probably also Other trends related to families with children also suggest that the loss (see Table 2). Relatively fast employment growth in low-coverage industries in the failure of these children to qualify for Medicaid. Although the 1984 percent reflectsinthe 1985. rising cost of both employer-sponsored health insurance and privately insured health care by negotiating charges with providers. As of insurance The coverage Percentamong of Children children, with in paHealth rticular, Insurance may continue. Coverage The (particularly in retail trade, and business and personal services) is likely from Various Sources, by Family Type, Deficit Reduction Act (DEFRA) and the 1985 Consolidated Omnibus Reconciliation individually purchased insurance. Total Nonagricultural Civilian Employment, Rates of Employment Growth employer Medicmanage aid.Work Medicaid their Statushealth ofisthe aplfederal-state aFamily n costsHead, more pand rogram rigorously, Poverty thatStatus, health financesc1985 are health providers care InThe 1985, Number 37 million and Percnonelderly ent of theAmeric Civiliaans n reported Nonagricultur noalhealth Populinsurance ation a growing Thenumber high rate of low-income of noncoverage single-p among arentchildren familiesin msingle-parent ay be an important families factor to continue; this trend may further erode the rate of employer-sponsored and Employer-based Health Insurance Coverage by Industry, 1985 Without Health Insurance in 1985, and Growth between 1982 and 1985 Family Type/ Act Summary (COBRA) and eConcludinK xpanded Medicaid Remarks coverage for poor children (currently, children are coverage services less Employer afrom for, ble plans any among to finance source; ha other ve cfree ove of categorically red these, carea growing for nearly people eligible number 35 million thatgroups, ofare wowere rkers unable children adults since to pay. and under 1982;children This, age in in largely further reflects reducing thethe highnumber proportion and proportion of single-parent of children families with health that are in health insurance among workers and their families in future years. THE CHANGING PATTERN OF HEALTH INSURANCE COVERAGE Work Status Number 1982 of 1985Private Employment Insurance Public 1985 Rate ofInsurance Percent Percent of AMONG NONELDERLY FAMILIES I Number of employment workers with under 1985 in of Family turn, employer age may 5) and further plans pregnant Children Number covered reducewomen, 88 access million Tot further alto cworkers, aEmployer re erosion for Number uninsured compared ofTot the al qualifying to population. 84 million income Increase in for poverty. 18. In In 1985, 1985, In 1985, however, nearlymore 20only percent thanabout one of half onehalf uninsured (55 percent) (51children percent) of all lived ofchildren children with a parent inliving (or, in in civilian, non-farm families. The number of people without health insurance. Children in singleparent families are five times as likely as workers Percent of change employer health Work Status (millions) Percent (millions) Percent 1982-1985 Head a (millions) Private Coverage Public Medicaid Uninsured by AFDC 1982. benefits Nevertheless, established the number by mostofstates workersiswithout likely employer-sponsored to continue to depress health Industr rarely, Providers Speculating y a may spouse) also about with intensify the (thous coverage future ands) cost-shifting from isall generally anworkers employer to smaller a hazardous plan. 1980-1985 employers Employer undertaking, who plplans an,are1985 and unable b families with income less than the federal poverty standard reported coverage insurance in these families has risen nearly 15 percent since 1982. The most single-parent children in two-parent families were families poor.to By be poor, comparison, and more the than poverty twicerate as among likely to Deborah J. Chollet, Ph.D. Medicaid insurance speculating be uninsured. coverage hasabout risenamong families' muchpoor faster future families thanability the withnumber to children. All finance with Children employer health care coveris age. not As a Total typically to negoti uninsured ateallow provider workers 30.3 discounts. to include 15.6% The dependents. high cost 34.8 of Increasingly, coverage17.4% available however, toworkers 14.9% small rfrom children apid Medic erosi in aid; ontwo-parent of34copercent veragefamilies hreported as occurred wasnoiicoverage am percent. ong workers from any and source. children.Among The number NoncoveraKe AmonK Children Senior Research Associate All workers 103,163 100.0% 8.3% 75.8% different. Since most private insurance coverage is provided by employer result, Tot Workers are employers, alrequired the in proportion toturn, contribute 55 13 discourages ..49of all allworkers 612 or 7many .1% .8partsmall with of62.0% the employerHsponsored businesses cost 17.0 of 16.0% from coverage 14.offering 714.1% health for health insurance 22.5 19.5% of children uninsured living workers in near-poor without he families alth insur (between ance coverage i00 percent grew and more125thapercent n 22 of Family head b 8.2 12.5 10.2 14.4 24.0 pl has benefits dependents. ans,eroded- Thethelow torafrom te their rate In of 1985, 78 of workers. employment percent Medicaid 54 percent in Incoverage is1982, 1983, an of important larger-establishment to two-thirds among 76 percent the factor of children in all in1985. workers explaining workers of The workers without number that theinrate health of of SpouseOther present workers 40.6 5.6 80. 13.4 7 High-c 75.8 over6.8 age 7.5industries 15.3 5.4 21.1 14.4 the federal poverty standard), 13 percent reported Medicaid coverage; 37 percent between 1982 and 1985; the number of uninsured children under age 18 In Among Thepart relatively allbecause children of highin theand the growing growing Unitednumber States, proportion of singleparent children of children of thefamilies, without working health poor the are Full-year worker 38.4 83.4 79.2 5.5 3.5 13.6 nonworker Mining poverty insurance percent suggests reported dependents coverage that noamong coverage covered there workers is939 by frvirtually om employer andanyamong source. 0.9% no plans dependent insurance has actually -4.1% children. option declined. for Inlow-income gener 88.8% aIn l, Nonworkers insurance Part-year benefits worker from 16.4 1.0 their own 51.4 19.1employer 35.6 were 17.8 either 20.1 self-employed 21.015.7 or 8.3 33.5 participated in an employer health plan were required to pay all or part of grew numberneaand rly percent 16 percent. of families In 1985, in ne poverty arly 20ispercent significof antly all greater children now under thanageat the insurance most likely is a mato tter be uninsured. of particularAmong concern. childrenIn in 1985,poor20families percent headed of all by a Manufacturing 20,879 20.2 -4.8 88.2 Nonworker Children c I.i 9.6 13.4 17.0 - Ii.i 64.6 19.760.0 15.6 25.9 Statement before working Transportaion, 1982, one would employer families expectplans with an expanding covered children,more economy ifthan theyto47 doimprove million not have rates nonworkers, access of insurance to an including employer coverage 36 employed the Adults cost for in firms dependents' with6.8fewer coverage. than 23.125The employees. surprisingly 6.7 high23.9 proportion of -1.8 18 full-year had no he worker, alth insur nearly anceone-half coverage (46from percent) any sour were ce. uninsured. These data The arehigh reported rate the beginning of the decade. Between 1979 and 1985, the number of people in children under age 18 were uninsured. The reasons for growing noncoverago the Select Committee on Children, Youth and Families communication Spouse absent 14.8 29.8 24.2 39.4 37.8 33.4 U.S. House of Representatives health in Table plan. i. The rate of noncoverage among children living with one or more million among and public workers children. utilities and their In 1985, families. 7,548 employer plans 7.3 covered 4415.7 million nonworkers, 87.5 and uninsured Full-year children worker living 8.1 with an 47.0employer-insured 40.8 15.7 parent may14.1 be related 40.3 to of noncoverage among poor children in worker families is the same whether the poor The families relatively with children low rate rose of Medicaid 25 percent, coverage and the among proportion children ofinfamilies poverty is among children probably include: (i) the growing number of low-income, Finance, insurance Part-year worker 1.9 22.5 14.1 51.6 49.3 31.2 Hearing on American Families in Tomorrow's Economy working fewer and real than parents est 35atemillion in poverty children. 7,005 is extremely 6.87 high-nearly half 16.9 had no coverage 86.1 from in Nonworker part due to the erosion 4.9 of qualifying 3.5 income - for 75.0 AFDC benefits 73.7 relative22.6 to In poor and near-poor families that have no private insurance and do not Source: the family worker is EBRI headed cost tabul ofaby tions coverage a single of the for parent Mdependents. archor1983 by two andNevertheless parents. March 1986 Current for somePopul (perhaps ation with children that are poor rose by four percentage points: more than single-parent families with children; (2) the cost of health insurance; and July I, 198F Wholesale trade 4,341 4.2 10.7 84.1 Surveys (U.S. Department of Commerce, Bureau of the Census). Professional and any private plan or Medicaid in 1985. Without access to Medicaid, these This expectation, however, is contradicted by recent history. Despite one-third qu the aliffederal y forofMpoverty edic insured aid, standard. children routine he living AFDC alth (Aid with care toan (including Families employer-insured with prenatal Dependent parent care) mChildren) ay or be one-fifth The erosion of all of people health in families insurance with coverage children amongarethepoor. nonelderly Concurrently, populationthe (3) the erosion of Medicaid coverage among the poor--including poor families related services 21,563 20.9 8.6 81.7 a Data exclude people under age 65 employed in the military or in Children in Families Below Poverty significant employment growth since the 1981-1982 economic recession, rates of families Public administration are largely without 4,995 access to insurance 4.8 coverage -6.5 of any type.87.6 withaCoverage griculture children. from andother members priva ofte their insurance families. (principally individually purchased is seriousl spouse), a federal-state y the neglected. level of cashRese family assistance arch income on health program ($30,000 services that or more automatically use inamong 1985)people suggests confers without Medicaid that an is a matter of concern both for private industry and public policy. People cost of Lower health coverage care among and health poor children insurance inhave families been increasing of full-year at workers an average bTotalThe family head 12.6 is the family17.0% or subfamily 12.4% memeber 52.7%with 51.5% the greatest 33.4% employer coverage have declined-especially among families with children. In Total, cover employee age) high-coverage contribution has also declined for 67,270 coverage since 1982. might 65.2% Again, have been the affordable. decline 4.2% in coverage 85.6%is health annual rate insurance of more has than repeatedly 9 percent- foundfaster that uninsured than the cost peopleof other use much consumer less without eligibility. earnings; health Most all insur other children ance family cover who age members qualify or other with forobvious Medicaid earnings means benefits are design of paayment do tedso through as have reflects much their lower rate of Medicaid eligibility, compared to children Spousesecondary present workers. 4.4 Family-hea30.4 d workers24.7include 33.5 unrelated 31.8 individuals 39.9 that are workers. 1985, healthVarious employer care than measures plans people covered havewithbeen fewer insur proposed ance, children, even to address absol when utely health private and statemployer aus s a or percent medic coverage alof most apparent among children, In 1982, nearly 13 percent of the nonelderly the Full-year AFDC program. worker Each 3.2 state determines 36.8 32.0 the income 22.3 ceiling that 21.1 qualifies45.0 difficulty obtaining access to needed, nonemergency medical care. When this goods in families and services, headed byanda nonworker faster thanoraverage by an adult familythat income. works The seasonally eroding or The 5rowth of single-parent families. The rising number of low-income, Low-coverage industries Part-year worker 0.4 30.3 18.5 38.1 34.3 37.5 Cpeople under age 18 that reported no earnings and were not the family head. conditions are similar. all categorically children, than eligible they families did in 1982. in that Reasons state for for this AFDC apparently benefits. include a apopulation mong workersandand nearly their9 percent families ofandchildren Medicaid reported coverage nonemployer of the poorprivate and ability Nonworker Dataof that families measure to0.9buy the he cost althof binsurance individualisinsurance reflected 73.5 coverage in 70.7 the loss are of 22.1 population does receive care and is unable to pay, health care intermittently. single-parent families In 1985, haspoor probably children contributed in singletoparent the growing familiesrate headed of by a Construction 6,987 6.8% 12.4% 66.2% near-Lpoor. Ret redistribution ail trade As aofnonp employment artisan 17,955 toward research industries organization, 17.4 that historically the 10.4Employee Benefit are 63.7 less coverage; in 1985, less than 12 percent of the nonelderly population and 7 priv full-year Spouse ate,absent non-employer worker were 8.2 less coverathan ge among half 9.8 as children likely 5.7 since as children 63.2 1982. in62.2 a nonworker 29.8 unavailable. providers- hospitals It is likely, and physicians--are however, that likely the cost to of shift individual the costscoverage of theiris noncoverage among children. In 1985, nearly 27 percent of all children under The views expressed in this paper are solely those of the author. Business and Full-year worker 2.2 21.5 14.5 36.4 35.5 46.2 They should not be attributed to the officers, trustees, members, likely to provide health insurance as an employee benefit. In addition, percent Research ofInstit children ute does reported not endorse coverageanyfrom particular such a plan. proposal. However, each of rising repair at services least as fast as 5,321 the cost of health 5.2 care as60.6 a whole. Between 66.01980 Part--year worker 1.5 14.6 9.4 60.4 58.8 30.7 care singleNo toparent priv stateately family automatically insured to have patients indexes Medicaidin qualifying coverage the form of income (35higher percent, to the charges. compared cost of to living. F7 age 18 lived in single-parent families; among children in poverty, nearly associates, contributors or subscribers of the Employee Benefit Personal services 4,352 4.2 13.4 50.3 Nonworker 4.5 2.3 77.5 76.7 21.2 Research Institute, its staff or its Education and Research Fund. Entert employment ainment in and small firms may be rising faster than employment in large these proposals, and others related to federal and state welfare reform, As The aErosion result, ofqualifying Private Health income Insurance in most states Coveragehas eroded relative to the and 1985, the cost of health care (as measured by the medical care component percent). two-thirds Finally, After (65the percent) adjusting erosionlived offorMein dthe icaid single-parent somewhat coverage higher am families. ongrate theof pooemployer r and Medcoverage icaid's recreation 1,278 1.2 22.1 59.4 firms. deserve serious If the faster consideration expansion by oftheemployment Congress and in low the coverage public. sectors Access to SOURCE:The Employee decline in Benefit employer-sponsored Research Institute coverage tabulations 8_nong workers of theand March their 1986 federal of the consumer poverty price standard. index)Inrose 1975,nearly the states' 52 percent--an average qualifying average annual income rateforof among poor children in two-parent worker families, the difference in Medicaid exclusion Employers, of thewho working are the poorprimary may be so important urce of pri invate the continuing insurance co decline verage am ofong Total, low-coverage 35,893 34.8% 17.0% 62.9% Current Population Survey (U.S. Department of Commerce, Bureau of the continues,Census). the aggregate rate of employer coverage among workers and their health care and responsible health care financing in the United States are dependents AFDC nearlywas9 percent. 71parallels percent Atof the the theredistribution same federal time,poverty theofproportion employment standard; ofone-half infamilies the United ofwith allStstates children ates. The declining proportion of workers and their dependents covered by coverage insurance between coveragenonworker among children. and workerOnly families about is halfcomparable of all poor to that children observed Children living with a single parent are more than twice as likely as a Data exclude people under age 65 employed in the military or in dependents issues of growing may continue importance, to decline. and may be among the most critical issues for Since Source: among in poverty children 1980, EBRIrose employment tabulations infrom single-parent I0inpercent ofindustries the March families. to nearly with 1986 historically 13 Current percent. Population low Persistent rates Survey ofincreases employer (U.S. in set I employer-sponsored Unless AFDC qualifying otherwise he indicated, income alth insurance at more all data than is are an79import percent basedantonofEBRI factor poverty. tabul in attions heIngrowing 1986, of the qualify agricult forureMedicaid; and members more than of their one third families. of poorThechildren family head without is the private family children in two-parent families to be uninsured. In 1985, one-third (33 Department of Commerce, Bureau of the Census); and U.S. Department of Marchor 1986 subfamily Currentmemeber Population with the Survey greatest conducted earnings; by theall U.S.other Department family members of families in the future. Commerce, Bureau of the Census, Statistical Abstract of the United coverage average (and (including median) ret qualifying ail trade,income construction, for AFDC and benefits business was services) less than has half number the insurance costof ofcoverage nonelderly health care failed people andtowithout health qualifyinsurance, hefor althMedic insuran acoupled id ce.and were with In 19uninsured the 82, declining employer plans Commerce, with earnings Bureau of arethe designated Census. Many as secondary of theseworkers. tabulationsFamily-head are also presented workers percent) of all children in single-parent families were uninsured from any 2 In Texas, for example, a family of three with a monthly income of $185 in States, 1987, p. 388. in: include "A Profile unrelated of theindividuals Nonelderly Population that are workers. Without Full-year Health Insurance," workers are EBRI 1986 would have failed to financially qualify for AFDC and Medicaid. grown incomemore status thanoffour families times with as fast children, as employment have probably in highcontributed coverage industries to the Issue the provided federal Brief health poverty No. insur 66 (May standard ance 1987). for (48 morepercent). than 67 percent As a result, of themany nonelderly poor families defined as workers that were either employed or sought work for 35 weeks throughout The cost theofyear. insurance The low coverage. levels ofThequadeclining lifying income rate ofthat private many insurance states set source, compared to 14 percent among children in two-parent families (see a Excludes agriculture, forestry, fisheries, and miscellaneous services. or more during 1985. b Statistically insignificant. b Includes wage and salary workers; excludes self-employed workers. EMPLOYEE BENEFIT RESEARCH INSTITUTE 2121 K Street, NW/Suite 860/VCashington, DC 20037-2121/Telephone (202) 659-0670