Texas Employer Insurance Rate Dropped Sharply Over 10 Years

Rapidly rising health-insurance premium costs have caused a significant erosion in employer-sponsored insurance (ESI) in Texas and the U.S., according to a Robert Wood Johnson Foundation study released Thursday.

The percent of Texans covered by ESI declined from more than 62 percent in 2000 to 52 percent in 2011. That rate was the third lowest in the U.S., with only New Mexico and Louisiana trailing the Lone Star state. Nationally, about 60 percent of Americans are covered by ESI, a decline of about 10 percentage points.

ESI coverage is heavily dependent on company size and household income.

For Texans earning less than twice the federal poverty guidelines—or about $47,000 for a family of four—ESI coverage fell from about 35 percent to less than 25 percent during the decade. For those earning twice that much, about 86 percent had ESI coverage—a rate that fell by only about two percentage points.

Less than 30 percent of Texas firms with fewer than 50 employees offered health insurance in 2011, compared with about 94 percent of state companies with more than 50 employees.

The cost of premiums for single and family coverage in Texas doubled between 2000 and 2011. Single coverage rose from $2,482 to $6,424 while family coverage rose from $5,075 to $14,715. The employee share of those premiums stood at 20 percent for single coverage and 30 percent for family coverage in 2011. Both rates rose by three percentage points.

One bright spot was ESI coverage of adults between the ages of 19 and 25. Coverage rose from about 27 to 29 percent in Texas. That was attributed to a provision in the Affordable Care Act that allows this those under 26 to remain on their parents’ insurance policy.

“Employers continue to shoulder about the same percentage of costs for employees’ health insurance as they did 10 years ago, but everyone’s costs have increased dramatically,” RWJF President and Chief Executive Officer Risa Lavizzo-Mourey said in a written statement. “Higher costs naturally translate into fewer employers offering insurance coverage, and fewer employees accepting it, even when it is offered.”

Predictions of the effect of the ACA on ESI are mixed. A recent Towers Watson survey of more than 500 companies found that none planned to stop offering insurance because of the law. According to a separate report released Wednesday by the International Foundation of Employee Benefit Plans, the percentage of companies that said they would definitely offer health insurance in 2014 when the exchanges open rose from 46 percent in 2012 to 69 percent this year. However, the Congressional Budget Office projected earlier this year that 3 million fewer Americans would receive ESI under the ACA.

Steve Jacob is editor of D Healthcare Daily and author of the new book Health Care in 2020: Where Uncertain Reform, Bad Habits, Too Few Doctors and Skyrocketing Costs Are Taking Us. He can be reached at steve.jacob@dmagazine.com.

Posted in Insurance/Benefits, News.