Drop in Job-based Health Insurance

In Rocford, north of Grand Rapids a couple – Linda and Ken Brauer had no health insurance for years. Ken lost his job as a salesman in 2007. Linda and Ken Brauer went years without health insurance after Ken lost his job as a salesman in 2007. Ken became eligible for Medicare in January, but Linda, a social worker with a master’s degree had no luck landing a job which paid for health insurance. (She has to make it another year before she is eligible for Medicare.)

The couple depleted their savings when Ken lost his job by paying $18, 000 in paying COBRA health Insurance. Ken had heart problems since he was unable to afford regular health check-ups. She feels “It does not save money to leave people uninsured. We should not be more concerned about putting companies at risk than the lives of our fellow citizens.”

The Brauer’s are not the only ones, nearly 1.6 million residents of Michigan lost employer sponsored health coverage from 2000 to 2011. The economy also suffers as workers pay a large percentage on health insurance, increasing poverty.

Michigan at one time was ranked as one of the best states for providing jobs with health insurance by employers – though 850,000 jobs and benefits were lost in the last decade.

“Michigan still has higher percentage of people covered by employer-sponsored plans than the national average,” said Elise Gould, author of the EPI study. “It’s just that Michigan started out so much better. Now it looks like a middling state.”

Trying to pay for health insurance after a job loss can be a daunting task. The average premium for single coverage in an employer-sponsored plan last year was $5,615 and $15,745 for family coverage.

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The cost for people purchasing their own insurance can be even higher, prompting many to go without coverage and hope they don’t become seriously ill.

“Any of us can be one tumor away from a health-care disaster,” said Jan Hudson, a senior policy analyst at the Michigan League for Public Policy.

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The huge increase in the number of Michigan residents who have lost health insurance through their employers is mainly a result of the state’s dramatic job loss, particularly in the auto industry, which has traditionally offered excellent benefits.

Employers drop the cover for employees and their dependents, or they shift the onus on employees – who refuse to buy health cover as they cannot afford it, without benefits.

 “Employers can offer coverage but make it awfully difficult for their employees to afford it,” she said. “It’s an enormously complex issue.”

Michigan firms are slightly more likely than those around the nation to offer health plans, though the benefits are heavily influenced by the size of the firm.

“Most businesses try to offer health insurance as a way to attract and maintain good workers,” said Wendy Block, director of health policy at the Michigan Chamber of Commerce. “Employers cannot afford double-digit increases year after year.”

Businesses also are bracing for major changes under the Affordable Care Act that kick in next year.

“This year is going to be pretty much business as usual, meaning health care costs will rise three-to-four-times inflation,” said Scott Lyon, senior vice president at the Small Business Association of Michigan. “But it’s going to be a really different marketplace in 2014.”

Gov. Rick Snyder has asked the Legislature to approve the expansion, a decision that was cheered by groups pushing to get more Michigan residents covered by health insurance.

References:

Hannah Punitha (IRDA Licence Number: 2710062).

Rick Hagland, Feb 2013

Source-Medindia