October 1, 2003
Jeanne Lambrew, Sherry A. Glied, Sarah Little
The Growing Share of Uninsured Workers Employed by Large Firms, Sherry Glied, Jeanne M. Lambrew, and Sarah Little, The Commonwealth Fund, October 2003
A generally unreported phenomenon in recent years is the increasing number of U.S. workers in large firms who lack health insurance. Although large employers are much more likely than small ones to offer health coverage, recent evidence suggests that large-firm workers and their dependents comprise a significant and growing share of the working uninsured. As of 2001, more than one of four (26%) of the nation's uninsured--nearly 10 million Americans--worked for firms with 500 or more employees or were dependents of those workers.
In their Commonwealth Fund report, The Growing Share of Uninsured Workers Employed by Large Firms
, Sherry Glied and Sarah Little of Columbia University and Jeanne M. Lambrew of George Washington University identify several workforce changes contributing to this trend: declines in manufacturing jobs and unionization rates, restrictions placed on benefit eligibility, higher employee premium contributions, service industry trends, and the changing structure of large corporations.Scope of the Problem
The 9.6 million uninsured Americans who worked in, or had a family member working in, a large firm in 2001 exceeded the number of low-income uninsured children targeted by the State Children's Health Insurance Program (CHIP) (6.3 million), the number of unemployed and uninsured adults (3.9 million), and the number of older adults ages 55 to 64 lacking insurance (3.2 million).
From 1987 to 2001, the proportion of uninsured workers who were employed by firms with 500 or more employees grew from 25 percent to 32 percent. During the same period, the proportion working in small businesses (fewer than 100 employees) or mid-sized ones (100 to 499 employees) declined.Low-Wage Workforce Most Affected
Generally, uninsured workers working for large employers, much like their counterparts in small employers, have low incomes and are less likely to be married than insured workers. Nearly half (46%) of low-income workers working for large employers had a time uninsured during the year (see figure). Compared with insured workers in large employers, uninsured workers are more likely to work part-time and be employed in industries that are less likely to offer coverage.Policy Implications
The authors suggest that to reduce the number of uninsured, policymakers will have to address growing gaps in employee health coverage at large firms. Reforms to achieve this goal include removal of barriers to coverage in firms that generally offer health benefits (e.g., waiting periods and restrictions for part-time workers); allowing large-business workers to participate in alternative group health coverage options (e.g., the Federal Employees Health Benefits Program); and requiring that all large firms offer and possibly contribute to coverage of employees.