Employer-based insurance is less extensive than believed, says health insurance expert

“Private employment provides less health insurance than believed,” says Merton C. Bernstein, a founding board member of the National Academy of Social Insurance and the Coles Professor of Law Emeritus at Washington University in St. Louis. His current comments on health insurance in the U.S. follow:


“Senator Olympia Snowe sounded a common theme that ‘There are approximately 170 million Americans that receive [health insurance] coverage through employers.’ Many people, perhaps most, think that means private employment is doing the job. They hear that 85 percent of the population is insured and covering the remaining small group should not imperil what most already enjoy,” Bernstein says.

“More than that, the notion is strong that a large segment of employees turn down employer-offered insurance; insurers call them ‘the invincibles,’ young, brash people who believe themselves impervious to medical needs.”

Bernstein notes that health economists Alain Enthoven and Victor Fuchs present a different picture. Based on reports from the Employee Benefit Research Institute, they find that employer-based health insurance has been declining for over two decades. They conclude that administrative costs for selecting and administering private insurance plans make it unaffordable for a larger role.

“The biggest dose of reality comes from the Bureau of Labor Statistics,” Bernstein says. “It reported in August, 2008 that a larger proportion of public employees had employment-based health insurance than private employees.”

According to the report, medical care benefits were available to 71 percent of private industry workers compared with 87 percent of government workers, and about half of private industry workers participated in a plan compared to nearly three-quarters of government workers.

“The bottom line is that private employees account for the largest group of the uninsured,” Bernstein says.