Erosion of California’s Job-Based Insurance Highlights Need for Health Care System Reforms, Says UCLA Report

The continued erosion of California's job-based health insurance — which the vast majority of insured residents rely upon to pay for medical services — is a clear indication of the need to reform the state's health care system, according to a new report from the UCLA Center for Health Policy Research.

The report notes that 6.5 million non-elderly Californians, 20 percent of the state's population, were uninsured for all or part of 2005. While this rate is lower than the 21.9 percent uninsurance rate in 2001, job-based health insurance — the foundation of coverage for the non-elderly population — continued to decline, falling from 56.4 percent in 2001 to 54.3 percent in 2005.

Gov. Arnold Schwarzenegger, who took part in a morning press conference today at the UCLA School of Public Health to announce the findings, cited the report as further proof that the state must address the inadequacies of its current health system.

"This research underscores everything we have been talking about. Coverage is eroding because costs are out of control for businesses and workers, making it harder for them to compete," Schwarzenegger said. "All this points out once again that we need comprehensive health care reform that insures everyone and guarantees all Californians have access to affordable and reliable care."

The decline in employment-based insurance occurred despite strong economic growth and falling unemployment during this period. Although more affluent workers' job-based coverage held steady, coverage rates for moderate- and low-income workers plummeted.

The overall improvement in the state's uninsurance rate was the result of expanded enrollment of children in public insurance programs such as Medi-Cal and Healthy Families and the local public-private program Healthy Kids.

"What we're seeing is the rapid erosion of our health insurance system," said lead author E. Richard Brown, director of the Center for Health Policy Research and a professor at the UCLA School of Public Health. "Without substantial reform, the coverage of millions of working families and individuals will be threatened as rising health care costs continue to make employment-based insurance unaffordable for workers and employers alike."

The decline in employment-based insurance was steepest for moderate- and lower-income workers and their families. Job-based coverage plummeted for adults and children with family incomes below 300 percent of the federal poverty level ($60,000 a year for a family of four in 2005).

The findings of the report, "The State of Health Insurance in California: Findings from the 2005 California Health Interview Survey," are based on California Health Interview Survey data from 2001, 2003 and 2005. The full report is available on the center's Web site at www.healthpolicy.ucla.edu.

Other findings from the report include:

·         More than eight in 10 of the state's uninsured are employed residents and their family members. Two-thirds (more than 4.3 million) work full time or are dependents of those who work full time.

·         If job-based insurance coverage had not fallen from 2001 levels, an additional 678,000 Californians would have job-based coverage.

·         Uninsurance rates differ among racial and ethnic groups. Non-elderly Latinos have the highest rates of uninsurance (33.8 percent), followed by American Indian/Alaska Natives (22 percent), Asian Americans and Pacific Islanders (17.7 percent), African Americans (15.3 percent) and whites (12.5 percent).

The report was funded by grants from the California Endowment and the California Wellness Foundation.

"This report provides further evidence why seven in 10 Californians believe major changes are needed to fix our health care system," said Dr. Robert K. Ross, president and chief executive officer of the California Endowment. "Without the necessary health reforms put in place, we will continue to put Californians in jeopardy of losing health care coverage."

"California's precarious system means that lives of millions of Californians without health insurance can be devastated by illness or injury because they either will not have access to medical care or they will be stuck with crushing medical debts," said Gary L. Yates, president and CEO of the California Wellness Foundation.

Since it was first conducted in 2001, the California Health Interview Survey has been an essential tool for policymakers, researchers and health advocates, providing a detailed snapshot of the complex health needs of California's diverse population. The survey is a collaborative project of the UCLA Center for Health Policy Research, the California Department of Health Services and the Public Health Institute.

The UCLA Center for Health Policy Research was established in 1994 and is one of the nation's leading health policy research centers. It is also the premier source of key health policy information for California. Directed by E. Richard Brown, the center is based in the UCLA School of Public Health and is also affiliated with the UCLA School of Public Affairs.

-UCLA-

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Media Contact:
Garrison Frost
310-794-0930
[email protected]

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