ALBANY — The proportion of New Yorkers with health insurance provided by their employers has plummeted, according to a new study. At the same time, government-subsidized care is taking on a record load, slowing the state’s economic recovery and likely leaving more families uncovered for at least months.
The rising cost of Medicaid-paid health care is a major driver of state government’s rising deficits, which are forcing cuts in education and other services and prompting layoffs that further slow the economy.
Meanwhile, the private sector is sagging under the cost of providing health care, with 66 percent of companies saying they are struggling a great deal or somewhat to maintain coverage for employees. One in 5 companies avoided hiring because of health care costs, according to the study’s survey, and 1 in 4 companies either reduced or froze wages to pay for health care.
The report from the New York State Health Foundation said just 58 percent of New Yorkers are now covered by employer-sponsored health care. That’s down from 69 percent in 2001 after decades of gains.
Although 70 percent of employers continue to offer health care coverage in New York, fewer employees are eligible for the coverage, more costs have been shifted to workers often faced with fewer choices of care, and fewer employees are choosing to buy into coverage that’s available.
“Employer-sponsored health insurance is an eroding pillar of our coverage system,” said James R. Knickman, president and CEO of private foundation NYS Health. The group sought the study by the independent research National Opinion Research Center at the University of Chicago.
“New York should be leading the nation instead of following it,” Knickman said. “The sharp decrease in employer-based health insurance is a wake-up call to both publicly and private sector leaders of the need to shore up the foundation of our insurance system.”
The study also found that in 2009 health insurance premiums increased 7.3 percent in New York state and that 66 percent of companies in the state stated they were struggling to afford health insurance to their workers. The foundation was created with the charitable funds from the Legislature’s approval of the privatization of Empire Blue Cross/Blue Shield a decade ago and aims to increase access to affordable, high-quality health care.
The study released earlier this month found employer-based health care coverage is about 10 percent higher in New York than the national average and an average copay for a non-preferred drug rose form $19 in 2001 to $46 in 2009.
“This survey is the first evidence of how New York’s employers are responding to the economic downturn,” said Jon Gabel, senior fellow at the research center.
“During periods of high unemployment, it’s not unusual for employers to cut back on benefits, reduce the generosity of coverage, or expect workers to absorb higher costs,” Gabel said. “New York’s situation may get worse before it gets better, given the pace of the economic recovery.”
Many families have and will turn to New York state’s Health Department.
“It’s not surprising given the economy is very difficult and employers have to make choices,” said Health Department spokeswoman Claudia Hutton. “We hope that under federal health care reform, someday this won’t be a problem at all.”
The federal law is expected to expand coverage to 32 million Americans who now are uninsured. It also greatly expands the Medicaid program for the poor.
A year ago, 4.3 million New Yorkers received health coverage through Medicaid and its many programs that serve the poor, the working poor, and children under the Family Health Plus program. Now there are 4.7 million receiving Medicaid-paid services.
Hutton said that number includes people who lost their employer-sponsored coverage and needed to continue coverage until they could land another job and qualify for benefits.
The report found that 80 percent of employers would be willing to help employees who qualify to use a tax credit through payroll deductions to help pay for insurance.