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Ethnicity and income drive health coverage

Buying group health insurance through work is a convenient route to coverage for many Americans, and also typically less expensive than buying similar coverage on one's own. Group health plans are also beneficial to employers in attracting and retaining a work force.

The characteristics of employers that offer plans can be broken down this way: Benefits are more commonly offered to workers in goods-producing industries than in service industries, and more often in medium-sized and large private-sector businesses (100 or more employees) than in smaller businesses, according to 2006 statistics from the Bureau of Labor Statistics (BLS). Workers in metropolitan areas have higher rates of access to benefits.

The BLS reports that 71 percent of workers in private industry had access to group health plans and 52 percent participated in 2006. Clearly not everyone offered a plan chooses to take it, and socioeconomic factors tend to drive that decision:

  • Income: Those who earn higher incomes are more likely to be eligible for health benefits and also to participate in health insurance plans when they are offered. For example, 30.8 percent of workers who earned less than $10,000 per year were eligible for employer-sponsored health benefits in 2002, compared with 92.4 percent of workers earning $50,000 or more per year, according to the U.S. Census Bureau's "Survey of Income and Program Participation" (SIPP). Then, 91.8 percent of workers who earned $50,000 or more per year took coverage when it was offered, compared to 65.5 percent of workers who earned less than $10,000 per year.
  • Age: As age increases, eligibility and coverage rates for employer-based health benefits generally increase as well: 29.1 percent of persons age 18 to 20 year had access to health insurance benefits, while 76.5 percent of those age 55 to 64 had access to such benefits, according to SIPP. The participation rates for those same age categories were 16.0 percent and 67.4 percent, respectively. The highest rates of eligibility (80.1 percent) and participation (69.3 percent) were for workers age 45 to 54.
  • Race: Racial and ethnic minorities are less likely than whites to participate in group health insurance even when it is offered: 32.4 percent of Hispanics did not have health insurance in 2002 (employer-provided or not), compared with 20.2 percent of blacks, 18.7 percent of Asians and 10.7 percent of non-Hispanic whites, according to the 2003 "Current Population Survey Annual Social and Economic Supplement" from the Census Bureau.
  • Occupation: White-collar workers are more likely to be insured than blue-collar workers. However, workers who are members of a union are more likely to be covered by health insurance than nonunion workers, according to the Employee Benefits Research Institute (EBRI).

Workplace coverage carries the health insurance burden

Employers have long carried the burden of being the primary providers of health insurance, and they say they expect to continue to do so, no matter what health care plan politicians may pass, according to EBRI research.

Analysis from EBRI released in February 2008 shows that group health coverage remains fairly stable in terms of the number of workers eligible for coverage, the number who take it and the share paid by workers. Unless you're talking about small businesses: EBRI says that the percentage of employers with fewer than 200 employees that offer benefits dropped from 68 percent in 2000 to 59 percent in 2007. Also, retiree health benefits are on a steep decline as employers cut back.

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