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Study reports trend will swell ranks of uninsured

San Diego Union-Tribune

Rising health care costs are causing more companies to drop coverage
for employees, a study has found.

Each 10 percent increase in premiums leads to roughly 1 million people
nationwide losing their employer-provided insurance, according to
the study released yesterday by researchers at the University of California
Berkeley and Working Partnerships USA.

Premiums have increased 11 percent nationwide and 13 percent in California
a year on average since 2000. If the trend continues, the study said,
there will be an additional 1.2 million uninsured adults in California
and an additional 6.2 million nationwide by 2010.

"This is further proof that the problem of uninsured workers
isn’t a static one but a moving one, going in a negative direction,"
said Bob Brownstein, policy director at Working Partnerships USA,
a nonprofit economic and public policy group.

The study, based on premium costs and census data, focuses specifically
on employer-provided benefits, the primary source of health coverage
for Americans younger than 65.

"Legislators and the governor need to respond to this,"
said Anthony Wright, executive director of Health Access California.
"Right now the pillar of our health care system is eroding."

In the past four years, the number of employers providing benefits
has dropped 4 percent nationwide and 2 percent in California.

Based on past trends, the study projects more than half the working
adults in California would be uninsured by 2010. Low-and middle-income
workers are two to four times more likely to lose their insurance
than higher-wage workers.

"What I found most compelling and disturbing is precisely where
we’ve seen jobs that are growing in this economy. These are areas
where we are seeing very sharp drops in job-based coverage,"
said Arindrajit Dube, a Berkeley researcher for the study.

Study leaders said that as the reduction of benefits becomes more
common, the trend could feed on itself as additional businesses drop
benefits to remain competitive.

Not all people who are dropped from an employer’s plan are likely
to get insurance on their own. As a result, researchers said employer
decisions could increase the number of uninsured and strain public
health programs, such as MediCal.

"Something needs to be done or this will continue to affect not
only the uninsured but the insured," Wright said.