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Worker health benefits shrink

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San Francisco Chronicle

Barely half of working Californians will have job-based health insurance
in 2010 if rates keep rising at current levels, according to a study
released Wednesday by UC Berkeley researchers.

Employer-paid coverage will drop to 53 percent of the state’s working
adult population in 2010 from 58 percent in 2004 if premiums continue
to rise by 10 percent a year, researchers reported in the study, which
was conducted by UC Berkeley’s Center for Labor Research and Education
and Working Partnerships USA.

The report found lower-paid workers will be hit hardest, pushing an
estimated 1.2 million Californians into the ranks of the uninsured
and an additional 400,000 into taxpayer-supported programs such as
Medi-Cal and Healthy Families by 2010. Nearly 7 million Californians
are uninsured, according to 2004 U.S. Census figures.

As health premiums have soared in recent years, a growing number of
employers have pushed more of those costs onto their workers in the
form of higher copayments and deductibles along with less-comprehensive
coverage. The report’s researchers fear more companies will drop coverage
entirely.

"For middle-income and low-wage workers, job-based coverage is
increasing becoming completely unavailable," said Bob Brownstein,
policy director for Working Partnerships, a nonprofit labor research
group. "This situation places an enormous number of working families
… at grave risk of economic or medical crisis."

By 2010, more people above 300 percent of the federal poverty level
will be uninsured than have employer-sponsored coverage, the report
found. A family of three at 300 percent of the poverty level makes
about $46,000 a year.

The report doesn’t paint an exaggerated sky-is-falling scenario, said
Tim Biddle, senior vice president in the San Francisco office of the
Segal Co., an employee-benefit and actuarial consulting firm.

"The sky is falling," Biddle said. "Employers are starting
to hit the wall in what they can afford in terms of health care."

Biddle said a projected increase in health insurance of about 10 percent
a year for the next three to five years is reasonable. While increases
in premiums have moderated slightly in the past year or two, the causes
of higher rates such as advancements in medical technology and hospital
costs continue to rise, he said.

Fewer employers will offer coverage unless changes occur on a policy
level, the study’s authors concluded. "Those firms that are still
providing coverage have to face escalating costs and competitors that
have avoided those costs," Brownstein said.

Study author Arindrajit Dube of Berkeley said the erosion of job-based
coverage hits hardest those workers earning $9 to $11 per hour. He
said jobs in that wage level are the fastest growing segment of jobs
in California.

Becca Rufer, 23, said she was offered health insurance by her employer,
a high-end restaurant in San Francisco. While she said many restaurants
don’t provide any coverage at all, her employer would only cover half
her premium costs.

Rufer, who also has to juggle student loan payments along with her
living expenses, said the coverage would cost her at least $150 a
month. "It didn’t seem feasible for me. I can’t budget very well
because I work for tips," she said.

The study was funded by the California Endowment and Blue Shield Foundation
of California. A copy of the report can be found at laborcenter.berkeley.edu
and www.wpusa.org.


More workers losing coverage
A study released by researchers from UC Berkeley and Working Partnerships
USA on employer-sponsored health insurance found:

— The national annual cost of job-based family health insurance
jumped to $9,831 last year from $6,567 in 2000.

— The average annual worker contribution for family coverage rose
nationwide to $3,156 in 2004 from $1,670 in 2000.

— For every 10 percent increase in health care premiums, about
910,000 adult Americans lose their job-based coverage..
Source: "Falling Apart," UC Berkeley Center for Labor
Research and Education, Working Partnerships USA.