This is the second post in the Labor Center’s blog series “Rising Health Care Costs in California: A Worker Issue.”
While our blog series will primarily focus on Californians with job-based coverage, this post puts job-based coverage in the context of California’s broader health coverage landscape.
In 2018, more than half (58 percent) of California’s 24.2 million adults ages 19 to 64 had health insurance through their own employer or a family member’s employer, based on analysis of data from the U.S. Census Bureau’s Current Population Survey (CPS). Job-based coverage is private health insurance offered by small and large employers to employees and typically their spouses and children.
The percentage of California adults with job-based coverage has been relatively stable since 2002, except for a decline in coverage rates during the Great Recession and subsequent economic recovery.
The percentage of California children below 19 years with job-based coverage through a parent remained relatively stable over the same time period, hovering around 50 percent.
What other sources of coverage do California adults have?
Besides the 58 percent of adult Californians who in 2018 had job-based health coverage, 16 percent had Medi-Cal (California’s Medicaid program for low-income individuals); 11 percent had individual market coverage purchased directly from an insurer or through Covered California; 4 percent had other public coverage such as Medicare for disabled adults under age 65 or military/veterans coverage; and 11 percent were uninsured (based on analysis of CPS data).
How does job-based coverage compare to other sources of health coverage?
The research is clear that having insurance is associated with improved access to health care, better health outcomes, and improved financial security, compared to being uninsured. But how does having job-based coverage compare to having Medi-Cal and individual market coverage, the two other largest sources of coverage for California adults? The differences between insurance types greatly depend on each individual’s circumstances, but we are able to provide a general comparison of the three primary insurance types in terms of comprehensiveness of benefits, access to care, ease of enrollment, and cost.
Comprehensiveness of benefits
Under the Affordable Care Act, Medicaid coverage, individual market plans, and plans offered by small employers are required to offer ten categories of essential health benefits. Coverage offered by large employers is not subject to this federal requirement but California law requires that all state-regulated health plans cover basic health care services when those services are medically necessary. Medi-Cal also covers home and community-based services that are not typically covered in private plans. Medi-Cal coverage includes some dental benefits. Employers sometimes offer dental coverage alongside medical insurance and people enrolled in the individual market can purchase dental coverage separate from their health plan.
Access to care
Across all types of insurance, access to care varies by plan, geographic region, and an individual’s needs. In 2015, physician participation in Medi-Cal was lower (62 percent of primary care doctors) than participation in private insurance (86 percent of primary care doctors), indicating that some Medi-Cal enrollees may have more difficulty accessing care than individuals with job-based coverage or individual market insurance do.
Job-based coverage is paid for through employer and worker premium contributions using pre-tax dollars. Most job-based plans also require that workers pay when they or their family members access care, typically via co-payments or deductibles, but the amount varies significantly by firm and plan, and is usually dependent on how much care an individual needs. Among Californians with job-based coverage through a large employer (excluding self-insured plans in which employers assume the financial risk for providing health benefits), the vast majority (93 percent) had a “Gold” plan or better in 2018, meaning that the insurer paid an average of at least 80 percent of covered medical expenses and the individual paid the remainder in cost sharing. (In a future blog post, we will present more information about premiums and deductibles for California workers with job-based coverage and how those costs have changed over time.)
For individuals who purchase coverage through the individual market, the cost depends on their age, region, and eligibility for ACA or state affordability assistance based on income. Generally, individual market enrollees who are not eligible for ACA or state subsidies pay much more for premiums than those with job-based coverage because they pay the entire premium, instead of sharing the cost with their employer. But among those who are eligible for subsidies, the premium comparison is dependent on individual circumstances. Californians with individual market insurance are more likely to have deductibles than those with job-based coverage. After accounting for cost-sharing assistance, only 53 percent of Covered California enrollees had a “Gold” plan or better coverage (compared to 93 percent of those with job-based coverage, as mentioned above).
In contrast to job-based coverage and the individual market, most individuals enrolled in Medi-Cal pay no premiums or cost sharing.
This general comparison of job-based coverage, Medi-Cal, and individual market coverage is provided as context before we delve into more detail on Californians’ experience with job-based coverage in future blog posts.
Up next: Our next blog post will describe the inequities in access to job-based coverage for low-income, black and Latino, immigrant, and young adult workers in California.