Job-Based Plans Continue To Shrink

The 2008 financial crisis and the Great Recession that succeeded it has steadily eroded the number of Californians with job-based healthcare insurance coverage, with their numbers dropping below half of the state’s residents for the first time last year.

According to new data from the UCLA Center for Health Policy Research, just 49.7% of Californians obtained their healthcare coverage from their jobs or from a family member’s employment last year. That compares to 56% in 2001.

“We're seeing the toll of two years of high unemployment with the loss of job-based insurance for more than 1 million Californians,” said Shana Alex Lavarreda, the UCLA researcher who heads the center's Health Insurance Studies Program.

The Medi-Cal and the Healthy Families programs have grown to replace job-based coverage for many Californians, according to Lavarreda, who noted that despite the economic recovery, the statewide unemployment rate remains stubbornly above 10%. In 2007, prior to the start of the Great Recession, about 15% of the state’s residents had coverage through public insurance programs. That has since grown to 19%.

“It's clear that the job-based model just doesn't work for everyone in an age of high unemployment and rapidly changing job markets,” Lavarreda said.

Despite adding Californians to the rolls of public insurance programs, more than 21% of the state’s residents lack health insurance – about 7 million people in all.

UCLA officials noted that the expansion of the Medi-Cal program that has begun under the Bridge to Reform program and will continue under the Affordable Care Act in 2014 should bring significant relief to the state.  About 400,000 people are expected to receive coverage under Bridge to Reform, while up to 3 million Californians are expected to enroll in Medi-Cal under relaxed income guidelines by the end of the decade.

The California Health Insurance Exchange will also enroll individuals into commercial plans who earn too much to qualify for Medi-Cal, with the premiums partially offset by tax subsidies. Earlier this week, the exchange’s board of directors voted to name itself Covered California. Exchange officials said the name was picked because it was considered most likely to persuade Californians to obtain coverage.

"When the major insurance expansions occur in 2014, the ACA should finally provide relief to the millions of Californians who for years have struggled to survive without health insurance," Lavarreda said.