Report Shows Decline in Employees Accepting Health Insurance, Rising Insurance Premiums Across Nation

State-by-state analysis shows significant percentage of adults in 25 states decline to accept employer's coverage offer

    • May 4, 2006

A new report shows an increasing number of employees in America are declining their employer's offer of health insurance, as the cost of individual premiums increased dramatically across the nation over a five-year period. Approximately 3 million fewer workers who are eligible for employer-sponsored health insurance enrolled in it in 2003, compared to 1998. With employer-sponsored health insurance providing most Americans residents with their health care coverage, the report provides the most comprehensive analysis to date of how this traditional job benefit is changing.

"Shifting Ground: Changes in Employer-Sponsored Health Insurance" was released today by the Robert Wood Johnson Foundation (RWJF) as part of Cover the Uninsured Week, a nonpartisan, nationwide effort to urge U.S. leaders to make health coverage for Americans their top priority. (Download the full report. )

“This report should be as alarming to Congress as it is to the American people, because employer-sponsored health insurance is the backbone of America's health care system,” said Risa Lavizzo-Mourey, M.D., M.B.A., president and CEO of the Robert Wood Johnson Foundation. “As costs go up, fewer individuals and families have insurance and fewer businesses can afford to provide coverage for their employees, which means the number of uninsured Americans will continue to increase. It is way past time for our national leaders to take action.”

The report released today was prepared for RWJF by researchers at the State Health Access Data Assistance Center, located at the University of Minnesota. Findings include:

Individual insurance coverage premiums are rising.

The national increase in individual premiums from 1998 to 2003 was $1,027, a 42 percent increase after being adjusted for inflation (from $2,454 in 1998 dollars adjusted for inflation to $3,481 in 2003).

More workers are declining employers' offer of health insurance.

Nationally the percentage of eligible private-sector workers that accept their employers' offer of individual health insurance declined five percentage points (from 85.3 percent to 80.3 percent) from 1998 to 2003. This means that 3 million fewer workers who are eligible for coverage benefits elected to enroll in their employers' health insurance plan. Twenty five states experienced a significant decrease in the percent of private-sector employees who accepted their employers' offer of health insurance during this period. States with significant percentage change in workers accepting their employers' offer of health insurance include New Jersey (-12 percentage points), Nebraska (-11 percentage points), Wisconsin (-9 percentage points), Colorado (-9 percentage points) and Iowa (-9 percentage points).

Employers are still paying the great majority of the insurance premium, as they were five years ago, but the cost burden has increased substantially for both employers and employees.

In both 1998 and 2003, the average employee paid approximately 18 percent of the annual premium for individual coverage. The employer continued to pay the remaining 82 percent of the cost.

The analysis uses trend data from 1998 to 2003 on employer-sponsored health insurance offer and take-up rates from the federal Medical Expenditure Panel Survey-Insurance Component (MEPS-IC) to provide national and state level detail not available from other data sources. MEPS-IC data are collected and distributed the Agency for Healthcare Research and Quality.

“Business leaders know first hand how important it is to offer health insurance, both because it improves the health of their workforce and because it makes their businesses more attractive to employees,” said Lavizzo-Mourey. “And workers need health insurance through their jobs in order to keep themselves and their families covered. But as health care costs rise, large and small companies are finding it hard to offer affordable health insurance. With premium rising each year for companies and their employees, millions of workers are no longer accepting the health insurance offered through their jobs. If trends continue, this could dramatically increase the number of working but uninsured people in this nation. More and more, having a job, even a full-time job, does not guarantee coverage. Even people who currently have coverage through their jobs may be at risk of having their benefits reduced or losing their coverage altogether.”

The Foundation also released a report today prepared by the Urban Institute, showing:

Cost is the reason most people without coverage say they are uninsured.

Nationally, more than half of all adults who do not have health insurance coverage say the high cost of coverage is the reason they are uninsured. The analysis underscores that people rely on their jobs for health coverage, with job-related issues cited as the second most common explanation for being uninsured. Lack of insurance because of job loss or change of jobs was cited as the reason about one in four uninsured adults say they are uninsured. About one in six uninsured adults—and one in 12 children—reported being uninsured because they either were not offered coverage from their employer, or were not eligible for their employer's policy.

Virtually all uninsured adults want to be covered.

The analysis shows less than two percent of uninsured adults said they had no need for insurance.

The analysis was prepared by the Urban Institute using data from the U.S. Centers for Disease Control and Prevention's National Health Interview Survey.

Some of the most influential organizations in the country, including the U.S. Chamber of Commerce and the AFL-CIO, are cosponsoring Cover the Uninsured Week, which occurs from May 1-7. Co-chaired by Presidents Gerald Ford and Jimmy Carter, the effort is supported by 10 former surgeons general and U.S. Department of Health and Human Services secretaries appointed by both Republican and Democratic presidents.

More than 2,000 public events will take place nationwide during the Week in every state and the District of Columbia. Activities are designed to encourage people to express their concern by instantly contacting a member of Congress through the campaign Web site, At events being held during the Week, event organizers will help enroll eligible adults and children in low-cost or free coverage programs, provide basic care and medical screenings, galvanize students on college campuses and engage faith communities in speaking out about the need for solutions.

Organized discussions are planned in cities around the nation involving large and small employers and their employees. Participants will talk about how the rising cost of health care is affecting large and small business owners and their ability to compete. The business owners will also discuss hard decisions they have had to make due to rising premium costs and specific measures they have put in place to both curb escalating costs and keep their workers healthy. Employees will share how rising costs of premiums affect them and their families.

To help small business owners identify and evaluate their health coverage options, a free, downloadable resource, the Guide to Health Insurance Options for Small Business, is available at The guide was prepared by the Healthcare Leadership Council in collaboration with the Robert Wood Johnson Foundation and with guidance from the U.S. Chamber of Commerce, America's Health Insurance Plans, and the Blue Cross Blue Shield Association. The guide provides small business owners with key information on coverage—various plan options, tax advantages for providing employee coverage, tools to help estimate the cost of providing coverage, information on employee cost-sharing, and more.

Organizations sponsoring Cover the Uninsured Week include the U.S. Chamber of Commerce, AFL-CIO, Healthcare Leadership Council, AARP, United Way of America, American Medical Association, National Medical Association, American Nurses Association, Families USA, Blue Cross and Blue Shield Association, America's Health Insurance Plans, American Hospital Association, Federation of American Hospitals, Catholic Health Association of the United States, Service Employees International Union, National Alliance for Hispanic Health, The California Endowment, W.K. Kellogg Foundation and the Robert Wood Johnson Foundation.

To view the state-by-state research report, send a message to Congress, locate Cover the Uninsured Week activities or find coverage information in English or Spanish, log on to


The Robert Wood Johnson Foundationfocuses on the pressing health and health care issues facing our country. As the nation's largest philanthropy devoted exclusively to improving the health and health care of all Americans, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, meaningful and timely change. For more than 30 years the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. When it comes to helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in your lifetime.