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The rate of New Jerseyans covered by an employer for health insurance is dropping faster than the nation as a whole, according to research released today by the Economic Policy Institute in Washington.

The report covers the period 2006-07 and found that in New Jersey the share of adults and children covered by an employer-provided policy dropped to 69.7 percent from 75.6 percent in 2000-01. The 5.8 percentage point drop exceeded the national rate of 4.8. New Jersey's decline was the 14th greatest in the US.

The Erosion of Employer-Sponsored Health Insurance by Elise Gould says, "evidence suggests further unraveling of the employer-based system as the share of persons covered through work (either their own or a family member's employer) declined for the seventh year in a row."

The full EPI report can be found at http://www.epi.org/content.cfm/bp223

The drop in employer-provided health insurance coverage took place when the unemployment rate in New Jersey was only 4.2 percent in 2007, the lowest it had been in five years. This is disturbing in that as of August 2008 unemployment had risen to 5.9 percent, suggesting that employer-provided coverage has likely eroded since the period covered by the report.

At the national level, the EPI study found that only 21.9 percent of low-income persons had employer coverage compared to 86.4 percent for higher income persons. "The sad fact is in our society, your health and in too many cases even whether you live or die, can depend on whether you have a job and how much money you make," said NJPP President Jon Shure. "That's unfair to people and bad for the nation's productivity."

While some persons fared better than others, the decrease in employer-provided health insurance appears to be affecting nearly everyone. Full time workers, higher income workers and persons with college degrees all saw a decrease in employer-provided coverage since 2000.

Children were especially hard hit. For them, health insurance-provided by a family member's employer decreased to 68.6 percent from 76.2 percent in New Jersey. Fortunately, New Jersey enacted legislation this summer that mandates health insurance for all children by next year. The law also expands coverage for uninsured parents up to twice the federal poverty level. Further, it made changes in the marketplace that should result in reducing the cost of private insurance for most individuals and group insurance for small employers. This should help to reduce shifting of the cost burden of health insurance from employers to taxpayers.

Most working adults without insurance will still not be eligible for affordable health coverage in New Jersey. This demonstrates the urgent need for universal health coverage at the state or federal level. It would not only meet the increasing health care needs of families, but could prove to be a much needed shot in the arm in the economy by making workers healthier and more competitive, and increasing pubic expenditures at the community level where they are needed.

At a minimum, as it did in the 2003 national recession, Congress should pass pending legislation that would temporarily increase the federal matching rate for Medicaid to avoid state cutbacks in health services. As Hippocrates advised, "First, do no harm."

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