The Great Recession has caused a sharp drop in employer-sponsored insurance and a significant increase in public coverage, especially in Wisconsin. According to a report issued on November 16 by the Economic Policy Institute (EPI), the percentage of Americans with employer-sponsored insurance (ESI) fell in 2009 – for the 9th year in a row. Their analysis of data from the Census Bureau’s Current Population Survey (CPS) found that an estimated 7.2 million Americans below age 65 lost their employer coverage between 2000-01 and 2008-09.

Wisconsin started the past decade with a considerably higher level of employer coverage than most other states, but it has declined a little faster. The EPI report shows that about 318,000 Wisconsinites lost their ESI coverage since 2000-01 – a drop from 78.1 percent to 68.9 percent. The good news is that BadgerCare Plus picked up most of the slack last year and Wisconsin continues to have one of the highest rates of employer coverage (tied for 6th highest according to the EPI analysis).A closer look at the EPI report and the Wisconsin figures can be found in a 2-page paper released yesterday by the Center on Wisconsin Strategy.

WCCF has analyzed a different Census Bureau dataset, the American Community Survey (ACS), which uses a much larger sample in each state, but didn’t include health insurance questions until 2008. The ACS data show that about 141,000 Wisconsinites lost their private insurance from 2008 to 2009 (a 2.9 percentage point decrease in private coverage); however, there was an increase of nearly 135,000 people (2.3 percentage points) in public coverage in 2009. Because BadgerCare Plus did a good job of filling in for the declining employer insurance, Wisconsin continues to have one of the highest rates of insurance coverage – ranking 7th nationally in 2009.

As a result of the economic trends in our state, coupled with the implementation of BadgerCare Plus and BC+ Core, Wisconsin had a larger increase in Medicaid-related enrollment than any other state over the last two years. Based on figures in a report issued in September by the Kaiser Commission, we calculate that total Medicaid enrollment in Wisconsin grew 42 percent from December 2007 to December 2009, three times faster than the average rate of growth nationally.

The Wisconsin Hospital Association has argued that the Kaiser report shows that Medicaid participation in Wisconsin is out of line with other states and that BadgerCare Plus is crowding out employer-sponsored insurance. However, an objective analysis of Census Bureau data paints a different picture. Our scrutiny of the 2009 data from the American Community Survey (ACS) and also the much smaller Current Population Survey (CPS) found the following:

• The portion of people on Medicaid in 2009 was 15.8 percent in Wisconsin, compared to 16.1 percent nationally (based on ACS figures).
• The share of Wisconsinites with employer-sponsored insurance was 68.5 percent in Wisconsin last year, versus just 59 percent nationally. (See ACS data in Figure 1.)
• Wisconsin was tied in 2008-09 for the 6th highest percentage of people under age 65 who have employer-sponsored insurance.

 The Census Bureau statistics illustrate that Wisconsin continues to have a much stronger base of employer-sponsored insurance than most other states and was still below average in 2009 in the percentage of the population enrolled in Medicaid. That data and state enrollment figures on the income level of BC+ enrollees show that the growth in BadgerCare Plus has been driven by the recession, not by a voluntary migration of moderate income Wisconsinites from employer coverage into BC+.

Of course, the substantial growth in Medicaid and BC+ enrollment and the anticipated decline in enhanced federal assistance for Medicaid mean that lawmakers have very difficult policy choices to make in the next budget bill. As they grapple with those choices, policymakers and advocates need to reflect on the success of BC+ in serving the huge number of Wisconsinites who lost their option of having employer-sponsored coverage, and who otherwise would have lost their access to cost-effective preventive health care services.

Jon Peacock