The percentage of Americans with health insurance through an employer has been declining rapidly over the past decade. The following chart illustrates that trend (using two-year averages from the Current Population Survey data released yesterday), and it highlights the importance of measures in the health care reform law to help uninsured Americans get access to affordable insurance.

At first blush, the national decline in employer-based coverage seems to have halted in 2011, but the latest trends are actually more complicated than that. Although employer-sponsored coverage was flat nationally in 2011, that can be attributed in large measure to the part of the health care reform law allowing young adults to be covered on a parent’s health plan until they reach age 26. There are now an estimated 3 million young adults covered on their parents’ plans, and the number of insured 19-26 year olds grew by about 540,000 last year.

That very positive development was counterbalanced by a continued drop in private coverage among those aged 25-64, with the two effects offsetting each other in the national data.  For the first time in ten years, the percentage of non-elderly people with private coverage remained steady in 2011, rather than declining.  And because of an increase in public coverage, the percentage of Americans who are uninsured decreased to 15.7 percent last year, from 16.3 percent in 2010, the largest annual improvement since 1999.

The chart illustrates that employer-sponsored plans covered just 58.5 percent of Americans in 2010-11, compared to 68.7 percent in 1999-2000.  Wisconsin has consistently had a much higher percentage of people with employer-sponsored insurance, but the decline has generally tracked the national trend, at least until 2011.

Wisconsin lagged the national economic recovery last year, and the Current Population Survey (CPS) data released Wednesday suggest to me that economic factors have taken a toll on health insurance coverage here.  However, because the CPS uses a relatively small sample, it’s necessary to average together two years of state-level data, and even then the numbers have large margins of error that make the state estimates imprecise.  Next Thursday, when data from the far larger American Community Survey is released, we’ll get a much better read on whether there was a large drop in employer-sponsored coverage in Wisconsin last year.

Although it might be a week too soon to fret about the 2011 Wisconsin numbers, the 10-year trend is clear.  At both the state and national level, a rapidly dwindling number of people are able to get insurance through their employers, and that national trend is likely to become obvious again after there is a leveling off of the number of young adults who are covered on their parents’ plans. 

The state and national trends underscore the importance of the provisions in the Affordable Care Act that enable Wisconsin to fill the gap in BadgerCare and provide subsidies, beginning in 2012, through the new insurance market places (exchanges) for people who don’t have access to affordable employer coverage.

Jon Peacock