Firms Of All Sizes Are Less Likely To Provide Health Insurance To Low-Wage Than High-Wage Workers

New York City, March 14, 2003—Low-wage workers are at a serious disadvantage when it comes to health insurance coverage and access to care, even when they work for large businesses. A new report from The Commonwealth Fund reveals that low-wage workers are less likely to work for companies that offer coverage or to be eligible to participate. Although employees of small companies are particularly unlikely to have coverage through their jobs, low-wage workers in firms of all sizes have less access than their higher-wage colleagues. Eligibility rules such as working a certain number of hours per week or being a permanent employee hit low-wage workers particularly hard. Even in larger firms only 69% of low-wage workers are eligible for health benefits compared to 96% of higher-wage employees.

When low-income workers have health insurance, they often have difficulty paying their share of premiums. As a result of lack of job benefits or high premium costs, one of five low-wage workers is uninsured. "Workers earning less than $10 an hour in large firms are less likely to be eligible for coverage even when it is offered to other workers," said Karen Davis, president of The Commonwealth Fund. "It runs counter to a basic sense of fairness when some firms provide coverage for higher-wage workers, while denying it to their low-wage workers." The report, On the Edge: Low-Wage Workers and Their Health Insurance Coverage, by Sara R. Collins, Cathy Schoen, and Deirdre A. Downey of The Commonwealth Fund, and Diane Colasanto of Princeton Survey Research Associates is based on a survey of two thousand working adults. While employment-based health insurance is the primary system of health coverage in the United States, only 70 million of the 120 million workers in the United States have health benefits through their own employers. The remaining 50 million either have coverage through someone else's employer or the individual market, are insured through a public program or are uninsured. Almost half (45%) of those who do not have coverage through their own employers are workers who earn less than $10 an hour. The study finds that public programs such as Medicaid and the State Children's Health Insurance Program end up taking on some of the responsibility where employers are not providing coverage. "Many low-wage workers rely on public health insurance programs to cover their children," said Sara R. Collins, senior program officer at the Fund and lead author of the report. "However, few such options exist for low-income working adults. As a result the families still remain at risk." Low-Wage Workers Have Limited Access to Health Benefits
Among workers who earn less than $10 an hour, two-thirds (65%) work in firms that offer health insurance coverage, compared with 88% of those who earn over $15 an hour. While working for larger companies improves low-wage workers' chances of being offered insurance, they are still less likely to be offered or eligible for insurance than higher-wage workers. Low-wage workers may lose out because of requirements that they work a certain number of hours, or because of their status as a temporary or contract employee. Low-wage workers in large firms are most likely to face this barrier: while 85% work in firms that offer coverage, just 69% are eligible. In contrast, most higher-wage workers in larger firms are both offered and eligible for health benefits (97% offered, 96% eligible). Premium shares also present an obstacle. The gap between workers who are eligible for coverage and those who participate is largest among low-wage workers in larger firms-69% are eligible for coverage but just 46% actually take up this coverage. Low-Wage Workers Get Less Coverage
When low-wage workers do get health insurance through their jobs, coverage is not as good as that of higher-wage workers. They are notably less likely to have prescription drug, dental, or vision benefits. Lack of health insurance or less adequate insurance have real implications for the health and financial security of these low-wage workers and their families. Two of five workers earning less than $10 per hour did not see a doctor when they were sick, did not fill a prescription, did not see a specialist when needed, or skipped a recommended medical test because of cost. Similarly, two of five had problems paying their medical bills, including facing collection agencies.