October 6, 2016
Two Steps Back, One Step Forward: Low-income Virginia workers still unlikely to be offered insurance through their workplace
After several years of decline, Virginia (and the United States as a whole) are finally starting to see an uptick in the share of working-age adults covered through employer-sponsored insurance. This encouraging trend may be explained in part by the implementation of the Affordable Care Act’s employer mandate. Under the mandate, more firms in 2015 were required to offer insurance to their employees or pay a fine. From 2014 to 2015, 37,000 Virginians gained coverage through increased use of employer-sponsored insurance.
While the uptick this past year in employer-sponsored insurance is a welcome change, the overall share of Virginians receiving this type of insurance is still down considerably from 2008. Even more troubling is the ongoing gap between low- and high-income workers. Those below the poverty line are still significantly less likely to be covered through their job, a situation that has barely changed since 2009. When low income workers are not offered health insurance through their employer but make too much to qualify for Virginia’s Medicaid program, they often are not able to obtain marketplace coverage because they still don’t make enough to qualify for the tax credits that help make it affordable. For low-income parents in this coverage gap, making too high of an income can become a liability – disqualifying them from public health insurance or disincentivizing them from earning more.
In almost every year between 2000 and 2014, Virginia saw a drop in the share of workers getting their health insurance through their employers. If the share of Virginia workers getting insurance through their employers had simply remained at the 2008 rate, more than 300,000 Virginians would still be offered insurance through their jobs today.
As group health plan premiums continue to rise, albeit more slowly than before the implementation of the Affordable Care Act, providing insurance to employees is becoming increasingly expensive. As more employers find ways to cut their insurance offerings or transition costs to employees, changes at the policy level will be imperative to make sure hard working Virginians don’t fall through the cracks. Expanding Medicaid coverage to include more low-income groups who are least likely to get insurance through their employers could cover as many as 400,000 Virginians. And it could be done in a way that ends up not costing the state a dime after accounting for state budget savings and other funding sources.
Enactment of the employer mandate may have contributed to the recent upswing in employers offering insurance, which is good news and a much needed step in the right direction. However, Virginia remains far behind where we were a decade ago. It’s high time for lawmakers to address this discrepancy by establishing safeguards for hard working Virginians who are not offered insurance through their employers. Closing the coverage gap by expanding Medicaid is the clearest and best path forward to protect Virginia’s families with the health insurance they need and deserve.