State of Connecticut

The Comptroller's Report Nancy Wyman - State Comptroller

Health Coverage:
Economic Downturn May Erode Recent Health Coverage Gains

In the past several years Connecticut has experienced a decline in the percentage of residents who lack health insurance. This trend has largely been due to a strong state economy and low levels of unemployment. Until recently, Connecticut's tight labor market encouraged more employers to offer health benefits to help attract and retain qualified workers.

comparison of non-elderly uninsured.Click here for a text representation of this chart.

Comparison of Non-Elderly uninsured in the New England States (2000). Click here for a text representation of this chart.

Comparison of Health Insurance Coverage Sources for the Non-Elderly Population (2000). Click here for a text representation of this chart.

Health policy analysts are predicting a rise in the uninsured population in the near term, based primarily on the convergence of two trends. The first is the weakening economy, both on the state and national levels. The current recession has produced a significant increase in the jobless rate. Studies of past recessions have shown that the loss of a job often means losing health coverage.

The second trend is rising health care costs. Medical inflation has been increasing sharply in recent years after a period of relative stability in the mid 1990s. As health benefits get more expensive, employers tend to shift more of the cost onto employees and some may stop offering coverage altogether. For their part, workers - especially low wage earners - are less likely to accept offers of coverage when costs rise because they cannot afford the employee portion of the insurance premium.

A recent survey by the human resource consulting firm William M. Mercer indicates that health benefit costs continued to increase for employers in 2001 and show no sign of slowing. More than 2,800 employers participated in the firm's nationwide survey and the following are among the findings:

Despite the recent decline in Connecticut's uninsured population, many state residents still lack health coverage and the vast majority are from working families. In addition, the downturn in the economy and rising health costs will likely erode health coverage levels in the near future.