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It’s the economy, stupid!

By Jay MacDonald ·
Friday, June 24, 2011
Posted: 9 am ET

Now that the 2012 presidential election is underway, great bloviating will surely follow on which hot-button issue will ultimately move the electorate.  My vote? Forget Afghanistan, forget bin Laden, forget health care reform – once again, it's the economy, stupid!

Lest we have any doubts about the continued grievous state of suspended animation on Main Street, a new study by the nonpartisan Employee Benefit Research Institute (EBRI) confirms the obvious: the recession and unemployment have put the cost of health insurance out of reach for more Americans.

According to the study, from December 2007, when the recession officially began, to August 2009, the percentage of private-sector workers with employment-based coverage in their own name fell from 60.4 percent to 55.9 percent.

During this same period, the percentage of workers with coverage as a dependent increased from 16.6 percent to 17.3 percent, and reached 17.5 percent in July 2010, in part a reflection of the decline in coverage that workers received through their own employer.

By December 2009, when the recession officially ended, that percentage of private-sector workers with employment-based health insurance bounced back slightly to 56.6 percent.

Paul Fronstin, author of the EBRI study, says the percentage of Americans with health insurance has been shrinking since the 1980s, in large part due to the impact of rising health care costs on employment-based plans. The percentage of workers offered coverage and the percentage that decline it have remained steady during this period, he adds.

Unemployment showed an equally direct impact on the numbers of Americans with health coverage. During the recession, when unemployment nudged double digits, the uninsured rate for workers increased from the upper 14-percent range to just over 18 percent. Eight in 10 uninsured American workers cited cost as the main reason they passed on coverage.

Health care reform, which began in earnest last year with the Affordable Care Act, is bringing about much-needed corrections to the way we deliver health care in this country. But the act can only do so much.

Without a stronger economy, America's ability to afford health insurance will be slow to recover.

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