Yesterday, employees at the SK Hand Tool Corp.'s factories in Chicago and McCook hit the picket line in protest of their company's decision to pull the plug abruptly on their health insurance benefits. The Sun-Times made a trip out to the site and talked with workers like Dejan Gavatski, who is in a lurch because his coverage was yanked just as he underwent a $20,000 emergency hernia surgery last month. "People are threatened with losing their homes, with financial ruin," Teamsters Local 743 President Richard Berg told the paper.

The situation for those local workers offers a sobering reminder of how high health care costs are threatening workers with employer-sponsored insurance coverage. The Economic Policy Institute (EPI) has been following the trend. And just last fall, the Washington D.C.-based policy group released a report (PDF) highlighting the steady erosion of employer-provided coverage over the past decade. Between 2000 and 2007, EPI found a 5 percentage-point decline in the rate of people who have workplace-sponsored insurance. (And Illinois -- which posted a below-average 3 percent loss -- hasn't been immune.) Had the coverage rate held steady since 2000, 14 million additional Americans under the age of 65 would be covered under a workplace policy today.

"We realize that employees want to have health care," SK Hand Tool company officials wrote to the Sun-Times, "and we wish that we could provide them with coverage." With premiums for employer-based coverage rising by 78 percent over the past decade, it's no surprise that many companies would feel stressed by the costs.

"So, what does the future hold?" the EPI's Elise Gould testified (PDF) at a congressional hearing (along with Illinois business owner David Borris) on the matter in April. His conclusion:

It is truly bleak unless there is action. The current economic downturn and forecasts of high unemployment indicate continued erosion of employer-sponsored insurance in the near future. I estimate that by the end of 2009, nearly 50 million non-elderly will be uninsured.

The take-away from SK Hand Tool is simple. The private sector is taking away health benefits at a startling rate. As a result, rejecting reforms that will drive costs down could become biggest wedge between Americans and their doctors.