The effect of HMOs on premiums in employment-based health plans.

This study documents the effect of HMOs on premiums in employment-based health plans. We analyzed a survey of Minnesota employers conducted in 1986. Among 922 usable observations, 239 firms offered HMOs in addition to fee-for-service (FFS) health plans. We estimated an equation for the probability of offering an HMO, followed by equations for HMO enrollment share, and HMO and FFS premiums. The weighted average HMO and FFS premium in firms that offer HMOs was compared to the premium of FFS-only firms. We found that offering an HMO raises the average premium for family coverage health insurance by $25.14 per month and for single coverage by $3.68 per month. This effect was smaller for firms in the Twin Cities metropolitan area. HMOs may be viewed as a progressive and innovative health care benefit, but they are likely to increase firms' health insurance premiums.     

Substance abuse and the uninsured worker in the United States

Although millions of US workers lack health insurance, the relationship of insurance coverage with substance abuse and access to workplace treatment services remains unexplored. Our analysis shows uninsured workers have higher rates of heavy drinking and illicit drug use than insured workers. Young and part-time workers are, moreover, less likely to have insurance coverage than workers with lower substance abuse risks. Compared to the insured, uninsured workers have less access to employee assistance programs (EAPs) and less drug and alcohol testing by employers. The effectiveness of workplace substance abuse programs and policies designed for insured populations is untested among uninsured workers. Issues include EAP effectiveness with referrals to public treatment and the return on investment for adding coverage of substance abuse treatment. Workers in countries with universal health insurance but inadequate treatment capacity may face similar problems to uninsured workers in the US.     

Large employers see scenarios under which they could move workers and retirees to exchanges

Large employers are thinking about how they might use the health insurance exchanges created by the Affordable Care Act. In the short term, from 2014 to 2016, many of these employers are giving serious consideration to using the exchanges to help provide coverage for part-time workers and for retirees not yet eligible for Medicare. In the long term, beginning in 2017, some large employers are considering using the exchanges to provide coverage for all of their employees. Costs, human resources strategies, and competitive pressures, as well as state and federal policy, will be the likely drivers of large employers' decisions about whether-and how-to use the exchanges.     

Displaced Workers and Employer-Provided Health Insurance: Evidence of a Wage/Fringe Benefit Tradeoff?

Job changes that result from plant closings and mass layoffs provide an opportunity to see how workers respond to an employment shock that is arguably exogenous to individual productivity. Comparing compensation packages of displaced workers on their old and new jobs is a potentially promising method to infer a tradeoff between wages and non-wage benefits. Although displaced worker data overcomes many of the pitfalls to estimating wage/fringe tradeoffs by controlling for time-invariant unobserved productivity, time-varying unobservables could still bias estimates. In this analysis, I investigate the compensating wage differential for one particularly valuable benefit, employer-provided health insurance. I find that even after controlling for an extensive set of productivity factors, I obtain results indicating a wrong-signed tradeoff. Those who lose health insurance through the job change also lose wages relative to other displaced workers, while those who gain health insurance also gain in wages. Individuals expected to incur higher health care costs (older workers and workers who are likely to buy family coverage) do not experience steeper wage/health insurance tradeoffs as would be expected if employers were able to pass health care costs on to workers according to individual costs. Although this exercise fails to isolate a wage/fringe tradeoff, the strong correlation between changes in wages and changes in fringe benefits has important implications for public policy towards displaced workers. Further research is needed to understand the true magnitude and distribution of the costs of job displacement taking changes in fringe benefits into account.     

Employers’ Role in Helping Latino Workers Obtain Access to Health Care Services: Results of a Community-Based Pilot Demonstration Project

A coalition of employers in the hotel and restaurant industries collaborated with community-based organizations to undertake a unique demonstration project, called the Employed Latino Health Initiative, aimed at improving access to basic health care services for low-wage Latino workers in Columbus, Ohio. With grant funding from the Robert Wood Johnson Foundation, the project developed and tested protocols allowing Latino workers from participating companies to obtain basic health care screenings, referrals to medical providers, health education training, and the services of a qualified community health navigator. Data from the pilot project indicated high screening participation rates, extensive referrals to providers for follow-up care, and a substantial need for facilitation services by community health navigators. The project provides a model for how employers can potentially promote their own interests in boosting work productivity through facilitating expanded access to basic medical services among vulnerable workers, despite the absence of conventional health insurance coverage.     

The role of public employers in a changing health care market

Public employers provide health insurance coverage to nearly 16 percent of all U.S. workers. Their reactions to rapidly rising premiums can have an important effect on local markets for health insurance because of their size, their visibility, and their reflection of public policy. However, public employers are constrained in their responses by tight budgets set by elected officials and statutes regarding due process, public input, and public accountability. As insurance markets consolidate and premiums continue to increase, public employers face tough choices regarding employee benefits.     

Employer Health Insurance Offerings and Employee Enrollment Decisions

Objective. To determine how the characteristics of the health benefits offered by employers affect worker insurance coverage decisions.
Data Sources. The 1996–1997 and the 1998–1999 rounds of the nationally representative Community Tracking Study Household Survey.
Study Design. We use multinomial logistic regression to analyze the choice between own-employer coverage, alternative source coverage, and no coverage among employees offered health insurance by their employer. The key explanatory variables are the types of health plans offered and the net premium offered. The models include controls for personal, health plan, and job characteristics.
Principal Findings. When an employer offers only a health maintenance organization married employees are more likely to decline coverage from their employer and take-up another offer (odds ratio (OR)=1.27, p <.001), while singles are more likely to accept the coverage offered by their employer and less likely to be uninsured (OR=0.650, p <.001). Higher net premiums increase the odds of declining the coverage offered by an employer and remaining uninsured for both married (OR=1.023, p <.01) and single (OR=1.035, p <.001) workers.
Conclusions. The type of health plan coverage an employer offers affects whether its employees take-up insurance, but has a smaller effect on overall coverage rates for workers and their families because of the availability of alternative sources of coverage. Relative to offering only a non-HMO plan, employers offering only an HMO may reduce take-up among those with alternative sources of coverage, but increase take-up among those who would otherwise go uninsured. By modeling the possibility of take-up through the health insurance offers from the employer of the spouse, the decline in coverage rates from higher net premiums is less than previous estimates.     

Estimating workers' marginal valuation of employer health benefits: would insured workers prefer more health insurance or higher wages?

In recent years the cost of health insurance has been increasing much faster than wages. In the face of these rising costs, many employers will have to make difficult decisions about whether to cut back health benefits or to compensate workers with lower wages or lower wage growth. In this paper, we ask the question, "Which do workers value more -- one additional dollar's worth of health benefits or one more dollar in their pockets?" Using a new approach to obtaining estimates of insured workers' marginal valuation of health benefits this paper estimates how much, on average, employees value the marginal dollar paid by employers for their workers' health insurance. We find that insured workers value the marginal health premium dollar at significantly less than the marginal wage dollar. However, workers value insurance generosity very highly. The marginal dollar spent on health insurance that adds an additional dollar's worth of observable dimensions of plan generosity, such as lower deductibles or coverage of additional services, is valued at significantly more than one dollar.     

3rd Circuit issues ruling favorable to employers, insurers

In Ford v. Schering-Plough Corporation, the U.S. 3rd Circuit Court of Appeals ruled that employers do not violate the Americans with Disabilities Act (ADA) by singling out different types of disabilities for less coverage, and that the ADA covers the physical premises of insurance offices but not the content of the insurer's policies. In this case, Colleen Ford sued her former employer for placing a cap on mental health disability coverage, without similar caps on physical conditions. The Court stated that employees must all be offered the same coverage but that the ADA does not require equal coverage for every type of disability. Also, the court held that an insurance office, while a public accommodation, does not mean that the insurance policies are covered by Title III of the ADA. The courts are divided on whether the ADA allows former workers to sue their employers concerning insurance coverage restrictions.     

To offer or not to offer: the role of price in employers' health insurance decisions

OBJECTIVE: To estimate the effect of changes in price on employers' decisions to offer health insurance. DATA SOURCES/STUDY SETTING: A 1993 survey of 22,347 private employers in ten states was used. STUDY DESIGN: Probit regression was used to estimate the probability of offering insurance as a function of the price and employer characteristics. For employers who did not offer insurance, a price cannot be directly observed. We estimated price for nonofferors using reported quotes received by recent shoppers and a selection model to correct for differences between recent shoppers and nonshoppers. PRINCIPAL FINDINGS: Changes in price affect decisions to offer insurance; however, even a 40 percent reduction in premiums would lead to only a 2 to 3 percentage point increase in the share of employers offering insurance. Employers of low-wage workers are substantially less likely to offer health insurance than other employers. CONCLUSIONS: Policies to reduce the number of uninsured that focus on increasing the supply of employment-based insurance are unlikely to have the intended effect unless coupled with policies to help low-wage workers afford insurance.     

How have employers responded to health reform in Massachusetts? Employees' views at the end of one year

In April 2006, Massachusetts enacted legislation that seeks to move the state to near-universal health insurance coverage, with key components of the reform effort targeting the role of employers. Based on surveys of working-age adults ages 18-64 in Massachusetts in 2006 and 2007, this paper examines employers' responses to health reform as reported by their employees. Results suggest that at roughly the end of the first year under health reform, employers in Massachusetts had made few changes in the insurance coverage they offered to their workers.     

The number of Americans without health insurance rose in 2001 and continued to rise in 2002.

Data from the Census Bureau and the Centers for Disease Control and Prevention indicate that the number of uninsured Americans rose in 2001and in the first quarter of 2002. The main reason insurance coverage fell was a drop-off in employer-sponsored insurance for workers and their dependents. This reduction was triggered by rising unemployment levels and rising health insurance premiums, which made it more difficult for employers to offer insurance or for workers to afford it. The downturn in private coverage was partially offset by increased enrollment in Medicaid and the State Children's Health Insurance Program (SCHIP). About two million mor e children and one million more adults would have been uninsured had it not been for the growth in these programs. Funding for the public programs is, however, threatened by budget shortfalls affecting most states, which administer these programs. Many states have cut their Medicaid programs and are planning further cutbacks. Increasing federal assistance to states and their Medicaid programs could help protect insurance coverage for low-income people during the current economic slowdown. Future SCHIP enrollment could drop sharply because of a shortage of federal funds, and Congress could take steps to bolster SCHIP funding.     

Employers' views on incremental measures to expand health coverage

This paper examines employers' views on the importance of health benefits and their perspective on policies aimed at expanding health coverage, reducing administrative expenses, and improving the quality of care. Employers of all sizes hold a positive view of the value of health benefits in attracting and retaining workers and in improving workers' health and productivity. Small employers support strategies that would make coverage more affordable; large employers support policies that reduce administrative costs and improve quality. Both support policies that would require additional administrative action as opposed to greater financial commitment on the part of firms in expanding coverage.     

Access to medical care for occupational disorders: difficulties and disparities

Despite state laws guaranteeing full insurance coverage for work-related disorders, many injured workers have difficulty obtaining access to appropriate medical care. Barriers to access arise because: patients are unable to prove that their conditions are caused occupationally; they are discouraged by employers from reporting occupational injuries; workers' compensation insurance carriers aggressively contest claims; and other reasons. Evidence suggests that minority subpopulations of workers are most affected. Overcoming these barriers will require a multifaceted approach involving regulatory oversight, participation of workers in the design of health plans and the selection of providers, and specific measures to detect and prohibit discriminatory care.     

Proposal to reimburse occupational medicine disease and injury claims through third party health insurance

The current system of compensation for the medical costs of occupational illnesses and injuries, a component of health insurance coverage for most workers in the United States, has recently come under scrutiny in the national health care reform debate. The cost of treatment of these conditions is significant, and there exist numerous disincentives for physicians and patients to use the workers' compensation system. Physicians who treat workers with occupationally related diseases may find compensation for a condition is disputed at the same time that it is excluded from payment by third party insurance coverage, leaving the patient selectively uninsured for at least some medical care services. In addition, most workers' compensation programs have been designed in a way that discourages efficient resource use by providers and claimants. We propose allowing health care providers to bill third party health insurers for all care, including work-related diseases and injuries. Insurers, in turn, would bill workers' compensation programs for associated treatment costs. The potential advantages of such a system include reductions in inefficiency and unfair burdens placed on providers and patients, in reporting bias, and in administrative costs balanced against the risks of insurers excluding workers in high risk occupations from obtaining low cost health insurance and shifting away from employers the administrative burden for workers' compensation.     

Health benefits in 2008: premiums moderately higher, while enrollment in consumer-directed plans rises in small firms

Our annual Employer Health Benefits Survey contains findings from interviews with 1,927 public and private employers surveyed during the first five months of 2008. Average annual premiums in 2008 are $4,704 for single coverage and $12,680 for family coverage. These amounts are about 5 percent higher than premiums were last year. Enrollment in high-deductible health plans with a savings option increased to 8 percent of covered workers, up from 5 percent in 2007. Deductibles in preferred provider organizations, the plan type with the largest enrollment, increased from 2007 levels. This paper also provides new insights into firms' offering wellness programs and retiree health benefits.     

Peer Reviewed: Workplace Health Promotion in Washington State

The workplace is a powerful setting to reach large numbers of at-risk adults with effective chronic disease prevention programs. Missed preventive care is a particular problem for workers with low income and no health insurance. The costs of chronic diseases among workers — including health care costs, productivity losses, and employee turnover — have prompted employers to seek health promotion interventions that are both effective and cost-effective. The workplace offers 4 avenues for delivering preventive interventions: health insurance, workplace policies, health promotion programs, and communications. For each of the avenues, the evidence base describes a number of preventive interventions that are applicable to the workplace. On the basis of the evidence and of our work in Washington State, we present a public health approach to preventing chronic diseases via the workplace. In addition to relying on the evidence, this approach makes a compelling business case for preventive interventions to employers.     

Individual versus job-based health insurance: weighing the pros and cons

Although the majority of insured Americans receive their health insurance through their employers, some depend on the individual health insurance market. However, with increased criticism of the lack of choice in group coverage and various proposals including subsidies or tax credits to decrease the number of uninsured, the individual market may start to play a larger role. In this paper we conclude that although efficient large-group insurance will appropriately continue to exist, the individual market appears to be improving, in both administrative cost and protection against high premiums associated with high risk. For diverse workers now in small groups with little plan choice, the individual market might become a reasonable alternative.     

Employer-sponsored health insurance and mandated benefit laws

Regulations for the content of private health plans, called mandated benefit laws, are widespread and growing in the United States, at both state and federal levels. Three aspects of these laws are examined: their current scope; some economic reasons for their existence; and the theory and empirical evidence for their effects in health insurance markets. A growing body of literature suggests that society is paying a high price for enhanced coverage via mandated benefits. These laws increase insurance premiums, cause declines in wages and other fringe benefits, and lead some employers and their workers to forgo health benefits altogether. The cost of mandated benefit laws falls disproportionately on workers in small firms.