Employer Willingness to Offer Health Insurance Benefits to
Employees
-
Opening excerpt from findings of M. Susan Marquis and Stephen H. Long
of Health Services Research from "To Offer or Not to Offer: The Role of Price in Employers' Health Insurance
Decisions"
-
-
Sumner Rosen, Professor Emeritus of Social Welfare Policy at Columbia University, responds on the problems of linking insurance to employment and the misplaced efforts of foundations.
-
Donald Light expands on the issue and then comments on the Bush administration's unusual approach to health policy.
-
Beth Capell comments on major factors other than price
influence what employers are willing to offer and that price might just be the
excuse they latch on to for convenience.
From findings of M. Susan Marquis and Stephen H. Long
:
Changes in price affect decisions to offer insurance: however, even a 40 percent reduction in premiums would lead only to 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.
And 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.
Their original article is availabe at CLICK
HERE
Comment by Prof. Donald W. Light:
In a detailed study of private employers, Marquis and Long found that 51.5% of small employers offer health insurance (many with high co-premiums that workers feel they cannot afford), but they also found that only 58.1% of all other employers offered health insurance. This is a strikingly low number for a system based on employers in a large, affluent nation.
The authors also found once again that the continued efforts by the Robert Wood Johnson Foundation and others to increase the number of employers offering coverage by supporting lower premiums does not work. Even if offered a 40 percent reduction in premiums, only a few percent more employers said they would offer health insurance. These efforts to shore up an inherently partial system, which provides limited and variable coverage at very high prices to employers as well as to employees, have been tried for over 15 years. It seems time for the boards of Kaiser Family Foundation, RWJF, and others to face the data and turn to more equitable and efficient approaches.
Sumner M. Rosen, Ph.D.:
It's been clear for a long time that the employer base for health coverage will shrink irreversibly. Cost data like this tell part of the story; the more important part is the erosion of the employer-employee linkage as job tenure shortens and multiple jobs over one's working life become the dominant pattern. Employers will continue to shrink the core and expand the periphery of the work force through downsizing, contracting out and a host of other moves amply documented in the business press. That
Robert Woods Johnson persists in this futile effort is discouraging evidence of failure to learn from substantial and growing evidence that new initiatives are needed. The right wing virus of ideological resistance to a federal program appears to have infected people and institutions that should know better.
Donald Light, Ph.D.:
Besides trying to get free-riding employers to offer affordable health insurance, the other great white hope of foundation board members is CHIP and its extensions. They have poured tens of millions of private money into trying to make this new public patch, in the patchwork quilt of public health insurance programs, work. It would be instructive to hear from Ted Marmor and others why they think CHIP and other patches have low uptake and costly problems, while Medicare did not and does not.
Closely related to this question is another approach: just do it. Today's NYTimes article announces that President Bush simply decided that Medicare would cover the wide-ranging, messy and costly care that patients with Alzheimer's disease need. It's a rather major advance for a tragic group that are an insurer's nightmare. It's "incremental reform" but without even the trappings of "reform." No debate. No bill. He just did it. What are the implications of this for participants and readers
at this website?
Beth Capell, Ph.D.:
It would be terrific if one of our academic colleagues did a state-by-state comparison on this topic.
Such a comparison would show that in California, where premiums are lower than almost anywhere else in the country, employers are substantially less likely to offer coverage, particularly to low-income workers, than elsewhere in the country where premiums are higher. This is also true within California: Bay Area employers facing higher premiums are more likely to offer coverage than Los Angeles employers whose relatively low premiums reflect a ferociously competitive market for both plans and providers.
Similarly, in California, in the early-mid 1990s when premiums were level or declining, employers shifted cost to workers and the number of uninsured remained stubbornly the same or increased--while in the late 90's as premiums in California increased, the number of uninsured declined and employers ceased shifting costs to workers---because of the tight labor market. Again, price of premiums was not directly and simply related to levels of uninsurance or worker share of premium.
While employers may claim that price is a major factor, experience suggests otherwise. Other factors, such as the nature of the labor market and the rate of unionization, are better explanatory factors for underlying trends.
Price is merely the polite term for employer freedom to ignore the need of working people for affordable health care.
|