To Offer or Not to Offer: The Role of Price in Employers' Health Insurance Decisions
Health Services Research
Authors: M. Susan Marquis and Stephen H. Long
Principal Findings:
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.
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.
<http://www.hsr.org/ArticleAbstracts/Marquis365.cfm>http://www.hsr.org/ArticleAbstracts/Marquis365.cfm
Comment provided 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.
Source: "To offer or not to offer." Health Services Research 2001;36:937-958.