“Policy Options for Filling Gaps in the Health Insurance Coverage of Older Workers and Early Retirees,” in Ensuring Health and Income Security for an Aging Workforce. P. Budetti, R. Burkhauser, J. Gregory, and H. Hunt, eds. Upjohn Institute: Kalamazoo, MI 2001.
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This paper uses data from the 1997 National Health Interview Survey to compare workers who decline employers ‘offers of health insurance (decliners) with comparison groups of workers who take up offers of employer coverage and those who do not have such offers. Uninsured decliners fare much worse than coverage takers on every mental health measure. While the evidence on physical health measures is somewhat mixed, decliners who are not healthy appear to have greater difficulty obtaining needed services than do workers who take up employer coverage, although decliners tend to have somewhat better access than do the uninsured who are not offered such coverage.
“The Health Status of Workers Who Decline Employer-Sponsored Insurance,” Health Affairs 20(6):180-87, with Linda J. Blumberg, 2001.
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“The Not-So-Simple Economics (and Politics) of Medicare Reform,” in The Political Economy of Health Care Reforms, Huizhong Zhou, ed. Upjohn Institute: Kalamazoo, MI. 2001.
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Most of the uninsured are either workers or family members of workers, and most Americans who are covered get their health insurance through the workplace. These facts motivate our study of two questions: Why do some workers have employer-sponsored health insurance while others do not? What policy initiatives are best suited to the specific conditions of most uninsured workers? We survey the literature on the working uninsured and use 1999 Current Population Survey data to paint a more detailed portrait of the working uninsured that can inform policy discussions. We report some relatively familiar findings. Workers in small firms, and those who work in retail, construction, and service firms, are disproportionately likely to be uninsured. Workers who earn low wages, work part-time, have short job tenure, and who live in households with low incomes are also among the more likely to be uninsured. Single workers and workers married to non-workers are more likely to be uninsured than members of two-earner couples. Men are slightly more likely to be uninsured than women, and blacks and especially Hispanics are more likely than whites to be uninsured. More than half of uninsured workers (59 percent) work for an employer that does not sponsor health insurance, 21 percent are not eligible for their employer’s plan, and 20 percent decline the coverage they are offered at work. We explore deeper and more policy-relevant characteristics of the working uninsured through a series of two-dimensional cross-tabulations. The first important finding is that workers in larger firms have higher sponsorship, eligibility, and take-up rates in every industry. Thus, even though there is considerable inter-industry variation, firm size is more important than industry as a determinant of coverage possibilities for workers. Across industries, sponsorship rates vary more than take-up rates, which vary more than eligibility rates. Sponsorship and take-up are correlated, which implies that underlying worker demand—and willingness to pay—for health insurance is a key part of firm-sponsorship decisions. Inter-industry sponsorship rates vary more than coverage. This fact is mostly due to spousal coverage, which is extremely important for many low wage and part-time workers. Income is more important than family type as a determinant
of sponsorship, eligibility, and take-up. Income and wages are highly correlated, though not perfectly, and more of either is associated with higher sponsorship, eligibility, and take-up. Eligibility is not contingent on race, suggesting that anti-discrimination laws appear to be working in this regard. Hispanics are less likely to have offers of health insurance from their employers (due to being less likely to work for a firm that sponsors a health plan), but conditional on offer, all races are equally likely to take-up the employer-sponsored health insurance offer they receive. Blacks are less likely than whites to have spousal coverage, which leads them to have lower overall coverage rates than whites despite being equally likely to have employer-sponsored insurance from their own employer. We define an effective policy as one that would reach many uninsured workers, and an efficient policy as one that would extend eligibility to more uninsured than to the already insured. Workers who work in small firms, for low wages, and who live in households with low incomes are the natural targets of coverage expansion policies for the working uninsured. In general, we show that targeting subsidy dollars to low-income workers would be the most efficient policy, since they are the most likely to be uninsured. Although targeting low wage workers is the most effective option, it is less efficient than targeting low-income workers because many low-wage workers are married to higher-wage workers, live in households with higher incomes, and are already insured. Targeting workers in small firms is the least efficient of the three options, since many high-wage, high-income, and already insured workers also work in small firms. Among low-income workers, all family types are similarly efficient to target, because low income workers are much less likely to have coverage for all family types. Because nearly half of uninsured workers are single and without children, the most effective policies will need to include these workers. Employer or individual subsidies could expand coverage considerably if designed and implemented properly, either through tax credits or direct subsidies or some combination. We discuss the major design issues and tradeoffs involved in all these policy choices. The most important policy implications we draw from our findings and others are: (1) employer tax credits are less efficient— because so many firms already offer and workers are already covered—but may be easier to administer; (2) more efficient individual income-based subsidies require either the tax system or a state welfare agency to make income-eligibility determinations and thus a more elaborate bureaucratic apparatus; (3) subsidies must be large—relative to the price of an insurance policy—for low- and moderate-income workers to use them to purchase insurance; (4) subsidies should be usable for employer-sponsored as well as non-group insurance; and (5) tax credits must be refundable and prospective to be helpful to low-income populations. Health insurance subsidy dollars will go farther if administrative, risk pooling, and purchasing economies of scale can be taken advantage of through existing or new institutions.
“Workers without Health Insurance: Who are They and How Can Policy Reach Them?” W.W. Kellogg Foundation, Community Voices Publication. With Bowen Garrett and Emily K. Greenman. 2001.
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