What's Driving the Downward Trend in Employer-Sponsored Health Insurance?
Abstract
Objective. We investigate the factors driving the downward trend in employer
sponsored health insurance (ESI) coverage between 1999 and 2002 for low- and middle-income
workers, and assess their insurance options in the absence of ESI coverage.
Data. We use the 1999 and 2002 rounds of the National Survey of America’s Families
(NSAF), supplemented with ESI premiums from the Medical Expenditure Panel
Survey, as well as other state- and county-level data from a variety of sources. The
sample includes workers between the ages of 19 and 64.
Study Design. We first estimate linear probability models of the probability of having
an ESI offer and, for those with an offer, the probability of taking up ESI coverage, using
two-stage least square regression on the 2002 worker sample. We then use Oaxaca–
Blinder regression-based decomposition methods to identify the factors that explain the
changes in ESI offer and take-up between 1999 and 2002.
Principal Findings. We find that while low-income workers are more likely to be
uninsured and are most vulnerable to the loss of ESI coverage, many middle-income
workers are also in a precarious position when faced with the loss of ESI coverage. Many
low- and middle-income workers have few coverage options in the absence of ESI. This
is particularly problematic for low-income workers: only 13 percent have a spouse with
an ESI offer and the nongroup premium they face increased at a much higher rate than
for middle-income workers. Finally, we find that the drop in ESI offers between 1999
and 2002 was driven largely by changes in nature of the workers’ jobs, while the drop in
ESI take-up was driven largely by rising ESI premiums.
Conclusions. Policies that shore up the ESI system are important for both low- and
middle-income workers, as both are vulnerable to a loss of insurance coverage in the
absence of ESI. Over time, the potential coverage options available to low- and middle-income
workers in the absence of ESI have narrowed as nongroup premiums have
increased. While public coverage has provided some protection from that increase for
low-income workers, middle-income workers are much less likely to have access to
public protection.
Description
The following supplementary material for this article is available online:
APPENDIX: Regression Results of ESI Offer and Take-up Model for 2002
Workers.
The article of record as published may be found at http://dx.doi.org/10.1111/j.1475-6773.2006.00590.x
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.Collections
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