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Sommers BD. The Role of Individual Coverage Health Reimbursement Arrangements-The Liger of Health Insurance? JAMA HEALTH FORUM 2024; 5:e242937. [PMID: 39052284 DOI: 10.1001/jamahealthforum.2024.2937] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 07/27/2024] Open
Abstract
This JAMA Forum discusses aspects of individual coverage health reimbursement arrangements and their expanded use over the last few years.
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Affiliation(s)
- Benjamin D Sommers
- Department of Health Policy and Management, T. H. Chan School of Public Health, Harvard University, Boston, Massachusetts
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Hager K, Emanuel E, Mozaffarian D. Employer-Sponsored Health Insurance Premium Cost Growth and Its Association With Earnings Inequality Among US Families. JAMA Netw Open 2024; 7:e2351644. [PMID: 38227313 PMCID: PMC10792464 DOI: 10.1001/jamanetworkopen.2023.51644] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [MESH Headings] [Grants] [Track Full Text] [Journal Information] [Submit a Manuscript] [Subscribe] [Scholar Register] [Received: 07/21/2023] [Accepted: 11/27/2023] [Indexed: 01/17/2024] Open
Abstract
Importance Costs of employer-sponsored health care benefits have increased faster than workers' wages for several decades, with important implications for disparities in earnings and wage stagnation. Objective To quantify how growth in employer-sponsored health insurance (ESI) premiums may have been associated with reduced annual wages, disparities in earnings by race and ethnicity and wage level, and wage stagnation among US families with ESI. Design, Setting, and Participants In this economic evaluation, serial cross-sectional analyses were performed of US families receiving ESI from 1988 to 2019 based on data from the Consumer Expenditure Survey, Kaiser Employer Health Benefits Survey, US Census Bureau's Current Population Survey, and federal payroll taxation rates. Statistical analysis was conducted from February 2022 to July 2023. Main Outcomes and Measures Percentage of annual compensation associated with health care premiums (after accounting for tax deductibility) and lost wages associated with growth in cost of premiums from 1989 to 2019 based on 1988 compensation. To assess disparities, analyses were stratified by race and ethnicity and wage level. Results In 1988, 44.7 million individuals (head of household: mean [SD] age, 43.3 [13.1] years; 30.1% were female; and 2.4% identified as Asian, 6.2% as Hispanic, 8.6% as non-Hispanic Black, and 82.8% as non-Hispanic White) were covered by ESI family plans; this number remained similar in 2019 at 44.8 million individuals (head of household: mean [SD] age, 47.1 [12.9] years; 41.3% were female; and 1.3% identified as Asian, 9.9% as Hispanic, 9.9% as non-Hispanic Black, and 78.9% as non-Hispanic White). In 1988, the mean (SD) household size was 3.3 (1.3) people, and in 2019, it was 3.4 (1.3) people. If ESI costs had remained at the same proportion of the 1988 average compensation package, then in 2019, the median US family with ESI could have earned $8774 (95% CI, $8354-$9195) more in annual wages. During all 32 years, health care premiums as a percentage of compensation were greater for non-Hispanic Black and Hispanic families than for non-Hispanic White families. By 2019, 13.8% (95% CI, 13.5%-14.1%) of compensation among non-Hispanic White families with ESI went to premium costs compared with 19.2% (95% CI, 18.8%-19.7%) among non-Hispanic Black families and 19.8% (19.3%-20.3%) among Hispanic families with ESI. In 2019, health care premiums as a percentage of compensation at the 95th percentile of earnings for families with ESI were 3.9% (95% CI, 3.8%-4.0%) compared with 28.5% (95% CI, 27.8%-29.2%) at the 20th percentile of earnings. From 1988 to 2019, the mean cumulative lost earnings associated with growth in health care premiums for the median US family with ESI was $125 340 (95% CI, $120 155-$130 525) in 2019 dollars, 4.7% of earnings over the 32-year period. Conclusions and Relevance This economic evaluation of US families receiving ESI suggests that 3 decades of increasing health care premiums were likely associated with reduced annual earnings and increased earnings inequality by race and ethnicity and wage level and were meaningfully associated with wage stagnation.
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Affiliation(s)
- Kurt Hager
- Department of Population and Quantitative Health Sciences, UMass Chan Medical School, Worcester, Massachusetts
- Food Is Medicine Institute, Friedman School of Nutrition Science and Policy, Tufts University, Boston, Massachusetts
| | - Ezekiel Emanuel
- Perelman School of Medicine, University of Pennsylvania, Philadelphia
- The Wharton School, University of Pennsylvania, Philadelphia
| | - Dariush Mozaffarian
- Food Is Medicine Institute, Friedman School of Nutrition Science and Policy, Tufts University, Boston, Massachusetts
- Division of Cardiology, Tufts Medical Center and Tufts University School of Medicine, Boston, Massachusetts
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Meiselbach MK, Abraham JM. Do minimum wage laws affect employer-sponsored insurance provision? JOURNAL OF HEALTH ECONOMICS 2023; 92:102825. [PMID: 37897833 DOI: 10.1016/j.jhealeco.2023.102825] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Received: 12/22/2022] [Revised: 09/25/2023] [Accepted: 09/27/2023] [Indexed: 10/30/2023]
Abstract
Employers may respond to minimum wage increases by adjusting their health benefits. We examine the impact of state minimum wage increases on employer health benefit offerings using the 2002-2020 Medical Expenditure Panel Survey - Insurance/Employer Component data. Our primary regression specifications are difference-in-differences models that estimate the relationship between within-state changes in employer-sponsored insurance and minimum wage laws over time. We find that a $1 increase in minimum wages is associated with a 0.92 percentage point (p.p.) decrease in the percentage of employers offering health insurance, largely driven by small employers and employers with a greater share of low-wage employees. A $1 increase is also associated with a 1.83 p.p. increase in the prevalence of plans with a deductible requirement, but we do not find consistent evidence that other benefit characteristics are affected. We find no consequent change in uninsurance, likely explained by an increase in Medicaid enrollment.
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Affiliation(s)
- Mark K Meiselbach
- Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, United States of America.
| | - Jean M Abraham
- Division of Health Policy and Management, University of Minnesota School of Public Health, Minneapolis, MN, United States of America
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4
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Sen AP. Research and Policy to Strengthen the Employer-Sponsored Health Insurance Market. Health Serv Res 2022; 57:439-442. [PMID: 35383928 DOI: 10.1111/1475-6773.13982] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 03/17/2022] [Revised: 03/25/2022] [Accepted: 03/29/2022] [Indexed: 11/25/2022] Open
Affiliation(s)
- Aditi P Sen
- Director of Research and Policy, Health Care Cost Institute, 1100 G Street NW, Suite 600, Washington, DC
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Taylor WC, Winslade WJ. Nonsmokers-only hiring policies: personal liberty vs. promoting public health. ETHICS & BEHAVIOR 2021. [DOI: 10.1080/10508422.2021.1932501] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 10/20/2022]
Affiliation(s)
- Wendell C. Taylor
- Institute for Bioethics and Health Humanities, Department of Preventive Medicine and Population Health, The University of Texas Medical Branch
| | - William J. Winslade
- Institute for Bioethics and Health Humanities, Department of Preventive Medicine and Population Health, The University of Texas Medical Branch
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Meiselbach MK, Eisenberg MD, Bai G, Sen A, Anderson GF. Labor Market Concentration and Worker Contributions to Health Insurance Premiums. Med Care Res Rev 2021; 79:198-206. [PMID: 33957807 DOI: 10.1177/10775587211012992] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/15/2022]
Abstract
In concentrated labor markets, where workers have fewer employers to choose from, employers may exploit their monopsony power by contributing less to workers' health benefits. This study examined if labor market concentration was associated with higher worker contributions to health plan premiums. We combined publicly available data from the Census to calculate labor market concentration and the Medical Expenditure Panel Survey Insurance/Employer Component to determine premium contributions from 2010 to 2016 for metropolitan areas. After controlling for year fixed-effects and market characteristics, we found that higher labor market concentration was associated with higher worker contributions to health plan premiums, lower take-home income, and no change in employer contributions to premiums, consistent with the hypothesis that greater labor market concentration is associated with less generous health benefits. When evaluating the effects of mergers and acquisitions on labor markets, regulatory agencies should critically assess worker contributions to health insurance premiums.
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Affiliation(s)
| | | | - Ge Bai
- Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, USA.,Johns Hopkins Carey Business School, Baltimore, MD, USA
| | - Aditi Sen
- Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, USA
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Goh OQ, Islam AM, Lim JCW, Chow WC. Towards health market systems changes for migrant workers based on the COVID-19 experience in Singapore. BMJ Glob Health 2020; 5:bmjgh-2020-003054. [PMID: 32873597 PMCID: PMC7467532 DOI: 10.1136/bmjgh-2020-003054] [Citation(s) in RCA: 11] [Impact Index Per Article: 2.8] [Reference Citation Analysis] [Key Words] [Track Full Text] [Download PDF] [Figures] [Journal Information] [Subscribe] [Scholar Register] [Received: 06/01/2020] [Revised: 08/04/2020] [Accepted: 08/09/2020] [Indexed: 01/31/2023] Open
Affiliation(s)
- Orlanda Q Goh
- Department of Internal Medicine, Singapore General Hospital, Singapore .,SingHealth Duke-NUS Medicine Academic Clinical Programme, SingHealth Duke-NUS Academic Medical Centre, Singapore
| | - Amina M Islam
- SingHealth Duke-NUS Global Health Institute, SingHealth Duke-NUS Academic Medical Centre, Singapore
| | - John C W Lim
- SingHealth Duke-NUS Global Health Institute, SingHealth Duke-NUS Academic Medical Centre, Singapore.,Centre of Regulatory Excellence, Duke-NUS Medical School, Singapore
| | - Wan-Cheng Chow
- SingHealth Duke-NUS Medicine Academic Clinical Programme, SingHealth Duke-NUS Academic Medical Centre, Singapore.,SingHealth Duke-NUS Global Health Institute, SingHealth Duke-NUS Academic Medical Centre, Singapore.,Division of Medicine, Singapore General Hospital, Singapore.,Duke-NUS Medical School, Singapore
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Anand P. Health Insurance Costs and Employee Compensation: Evidence from the National Compensation Survey. HEALTH ECONOMICS 2017; 26:1601-1616. [PMID: 28026085 DOI: 10.1002/hec.3452] [Citation(s) in RCA: 2] [Impact Index Per Article: 0.3] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Received: 03/16/2015] [Revised: 08/24/2016] [Accepted: 10/13/2016] [Indexed: 06/06/2023]
Abstract
This paper examines the relationship between rising health insurance costs and employee compensation. I estimate the extent to which total compensation decreases with a rise in health insurance costs and decompose these changes in compensation into adjustments in wages, non-health fringe benefits, and employee contributions to health insurance premiums. I examine this relationship using the National Compensation Survey, a panel dataset on compensation and health insurance for a sample of establishments across the USA. I find that total hourly compensation reduces by $0.52 for each dollar increase in health insurance costs. This reduction in total compensation is primarily in the form of higher employee premium contributions, and there is no evidence of a change in wages and non-health fringe benefits. These findings show that workers are absorbing at least part of the increase in health insurance costs through lower compensation and highlight the importance of examining total compensation, and not just wages, when examining the relationship between health insurance costs and employee compensation. Copyright © 2016 John Wiley & Sons, Ltd.
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Kosteas VD, Renna F. Plan choice, health insurance cost and premium sharing. JOURNAL OF HEALTH ECONOMICS 2014; 35:179-188. [PMID: 24709039 DOI: 10.1016/j.jhealeco.2014.03.002] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Received: 12/20/2011] [Revised: 01/31/2014] [Accepted: 03/06/2014] [Indexed: 06/03/2023]
Abstract
We develop a model of premium sharing for firms that offer multiple insurance plans. We assume that firms offer one low quality plan and one high quality plan. Under the assumption of wage rigidities we found that the employee's contribution to each plan is an increasing function of that plan's premium. The effect of the other plan's premium is ambiguous. We test our hypothesis using data from the Employer Health Benefit Survey. Restricting the analysis to firms that offer both HMO and PPO plans, we measure the amount of the premium passed on to employees in response to a change in both premiums. We find evidence of large and positive effects of the increase in the plan's premium on the amount of the premium passed on to employees. The effect of the alternative plan's premium is negative but statistically significant only for the PPO plans.
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Abstracts. Am J Health Promot 2014. [DOI: 10.4278/0890-1171-28.4.275] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/17/2022]
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12
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Sommers BD, Oellerich D. The poverty-reducing effect of Medicaid. JOURNAL OF HEALTH ECONOMICS 2013; 32:816-832. [PMID: 23835200 DOI: 10.1016/j.jhealeco.2013.06.005] [Citation(s) in RCA: 39] [Impact Index Per Article: 3.5] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Received: 10/11/2012] [Revised: 05/02/2013] [Accepted: 06/13/2013] [Indexed: 06/02/2023]
Abstract
Medicaid provides health insurance for 54 million Americans. Using the Census Bureau's Supplemental Poverty Measure (which subtracts out-of-pocket medical expenses from family resources), we estimated the impact of eliminating Medicaid. In our counterfactual, Medicaid beneficiaries would become uninsured or gain other insurance. Counterfactual medical expenditures were drawn stochastically from propensity-score-matched individuals without Medicaid. While this method captures the importance of risk protection, it likely underestimates Medicaid's impact due to unobserved differences between Medicaid and non-Medicaid individuals. Nonetheless, we find that Medicaid reduces out-of-pocket medical spending from $871 to $376 per beneficiary, and decreases poverty rates by 1.0% among children, 2.2% among disabled adults, and 0.7% among elderly individuals. When factoring in institutionalized populations, an additional 500,000 people were kept out of poverty. Overall, Medicaid kept at least 2.6 million-and as many as 3.4 million-out of poverty in 2010, making it the U.S.'s third largest anti-poverty program.
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Affiliation(s)
- Benjamin D Sommers
- Department of Health Policy and Management, Harvard School of Public Health, 677 Huntington Ave, Kresge Room 406, Boston, MA 02115, United States; Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, United States.
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Miller GE, Selden TM. Tax Subsidies for Employer-Sponsored Health Insurance: Updated Microsimulation Estimates and Sensitivity to Alternative Incidence Assumptions. Health Serv Res 2013; 48:866-83. [DOI: 10.1111/1475-6773.12037] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/28/2022] Open
Affiliation(s)
- G. Edward Miller
- Division of Modeling and Simulation; Center for Financing, Access and Cost Trends; Agency for Healthcare Research and Quality; Rockville MD
| | - Thomas M. Selden
- Division of Modeling and Simulation; Center for Financing, Access and Cost Trends; Agency for Healthcare Research and Quality; Rockville MD
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Vistnes J, Selden T. Premium growth and its effect on employer-sponsored insurance. ACTA ACUST UNITED AC 2011; 11:55-81. [PMID: 21331581 DOI: 10.1007/s10754-011-9088-4] [Citation(s) in RCA: 5] [Impact Index Per Article: 0.4] [Reference Citation Analysis] [Abstract] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 07/01/2010] [Accepted: 02/01/2011] [Indexed: 11/28/2022]
Abstract
We use variation in premium inflation and general inflation across geographic areas to identify the effects of downward nominal wage rigidity on employers' health insurance decisions. Using employer level data from the 2000 to 2005 Medical Expenditure Panel Survey-Insurance Component, we examine the effect of premium growth on the likelihood that an employer offers insurance, eligibility rates among employees, continuous measures of employee premium contributions for both single and family coverage, and deductibles. We find that small, low-wage employers are less likely to offer health insurance in response to increased premium inflation, and if they do offer coverage they increase employee contributions and deductible levels. In contrast, larger, low-wage employers maintain their offers of coverage, but reduce eligibility for such coverage. They also increase employee contributions for single and family coverage, but not deductibles. Among high-wage employers, all but the largest increase deductibles in response to cost pressures.
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Affiliation(s)
- Jessica Vistnes
- Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, 540 Gaither Road, Rockville, MD 20850, USA.
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Sood N, Ghosh A, Escarce JJ. Employer-sponsored insurance, health care cost growth, and the economic performance of U.S. Industries. Health Serv Res 2009; 44:1449-64. [PMID: 19500165 DOI: 10.1111/j.1475-6773.2009.00985.x] [Citation(s) in RCA: 10] [Impact Index Per Article: 0.7] [Reference Citation Analysis] [Abstract] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/30/2022] Open
Abstract
OBJECTIVE To estimate the effect of growth in health care costs that outpaces gross domestic product (GDP) growth ("excess" growth in health care costs) on employment, gross output, and value added to GDP of U.S. industries. STUDY SETTING We analyzed data from 38 U.S. industries for the period 1987-2005. All data are publicly available from various government agencies. STUDY DESIGN We estimated bivariate and multivariate regressions. To develop the regression models, we assumed that rapid growth in health care costs has a larger effect on economic performance for industries where large percentages of workers receive employer-sponsored health insurance (ESI). We used the estimated regression coefficients to simulate economic outcomes under alternative scenarios of health care cost inflation. RESULTS Faster growth in health care costs had greater adverse effects on economic outcomes for industries with larger percentages of workers who had ESI. We found that a 10 percent increase in excess growth in health care costs would have resulted in 120,803 fewer jobs, US$28,022 million in lost gross output, and US$14,082 million in lost value added in 2005. These declines represent 0.17 to 0.18 percent of employment, gross output, and value added in 2005. CONCLUSION Excess growth in health care costs is adversely affecting the economic performance of U.S. industries.
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Brief report: Quantifying the impact of autism coverage on private insurance premiums. J Autism Dev Disord 2009; 39:953-7. [PMID: 19214727 DOI: 10.1007/s10803-009-0701-z] [Citation(s) in RCA: 21] [Impact Index Per Article: 1.4] [Reference Citation Analysis] [Abstract] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 09/27/2008] [Accepted: 01/22/2009] [Indexed: 10/21/2022]
Abstract
Many states are considering legislation requiring private insurance companies to pay for autism-related services. Arguments against mandates include that they will result in higher premiums. Using Pennsylvania legislation as an example, which proposed covering services up to $36,000 per year for individuals less than 21 years of age, this paper estimates potential premium increases. The estimate relies on autism treated prevalence, the number of individuals insured by affected plans, mean annual autism expenditures, administrative costs, medical loss ratio, and total insurer revenue. Current treated prevalence and expenditures suggests that premium increases would approximate 1%, with a lower bound of 0.19% and an upper bound of 2.31%. Policy makers can use these results to assess the cost-effectiveness of similar legislation.
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Abstract
In 1997, nearly two-thirds of married couples with children under age 18 were dual-earner couples. Such families may have a variety of insurance options available to them. If so, declining a high employee premium contribution may be a mechanism for one spouse to take money wages in lieu of coverage while the other spouse takes coverage rather than high wages. Employers may use these preferences and the size of premium contributions to encourage workers to obtain family coverage through their spouse. The purpose of this paper is to explore the effects of labor force composition, particularly the proportion of dual-earner couples in the labor market, on the marginal employee premium contribution (marginal EPC) for family coverage. We analyze data from the 1997-2001 Medical Expenditure Panel Survey--Insurance Component (MEPS-IC) List Sample of private establishments. We find strong evidence that the marginal EPC for family coverage is higher when there is a larger concentration of women in the workforce, but only in markets with a higher proportion of dual-earner households.
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Affiliation(s)
- Jessica Primoff Vistnes
- Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, USA
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