Employer choices of family premium sharing
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Employer choices of family premium sharing∗ Jessica Primoff Vistnes · Michael A. Morrisey · Gail A. Jensen
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Springer Science + Business Media, Inc. 2006
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 dualearner 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. Keywords Employer-sponsored health insurance coverage . Employee premium contributions . Two-worker households ∗ This study was funded by the Employee Benefits Security Administration of the U.S. Department of Labor and was prepared for the conference “Employee Benefits and Two-Earner Households,” May 8, 2004, Washington, D.C. Jessica Vistnes received no funding for her participation in the project.The research in this paper was conducted while Jessica Vistnes was also a Census Bureau research associate at the Center for Economic Studies. Research results and conclusions expressed are those of the authors and do not necessarily indicate concurrence by the Bureau of the Census, the Department of Health and Human Services or the Agency for Healthcare Research and Quality. This paper has been screened to insure that no confidential information has been revealed.
J. P. Vistnes Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality M. A. Morrisey Lister Hill Center for Health Policy, University of Alabama at Birmingham G. A. Jensen Institute for Gerontology, Wayne State University Springer
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J. P. Vistnes et al.
JEL Code I11 – Analysis of Health Care Markets During the last decade we have seen the reemergence of rapidly increasing premiums for employer sponsored health insurance. Jon Gabel and colleagues report that premiums for employer sponsored coverage have increased at a rate greater than general inflation in every year since 1996 and at double digit rates since 2001. Employers have responded to these increases by increasing the size of employee premium contributions. Premium contributions for single coverage increased by 57 percent and family coverage by 49 percent over the period 2001 to 2004 (Gabel et al., 2004). Cutler (2002) has argued that
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