Changes in Job -Related Health
Insurance, 1996-9

 

' ' MEPS Chartbook No. l0

Medical Expenditure Panel Survey

" .MEPS x4;

Premiums
Plan offers Enrollment and employee
3% contributions
- \

www.ahrq.gov
Agency for Healthcare Research and Quality

 

 

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LIBRARY 1 ‘ ,

UNIVERSITY or

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The estimates in this report are based on the most recent data available from MEPS at the time the report was written. However, selected

elements of MEPS data may be revised on the basis of additional analyses, which could result in slightly different estimates from those shown
here. Please check the MEPS Web site for the most current file releases—

 

 

www.meps.ahrq.gov

AHRQ is the lead Federal agency charged with supporting research designed to improve the quality of health care. reduce its cost, address
patient safety and medical errors, and broaden access to essential services.AHRQ sponsors and conducts research that provides evidence-based
information on health care outcomes; quality; and cost, use, and access.The information helps health care decisionmakers—patients and clinicians,
health system leaders. and policymakers—make more informed decisions and improve the quality of health care services.

 

 

H9

MEPS Chartbook No. I0 by '[ 3 "/w

............................................«............L .......... .. 6 :‘g‘ C)
James M. Branscome, MS. ‘~' l
Beth Levin Crimmel, M.S. m "

gufiu

Suggested citation:

Branscome JM. Crimmel BL. Changes in job-related health insurance, I996-99. Rockville (MD):Agency for Healthcare Research and Quality;
2002. MEPS Chartbook No. IO. AHRQ Pub. No. 02-0030.

Will am 3.1093

 

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Offers and Enrollment

The portion of private-sector
establishments offering health insurance
rose from 52.9% to 58.4% from I996 to
I999. In I999, almost 90% of all
employees worked in establishments
that offered such coverage.

From I996 to I999, the percent of
establishments offering health insurance
rose, but the portion of private-sector
employees actually eligible for such
coverage fell. Even among eligible
workers, insurance enrollment dropped.

In I999, employees with coverage stood
at 57.6% of all those working in the
private sector, down from 60. l% in I996.

Characteristics of
Offers

About 30% of establishments offered
their employees a choice of health
insurance plans in I999.This rate was up
dramatically from 2l.5% in I996.

The percent of employees enrolled in
exclusive-provider and any-provider
plans declined from I996 to l999.Any-
provider plans had the lowest
enrollments for each year.

For both single and family plans, more
workers were covered by mixed-
provider arrangements than either
other type, and the mixed-provider
enrollment rates for both single and
family coverage rose over the 4 years.

More workers were covered by family
plans than single plans each year, but the
portion with single coverage rose over
the period.

The portion of establishments offering
any plan not requiring an employee
contribution to the premium fell to
48.5% for single coverage and 29.0% for
family coverage over the 4 years.

Premiums and Employee
Contributions

From I996 to I999, health insurance
premiums rose l6.7% for single coverage
and 22.3% for family coverage.

In I999, the average annual single
premium was $2,325 and the average
family premium was $6,058.

Exclusive-provider plans had the
smallest overall premium increases and
the lowest annual premiums of the three
plan provider types.

In general, employers maintained a
relatively constant level of cost sharing
with their employees over this 4-year
period.While the dollar amounts paid by
employees rose considerably, the
percent of the total premium that they
paid did not change much.

Agency for Healthcare Research and Quality

 

.496 Medical Expenditure Panel Survey

Definitions of Terms

Health insurance plan—An insurance con-
tract that provides hospital and/or physician
coverage to an employee or retiree for an
agreed-upon fee (premium) for a defined benefit
period.

Offer health insurance—To make available or
contribute to the cost of any health insurance
plan for current employees and/or retirees.

Premium—Agreed-upon fee paid for coverage
of medical benefits for a defined benefit period,

usually a calendar year. Premiums can be paid by
employers. unions, employees, or shared by both
the insured individual and the plan sponsor.

Single coverage—Health insurance that cov-
ers the employee only.

Family coverage—Health insurance that cov-
ers the employee and the employee’s family. If a
plan offers more than one arrangement for fam-
ily coverage, premium information for a family of
four is used.

Types of health care provider arrange-
ments:

- Exclusive provider—Enrollees must go to
providers associated with the plan for all non-
emergency care in order for the costs to be
covered. Most health maintenance organizations
(HMOs), individual practice associations (IPAs).
and exclusive provider organizations (EPOs) are
exclusive-provider plans.

- Any provider—Enrollees may go to
providers of their choice with no cost incentives
to use a particular subset of providers. Most
conventional-indemnity plans are any-provider
plans.

- Mixed provider—Enrollees may go to any
provider but there is a cost incentive to use a
particular subset of providers. Most preferred
provider organization (PPO) and point-of-
service (POS) plans are mixed-provider plans.

- Managed care—Exclusive providers plus
mixed providers.

Establishment—A particular workplace or
location.

Firm—A business entity consisting of one or
more business establishments under common
ownership or control.A firm represents the
entire organization, including the company head-
quarters and all divisions, subsidiaries, and
branches.A firm may consist of a single-location
establishment, in which case the establishment
and firm are identical.

Establishment characteristics—Attributes
of an establishment that describe it or its
employees.The following characteristics are dis-
cussed in this report.

Industry:

- Agriculture, fishing, and forestry.

0 Mining.

' Construction.

° Manufacturing.

° Transportation, communication, and utilities.
0 Wholesale trade.

' Retail trade.

0 Finance, insurance. and real estate.

' Services.

Ownership:

° For profit, incorporated.

' For profit, not incorporated.
' Nonprofit.

Age of firm:

° Less than 5 years.
- 5-9 years.

° |0- l 9 years.

' 20 or more years.

Multilsingle status:
0 Two or more locations.
' One location only.

Percent full-time employees:
- Less than 25%.

- 25-49%.

° 50-74%.

° 75% or more.

Union presence:
- No union employees.
0 Has union employees.

Percent low-wage employees:
° 50% or more low wage.
- Less than 50% low wage.

Firm size:
' Less than 50 employees.
- 50 or more employees.

Employee—A person on the actual payroll.
Excludes temporary and contract workers but
includes the owner or manager if that person
works at the firm.

Full-time employee—A term defined by the
respondent Generally. a full-time employee
works 35 to 40 hours per week.

Part-time employee—An employee not
defined as full time by the respondent.

Low-wage employee—An employee who
makes $6.50 per hour or less.

Union presence—An establishment has a
union presence if any of its employees are cov-
ered by a collective bargaining agreement

Agency for Healthcare Research and Quality

MP5 Medical Expenditure Panel Survey

 

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29

Introduction

Data in This Report

Section 1
Offers and Enrollment

Section 2
Characteristics of Offers

Agency for Healthcare Research and Quality

Section 3
Premiums and Employee Contributions

Looking Ahead

 

.‘VEPS Medical Expenditure Panel Survey

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]ob—related health insurance
(insurance obtained through the
workplace) is a key underpinning of
the Nation’s health care system.
Because there is a lack of consistent,

- ongoing information about

employer—sponsored insurance,
there is limited understanding of
this important topic.

The annual Medical
Expenditure Panel Survey Insurance
Component (MEPS 1C), begun in
1996, fills much of this information
void. It allows analysts to look at
statistics for single years and to
investigate trends in the data from
year to year and for longer periods.
At the time this report was
prepared, MEPS 1C estimates were
available for 1996 through 1999.

Many factors influence whether
workers and their families obtain
health coverage through their jobs.
They include whether coverage is
offered to any employees in the
workplace, whether the specific
worker is eligible for coverage, the
types of plans offered, premium
costs, and required employee
contributions. These factors can
vary depending on establishment
characteristics such as size, industry,

and type of employee (low wage,
unionized, etc.).

This report looks at changes in
job—related health insurance
coverage in the private sector over
the period 1996—99. Section 1
discusses the extent to which
employers offered coverage over the
4 years, as well as enrollment rates
of workers. The next section looks
at the types of plans offered and the
extent to which coverage was
available without the employee
having to contribute to the
premium cost. Finally, the cost of
coverage—both overall and any
employee share—is analyzed in the
last section. Single and family plans
are discussed separately.

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The data in this report come
from the private—sector sample of
the Medical Expenditure Panel
Survey Insurance Component
(MEPS IC), conducted for the
Agency for Healthcare Research and
Quality by the US. Census Bureau.
The MEPS IC is an annual survey
of private-sector establishments and
State and local governmental units
that was first conducted for 1996. It
provides estimates of job-related
insurance both at the national level
and at the State level for 40 States
in any given year. The data shown
in this chartbook refer exclusively to
responding private—sector
establishments and their employees
and are drawn from more detailed
tables that appear on the MEPS
Web site at:

www.meps.ahrq.gov/data_pub/ic_
toc.htm

The private—sector sample size
for the MEPS IC survey was
approximately 39,000 sample units
for each of the 4 years covered in
this report. However, the final
sample size for each year varied
based on the survey nonresponse

rate, which ranged from 68% to
75% over the 4-year period; the
number of out—of—scope units; and
the number of additional sample
units purchased by State agencies, if
any, to augment the total sample
size for their State. For more
information on the MEPS IC
sample design and weighting
structure, see MEPS Methodology
Report No. 6 (Sommers IP. List
sample design of the 1996 Medical
Expenditure Panel Survey Insurance
Component. Rockville (MD):
Agency for Health Care Policy and
Research; 1999. AHCPR Pub. No.
99-0037).

In this report, “establishment”
refers to a particular workplace or
location. “Firm” refers to a business
entity consisting of one or more
establishments under common
ownership or control. “Single
coverage” refers to insurance that
covers only the employee. “Family
coverage” is for the employee and
the employee’s family. If a plan
offers more than one arrangement
for family coverage, the survey asks

for premium information for a
family of four. Please refer to the

Agency for Healthcare Research and Quality

MP8 Medical Expenditure Panel Survey
l

Agency for Healthcare Research and Quality

j

Medical Expenditure Panel Survey

Definitions of Terms shown on
page i1i for additional definitions.

When looking at the premium
data shown here, do not assume
that all health insurance plans have a
standardized package of benefits.
Because plans offer various benefits,
higher premiums may indicate that
a plan offers more generous
benefits. The variations in premiums
also may reflect differences in
medical costs, enrollment patterns,
State regulations, and plan types.

Unless otherwise noted, only
differences that are statistically
significant at the 0.05 level are
discussed in the text. In some cases,
totals may not add precisely to
100% because of rounding.

Besides the Insurance
Component, MEPS includes
components on households and
medical providers. Based on all of its
components, MEPS provides
detailed nationally representative
data on health status, health care
use and expenses, and health
insurance coverage of individuals
and families in the US. civilian
noninstitutionalized population.
More information on the other
MEPS components can be found on
the Web at:

www.meps.ahrq.gov

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Offers and
Enrollment

One of the most important
statistics concerning employer—
provided health insurance is how
many workers actually have
coverage. However, understanding
and analyzing such job—based
coverage requires knowing the
degree to which employers offer
such coverage and how many
workers are actually eligible to
enroll. A person who works in an
establishment that does not offer
health insurance obviously cannot
have such insurance, but neither can
an individual worker who fails to
meet some eligibility requirement,
such as length of service with the
employer or hours worked per year.

Agency for Healthcare Research and Quality

.WEPS Medical Expenditure Panel Survey

. The percent of private—sector

I establishments offering health
insurance rose from 1996 to 1999.
In 1996, 52.9% of establishments
offered health insurance. By 1999,
the proportion was up to 58.4%.
Generally, the same trend toward
increasing offer rates appeared

6 regardless of size, industry, type of

employee, or other establishment

characteristic.

Agency for Healthcare Research and Quality

Percent of private-sector establishments that offer

health insurance

 

 

 

IOO _

90 —

80 #
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g 40. 44

All establishments Less than 50 employees
Firm size

Medical Expenditure Panel Survey

 

I..‘EI-Iow did the percen
healthinsurancechangefirom 1996to 1999.

.........................................................................................................

t of establishments 0 '

0 For example, 41.7% of O One exception to the overall

establishments in firms with less

than 50 employees offered health (20 or more years old). The

insurance in 1996. That number
climbed to 47.1% in 1999.

0 For establishments in firms with

pattern occurred in older firms

percent of establishments in such
firms offering health insurance

declined from 69.9% in 1996 to

50 or more workers, the figures the clip from 1996 to 1999

were 93.9% in 1996 and 96.9% in
1999. In general, the larger a
firm’s size, the more likely an
establishment within the firm is
to offer health insurance.

93,9 95.6 1.3 96.9

 

 

 

 

I I996
[3 I997
I: I998
m I999

50 or more employees

Percent

establishments in older firms
had a larger percent of

firms.

Percent of private-sector establishments that offer
health insurance

65.9 67-3

 

 

 

 

Less than 5 years 5-9 years IO-l9 years 20 or more years

67.3% in 1999. However, despite

still

establishments offering insurance
than establishments in newer

I I996
C] I997
[:1 I998
I999

Was there a trend in the percent ofem emloyees]
working m establishments that off health

insurance.

The percent of employees who
worked in establishments that
offered health insurance increased
from 1996 (86.5%) to 1999
(89.1%). There were some
exceptions to this trend for specific
establishment characteristics.

0 Only three industry groups
showed a statistically significant
increase—manufacturing, retail
trade, and services.

Even with the increase, retail
trade and services still were
below the national average for
1999. Construction and
agriculture, fishing, and forestry
also fell below the national

Agency for Healthcare Research and Quality

 

 

 

   

 

 

 

7
average.
Percent of employees working in establishments
that offer health insurance
Industry group:
Agriculturevfishing and forestry ———- 56906] - '996
73 77 D I999
Construction
Rem” mde “as '
Services 85'
Total
Transportation. communication 9 I.
and utilities ‘ . - ' ' < " '» ' 2 ~ -
9|
Wholesale trade “'96 2
92 4
Finance. insurance and real estate 94 7

 

94
Mining _95 9
94.

Manufacturing 97 3

mm

 

 

Percent

 

ms Medical Expenditure Panel Survey

m Agency for Healthcare Research and Quality

J

............................................................................................................

Percent

8'3 79.2 77.6 78.5

 

 

Did the number of workers eligib

Although the percent of
employees working in establishments
offering health insurance rose, the
portion of workers who actually were
eligible for coverage fell. In 1996,
81.3% of employees were eligible for
insurance. This fell to 78.5% in

1999.

Percent of eligible employees in establishments

that offer health insurance

86.7

    

82.2

 

 

 

 

 

 

79.9 81-4

 

 

All establishments 50% or more Less than 50%

Percent of low-wage employees in establishment

Medical Expenditure Panel Survey

I I996
(:1 I997
D I998
- I999

1e for

In establishments where 50% of
more of the employees were low
wage, the proportion of eligible
employees dropped to 48.1% in
1999, down from 60.3% in
1996.

The percent of employees eligible
for health insurance also declined
in establishments with less than
50% low—wage workers.
However, in 1999, the figure still
stood at 81.4%.

What

t of workers in establishments

that o ered health insurance were enrolled?

Within establishments offering 0

health insurance, the percent of
employees enrolled slipped from
69.5% in 1996 to 64.6% in 1999.
During the same period, however,
there were increases in the portion of
establishments offering insurance and
in the portion of employees working

in those establishments.

Percent

90
80
70
60
50
4O
30
20

Percent of enrolled employees
in establishments that offer health insurance

85.5 34.2 85.3

82.3
%
73,8
689 65.9 66.5
45.0
33.7
29.9 29.8
I996 I997 i998 i999

The proportion of full—time
workers enrolled was down from
77.9% to 73.9% over the period.
The proportion of part—time
employees with coverage dropped
by more than one—third (from

21.5% in 1996 to 13.6% in 1999).

Workers in establishments Where
50% or more of the employees

were low wage posted a dramatic
decline in the percent
enrolled—from 45.0% in 1996 to
29.8% in 1999.

The percent actually enrolled of
those who were eligible for
coverage also fell—from 85.5% in
1996 to 82.3% in 1999.

Percent of enrolled employees in establishments

 

80 i 77.9
70 —
60 —
u so -
C
0
E 40 ‘
O.
30 F
I Eligible employees. all establishments
I Total employees.esrablishments with 20 —
less than 50% low-wage employees
Total employees, all establishments l0 _
I Total employees. establishments with 50%
or more low-wage employees

76. I

that offer health insurance

 

 

 

 

 

 

 

 

 

73.7 73.9
- I996
3 I997
1:) I998
- I999
|3.6
Full-time Part-time

Agency for Heaithcare Research and Quality

 

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Characteristics
of Offers

There is substantial variety in
the health insurance arrangements
that employers make available to
their workers. An employer might
offer only one type of plan or more
than one type. Additionally, an
employer can choose to pay the fiill
premium or require its employees to
contribute to the plan cost. The
options offered by employers are
important when examining the
coverage that workers ultimately
obtain.

Agency for Healthcare Research and Quality

 

“'6 Medical Expenditure Panel Survey

How common was it for employers to
offer a choice of health insurance plans.>

Slightly less than 30% of
establishments offering health
insurance gave their employees two
or more health insurance options in
1999. This rate was up substantially
from 1996, when only 21.5% (not
shown) offered multiple plans.
Breakdowns by establishment
characteristics matched the overall

more than one plan may be offering
different types of insurance to
separate groups of workers rather
than giving a choice of plans to
workers within a group. For instance,
if salaried employees and hourly
workers are offered different health
insurance coverage, it counts as two

    
 

trends.
Percent of establishments that offer two or
more health insurance choices, I999
70 a 68-0
60 W
53.2
48.8
50 —
y 4l-4 - Has union employees
5 4o — 35.8 |:] No union employees
2 - 2 or more locations
8 30 v l | location only
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24'97 National average 29.7% g 2:123:22: Ing an ores ry
20 ”-4 - Retail trade
l4.| l3.6 I Transportation.communication,
and utilities
l0 - Finance, insurance. and
real estate

 

 

Union presence

Multi/single status

Selected industry group

Note that establishments having plans even though no individual
employee has a choice of plans.

In 1999, establishments that
were part of firms with more
than one location; those with a
union presence; and those in the
industry groups transportation,
communication, and utilities and
finance, insurance, and real estate
were much more likely than
average to offer more than one
plan.

The percent of employees
working in establishments
offering multiple plans also
jumped—from 43.5% in 1996 to
56.2% in 1999 (not shown).

flips Medical Expenditure Panel Survey

Agency for Healthcare Research and Quality

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171m Agency for Healthcare Research and Quality

A

What type of health insurance plan was
most frequently selected?

For both single and family
coverage, an employee was much
more likely to be enrolled in a
mixed—provider plan than in either of
the other types. This held true over
the three years from 1997 to 1999.
(Data for 1996 were not available.)
The different type of health plans are
described in the definitions at the
beginning of this report.

In 1999, enrollment in mixed—
provider plans stood at 59.4% for
single coverage and 60.8% for family
coverage.

0 Not only was mixed-provider the
most common plan type, but the
percent of total enrollees in those
plans rose from 1997 to 1999.
For single coverage, enrollment
in mixed-provider plans stood at
59.4% in 1999, up from 53.6% in
1997. Similarly, mixed—provider

Medical Expenditure Panel Survey

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

plans accounted for 60.8% of
family coverage in 1999, up from
54.5% in 1997.

Exclusive-provider plans—with
enrollment at 30.3% of all single
coverage and 28.3% of all family

coverage in 1999—Were the
second most popular option each
year. The percent covered under
these plans went down slightly
over the 3 years.

Employee health insurance enrollment

Single coverage

I997

I 999

 

Family coverage

Type of plan:
- Exclusive provider
[3 Mixed provider
- Any provider

Whattype

of health insurance plan was

most frequently selected? (continued)

Any—provider enrollment as a
portion of the total was on the
decline for both single and family
coverage groups during the
period.

The share of employees enrolled
in different types of plans was
consistent with the relative rates
at which establishments offered
them. In 1999, for example,
64.1% of establishments offered a
mixed-provider option, 37.7%
had an exclusive-provider option,
and 18.7% had an any-provider
option. (The sum of these
percents is greater than 100
because some employers offer
more than one type of plan.)

Percent

70

 

Employer health insurance offerings, I999

Exclusive provider

64.l

Mixed provider

Type of plan

 

Any provider

Agency for Healthcare Research and Quality

 

MP8 Medical Expenditure Panel Survey

Agency for Healthcare Research and Quality

ii

Medical Expenditure Panel Survey

How often did establishments offer health
insurance coverage that did not ° an

Percent

.................................................................................................................

60

50

4O

30

20

In 1999, 48.5% of private-sector

establishments offered their
employees at least one health
insurance plan that provided single
coverage without an employee
contribution to the premium cost.
This percentage was down from

1996. Only 29.0% of establishments

offered health insurance coverage for

families without any employee

employee con

 

 

Percent of establishments offering health

insurance requiring no employee contribution

 

 

 

 

 

 

 

 

Single coverage

Family coverage

29.0

 

- I996
I997
E] I998
fl I999

ution?

contribution in 1999. This figure
also dropped from the 1996 rate.

Among establishments offering
single coverage that did not
require an employee
contribution, only any-provider
plans (data not shown) were
offered less frequently in 1999
(8.6%) than in 1996 (15.3%).

The same pattern by plan type
held true for family—coverage
plans.

How often did establishments offer health

insurance COV

employee contribution? (continued)

0 Actual enrollment in single-
coverage plans not requiring an
employee contribution—as a
percent of all those with single
coverage—declined over the 4-
year period, going from 37.1% to
33.5%.

Percent

that did not require an

There was no significant
difference between 1996 and
1999 in the portion of enrollees
with family coverage who were
in plans not requiring a
contribution from the worker.

Agency for Healthcare Research and Quality

'7

Percent of enrolled employees with health insurance
requiring no employee contribution

40‘ 37.1 37.6

 

35.0

 

- I996
:1 I997
\:| I998
[:1 I999

'93 I8.5 l8.7

 

 

 

 

 

   

 

 

 

 

 

 

 

 

Single coverage Family coverage

 

ms Medical Expenditure Panel Survey

Agency for Healthcare Research and Quality

How does enrollment in single-coverage plans

compare to enrollment m family coverage?

Not only were employees less
likely to be enrolled in health

insurance plans in 1999 than 1996,

but there also was a shift in
enrollment from family coverage to
less expensive single coverage.

Percent of enrolled employees with single or family coverage

 

IOO _
90 W
80 m
70 _
60 i
50
4O
3O
20

Percent

 

Medical Expenditure Panel Survey

56. |

I996

5L9

 

I997

5 I .7 l 5 LB

Cl Family coverage
- Single coverage

I998 I999

Private—sector employees in
single-coverage health insurance
plans rose from 43.9% of the
total enrolled in 1996 to 48.2%
in 1999. Most of this change
occurred from 1996 to 1997,
when single enrollment rose to
48.1%.

Conversely, workers enrolled in
family coverage declined from
56.1% of the total to 51.8%.

These changes were across the
board, encompassing all industry
groups, employee types, and
other attributes.

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V Premiums and
Employee
Contributions

The cost of health insurance—
both to the employers offering
coverage and to their employees
who may pay part of that expense—
plays a critical role in determining
who ultimately is covered. The key
cost factor is whether coverage is for
the employee only or also
encompasses members of the
employee’s family. Health insurance
premiums also vary appreciably
based on the characteristics of the
employer and of the health plan
itself. Amounts that workers have to
contribute in order to receive
coverage also vary widely. During
the 1996—99 time period covered by
this report, both premiums and
employee contributions were on the
rise throughout the United States,
but they were not increasing at the
same rate for everyone.

Agency for Healthcare Research and Quality

MEPS Medical Expenditure Panel Survey

[3% Agency for Healthcare Research and Quality

N
0

$2.500

$2.400

$2.300

$2.200

Dollars

$2, I 00

$2,000

5 I .900

Medical Expenditure Panel Survey

How fast have health insurance premiums
_ for single coverage been rising?

Total health insurance premiums
are the fees paid for coverage of
medical benefits over a defined
benefit period. Either the employer
or the employee can pay the
premium for job—related coverage in
its entirety, or the cost can be shared

by both.

Average annual premium for single-coverage
health insurance

$2.475

  
  

Firm size:

I Less than 50 employees

$2,030 I All private-sector employees
I 50 or more employees

$ | .965
I 996 I997 I998 | 999

Average annual health insurance
premiums per enrollee for single
coverage rose 16.7% during the
period. The average annual
premium increased from $1,992
in 1996 to $2,325 in 1999, with
the largest percent increase
(6.9%) occurring in the most
recent year.

Average premiums were higher
for establishments in small firms
(less than 50 employees) than for
establishments in firms with 50
or more employees. This
difference was observed in each
year of the 1996-99 period but
was most pronounced in 1999.

Whattypes of establishments had the
highest single premiums?

While health insurance
premiums increased across the board
during the period 1996-99, certain
types of employers consistently
reported higher premiums than
others. Even among establishments
with similar characteristics, premiums
can vary for a number of reasons,
including the generosity of the health
plan benefits, the physical location of
the establishment, and the age and
health status of the workforce. For
example, insurance premiums vary
significantly across States.1

0 Establishments where there was a
union presence had higher
premiums per enrollee than
nonunion establishments. In
1999, the average annual

1Information on State differences is given in
MEPS Chartboak N0. 7 (Branscome IM, Brown
E. State differences in job-related health
insurance, 1998. Rockville (MD):Agency for
Healthcare Research and Quality; 2001. AHRQ

Pub. No. 01—0036).

Dollars

premium for employers with a
union presence was $2,468,
while the comparable premium

for nonunion establishments was
$2,296.

Premiums have been above the
national average during this 4—
year period for health insurance
plans offered by the following

industry groups: mining; finance,

insurance, and real estate;
transportation, communication,
and utilities.

0 Premiums have been below

average in these industry groups:

retail trade; agriculture, fishing,
and forestry; manufacturing.

Average annual premium for single-coverage
health insurance, I999

$2,550 *
$2,500 * $2,468
$2.450 *
$2,400 —
$2,350 *
$2,300
$2,250
$2,200
$2,I50
$2,I00

  
 

National average $2,325
$2,296

 

I Has union employees

[3 No union employees

' Mining

fl Finance, insurance.and real estate

:1 Transportation, communication.
and utilities

I Retail trade

- Agriculture.fishing, and forestry

- Manufacturing

$2.485

  
    
  

$2,233
$2,2l6
$2.2m

 

$2,050

Union presence

Selected industry group

Agency for Healthcare Research and Quality

—4

ms Medical Expenditure Panel Survey

1

Did'

One of the most important
factors determining the health
insurance premium is the type of
providers covered by the plan.
Premiums increased from 1996 to
1999 regardless of the type of
provider arrangement offered by the
plans, but they increased at different
rates.

film Agency for Healthcare Research and Quality

N I
N

epremiumsrise

fast for

types of health insurance plans?

0 Plans that allow enrollees to go

to any provider had the largest
increase in single premiums
during this period (25.9%) and
had the highest annual single
premium of the three groups
($2,581 in 1999).

Average annual premium for single-coverage
health insurance

Dollars
m
Ix)
N
o
0

$2, | 00 $2,050
$2 000 $2’0'9

' s I .992
5 ' ,900 s l .9 | 2
s | ,800 I 996

Medical Expenditure Panel Survey

   

$2,58l

Type of plan:
I Any provider
I Mixed provider
I All plans
Exclusive rovider
p

I997 | 998 I999

Plans that require enrollees to use
an exclusive set of in-plan
providers had the smallest overall
increase (13.6%) and had the
lowest annual single premium of
the three groups ($2,171 in
1999).

Plans that provide a list of
preferred providers but allow
enrollees to go to providers
outside the plan (at a higher cost)
had premium increases for single
coverage that were in between
those for exclusive-provider plans
and any-provider plans. Over the
4-year period, single premiums
for mixed—provider plans
increased 16.9%. The annual
single premium for these plans in
1999 was $2,359.

Have the enrollee contributions for single
coverage changed?

While some job—based health
insurance premiums are paid entirely
by the employer, the most common
arrangement is for the premium cost
to be shared by the employer and
enrolled employees. As premiums
increase, one way that employers can
reduce their rising burden is by
asking the employees to pick up a
larger amount of the premium.

0 Employers, in general,
maintained a relatively constant
level of cost sharing with their
employees who were enrolled in
single—coverage plans over this 4-
year period. While the average
annual dollar amount paid by
employees rose from $342 to
$420, as a percentage of the
total premium, the increase was

less than 1 percentage point
(from 17.2% to 18.1%).

Percent

Employee contributions jumped
from 17.4 to 19.1% ofthe
premium for exclusive—provider
plans, the only plan type that
experienced a significant increase
over this time period.

Agency for Healthcare Research and Quality

23

Enrollee contribution as a percent of single-coverage

health insurance premium

25*

l7.4 ”-5

 

   

All plans Exclusive provider Mixed provider

Type of plan

 

- I996
[:1 I997
[3 I998
I999

Any provider

MP5 Medical Expenditure Panel Survey

if}. Agency for Healthcare Research and Quality

N
A

In what types of establishments did employees

contribute the most for single coverage?

Employee contribution rates can
vary because of a number of different
employer or employee characteristics.

Establishments with a union
presence required a smaller

contribution from plan enrollees.

In 1999, establishments with a
union presence required an

average employee contribution of

Enrollee contribution to single-coverage
health insurance premium, I999

700 f

600 w

500 —

$435

400 _

Dollars

$3|9
300 —

200 —

 

National average $420

I Has union employees
:1 No union employees
$589 I Retail trade
Manufacturing
E Transportation, communication,
and utilities
Agriculture, fishing. and forestry

   
  

 

IOO

Union presence

Medical Expenditure Panel Survey

Selected industry group

$319 (12.9% ofthe total
premium), while nonunion
establishments required an

average contribution of $435
(18.9% of the total premium).

The retail trade industry group
required a larger dollar enrollee
contribution than the all-industry
average.

Lower than average dollar
contributions from their
employees were the norm in the
following industries:

0 Manufacturing.

0 Transportation,
communication, and utilities.

0 Agriculture, fishing, and
forestry.

How fast have health insurance premiums

for family coverage risen.>

Average premiums for family

coverage in health insurance plans
increased considerably during the
period 1996-99, and they increased
regardless of the type of provider
arrangement covered by the plans.

The average annual family
premium increased from $4,954
in 1996 to $6,058 in 1999. This
22.3% increase was higher than
the increase for single premiums
(16.7%) over the same time
period.

Plans that allow enrollees to go
to any provider had the largest
family premium increases during
this period (31.3%) and had the
highest average annual family

premiums of the three groups
($6,466 in 1999).

Plans that require enrollees to use
an exclusive set of in-plan
providers had the smallest overall

increase (18.1%) and had the
lowest average annual family

premiums of the three groups
($5,749 in 1999).

Plans that provide a list of
preferred providers but allow
enrollees to go to providers

outside the
plan (at a
higher cost)
had premium
increases for
family coverage
that were
greater than
those of the
exclusive-

Dollars

$6,600
$6,400
$6,200
$6.000
$5,800
$5,600
$5.400
$5.200
$5.000
$4.800

provider plans but less than those
of the any—provider plans. Over
the 4-year period, family

Agency for Healthcare Research and Quality

premiums for these mixed-

provider plans increased 22.4%.
The average annual family
premium for these plans in 1999
was $6,128.

25;

Average annual premium for family-coverage
health insurance

/ 996 I997

   

 

 

$5,007 is mixed provider
$4,954 is all plans

$4,924 is any provider
$4,868 is exclusive provider

 

 

Type of plan:
Mixed provider
I All plans

I Any provider

I Exclusive provider

I 998 I 999

 

”3 Medical Expenditure Panel Survey

Agency for Healthcare Research and Quality

26

Medical Expenditure Panel Survey

Dollars

$6,600
$6,400
$6.200
$6.000
$5,800
$5,600
$5,400

$5,200

 

What types of establishments had the

Family premium costs varied
greatly depending on industry

group.

0 Family premiums were above the
all-industry average for health
insurance plans offered by the

following industry groups:

Average annual premium for family-coverage

$6,382

health insurance, I999

$6,299

 

 

 

National average $6.058

$5,772

 

$5,7l I

 

 

 

 

Selected industry group

 

$56 | 4

- Finance. insurance, and
real estate

[3 Mining

D Retail trade

Agriculture,fishing. and
forestry

! Construction

  

0 Finance, insurance, and real
estate.

0 Mining.
Premiums have been below
average in these industries:

0 Retail trade.

0 Agriculture, fishing, and
forestry.

0 Construction.

Unlike single premiums, family
premiums did not vary
significantly by size of firm or
presence of a union.

Have employee contributions for family
coverage risen at the same rate as the premiumsP

The average amount paid by

enrollees for family coverage
increased significantly, from $1,276
(not shown) to $1,438 over this
4-year period. But the percentage of
the total premium paid by the
employees actually decreased by 2
percentage points, from 25.7% to
23.7%.

Only exclusive-provider plans
failed to show a significant
decrease in the employee
contribution percentage over this
4—year period.

The dollar amount of the
employee contribution (not
shown) for family coverage did
not rise significantly over the 4—
year period for any—provider plans
but did rise for both exclusive—
and mixed-provider plans.

Since family-coverage premiums
are much higher than single-
coverage premiums, most
employers require that employees
contribute more toward family
coverage, both in terms of the
dollar amount and as a
percentage of the total premium.

For example, in 1999, the
average employee contribution
for family coverage was $1,438
(23.7% of the premium)
compared with $420 (18.1% of

the premium) for single coverage.

Enrollee contribution as a percent of family-coverage
health insurance premium

30 #
26.2

   

.426.| 25.4
$13"

Percent

 

 

 

All plans Exclusive provider Mixed provider

Type of plan

  
  
  

24.8 25.|
. 23.

 

I I996
[:1 I997
El I998
I999

Any provider

Agency for Healthcare Research and Quality

27

“’5 Medical Expenditure Panel Survey

[71% Agency for Healthcare Research and Quality

In what types of establishments did employees

contribute the most for family coverage?

Employee contribution rates vary
because of a number of different
employer or employee characteristics.

0 For each year of the survey,

5

establishments with a union
presence required a lower
contribution for family coverage

from plan enrollees. In 1999,
establishments with unions

.................................................................................................

required an average employee
contribution of $922 (15.0% of
the premium), while nonunion
establishments required an
average contribution of $1,604
(26.6% of the premium).

0 Enrollee dollar contributions for
family coverage have been above
the all-indusz average for health

Enrollee contribution to family-coverage health

2000 —
|800 —
$|.604
I600 —
I400 _

l200 *

Dollars

l000 * $922
800 —

600 —

 

 

insurance premium, I999

National average $ l ,438

- Has union employees
[:1 No union employees

   
    
     

I Retail trade
$' 753 Finance. insurance.and real estate
' SL667 C] Services
_ , 5"630 - Agriculture,fishing, and
V forestry

- Manufacturing

- Transportation, communication
and utilities

- Mining

$l.0|4
$9|6

 

400

Union presence

Medical Expenditure Panel Survey

Selected industry group

insurance plans Offered by the
following industry groups:

0 Retail trade.

Finance, insurance, and real
estate.

0 Services.

Lower than average dollar

contributions from employees

were required in the following

industries:

0 Agriculture, fishing, and
forestry.

0 Manufacturing.

0 Transportation,
communication, and utilities.

0 Mining.

 

'3
a
G

u:
a

'90
=

o—

.3
Q
G

—

Future MEPS

Data on Job-
Related
Health

Insurance

'U.S. Government Priming Office: 2002 — 491-196/66003

Annual MEPS data on job-
related health insurance for the years
1996 through 2000 are currently
available on the MEPS Web site.

The Insurance Component of
MEPS is conducted annually. As
additional years of data become
available, changes in plan offerings,
enrollments, and costs of employer-
sponsored health insurance can be
studied in greater detail.

Agency for Healthcare Research and Quality

29

 

MEPS Medical Expenditure Panel Survey

U.S. Department of Health and Human Services
Public Health Service

Agency for Healthcare Research and Quality

2101 East Jefferson Street, Suite 501

Rockville, MD 20852

 

Official Business _
Penalty for Private Use $300

ail/Ea

www.ahrq.gov
AHRQ Publication No. 02—0030
July 2002

ISBN 1-58763-119-9
ISSN 1531 ~5649

 

 

PRSRT STD
POSTAGE 8: FEES PAID
PHS/AHRQ
Permit No. 6-282

 

 

 

 

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