The study, published in the October issue of Health Services Research, says efforts to help small firms pay for insurance won’t be effective until the workers themselves demand the coverage.
The federal government has proposed and many states have enacted reforms to help small businesses pay for health insurance for their employees. But results of the study show that even a hefty cut in premiums would result in a minimal increase in employers of low-wage workers buying insurance because the workers themselves would not want to pay their share.
"Policies directed to increasing the supply of insurance … are unlikely to have the intended effect unless coupled with policies to enhance worker demand for coverage," says authors Susan Marquis and Stephen Long of RAND, a nonprofit research organization in Arlington, Va.
The wage level of its employees strongly influences whether a company offers health insurance. In fact, the workers’ income is more of a factor than the price the firm might pay for premiums. The less the workers earn, the less likely their employer is to offer insurance, according to the study.
The RAND study indicates that a company with the bulk of its workers earning more than $10 an hour is twice as likely to offer insurance than one whose employees earn less than $7 an hour.
Marquis and Long analyzed data gathered from more than 16,000 companies. They focused on firms with fewer than 100 employees. Most large companies offer insurance, and many of the government insurance reforms are targeted at small firms.
Data for the study came from the Robert Wood Johnson Employer Health Insurance Survey, which was conducted in 10 states in 1993 and 1994.
Health Services Research is the bimonthly peer-reviewed journal of the Academy for Health Services Research and Health Policy and is owned by Health Research and Educational Trust. For information about the journal, contact Alice Schaller at 510-643-5439 or email alices@uclink4.berkeley.edu .
Posted by the Center for the Advancement of Health http://www.eurekalert.org/restricted/reporters/journals/cfah/ . For information about the Center, call Ira Allen, iallen@cfah.org 202-387-2829.
Health Services Research