Why did employee health insurance contributions rise?

Gruber, Jonathan; McKnight, Robin

doi:10.1016/j.jhealeco.2003.06.001

Cited by 63 publications

(51 citation statements)

References 15 publications

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“…Overall, our findings suggest that the federal government spent between $31,000 and $83,000 per person who was newly insured by the introduction of this subsidy policy. This is much higher than simulations of the costs per newly insured from most other policies that are currently contemplated for insurance expansion (Gruber, 2002).…”

Section: Part Vi: Conclusionmentioning

confidence: 82%

“…The rise in employee premium shares for private health insurance closely mirrors the major trend in health insurance markets of the past two decades: the decline in employerprovided health insurance coverage. The share of workers covered by employer-provided insurance fell from 80% in 1982 to 72% in 1998 (Gruber and McKnight, 2002). The time series pattern of decline in insurance parallels the rise in employee premium contributions, with the largest reduction in insurance occurring in the 1988-1993 period when employee premiums were rising most rapidly.…”

Section: Employee Contributions For Health Insurancementioning

confidence: 98%

“…By requiring contributions, the firm can provide insurance only to those who demand it, and can pass the savings back to employees in the form of higher wages. Levy (1997), Dranove, Spier and Baker (2000) and Gruber and McKnight (2002) provide tests of some of the predictions of these models. The evidence generally supports the important role of the imperfect worker sorting model: firms where workers have lower demand for insurance, or better outside options for insurance coverage, have higher premium payments.…”

Section: Employee Contributions For Health Insurancementioning

confidence: 99%

“…In this paper we study such an exogenous price change, through tax subsidization of the 2 employee share of premiums for federal workers in the Federal Employee Health Benefit Program (FEHBP). Roughly one-half of all employees in the U.S. pay their insurance premiums on a pre-tax basis (Gruber and McKnight, 2002). But, until 1994, employee premium payments were made on a post-tax basis by virtually all federal employees insured through the Federal Employee's Health Benefit Program (FEHBP).…”

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confidence: 99%

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Subsidies to Employee Health Insurance Premiums and the Health Insurance Market

Gruber¹,

Washington²

2003

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One approach to covering the uninsured that is frequently advocated by policy makers is subsidizing the employee portion of employer-provided health insurance premiums. But, since the vast majority of those offered employer-provided health insurance already take it up, such an approach is only appealing if there is a very high takeup elasticity among those who are offered and uninsured.Moreover, if plan choice decisions are price elastic, then such subsidies can at the same time increase health care costs by inducing selection of more expensive plans. We study an excellent example of such subsidies: the introduction of pre-tax premiums for postal employees in 1994, and then for the remaining federal employees in 2000. We do so using a census of personnel records for all federal employees from 1991 through 2002. We find that there is a very small elasticity of insurance takeup with respect to its after-tax price, and a modest elasticity of plan choice. Our results suggest that the federal government did little to improve insurance coverage, but much to increase health care expenditures, through this policy change.

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Section: Part Vi: Conclusionmentioning

confidence: 82%

Section: Employee Contributions For Health Insurancementioning

confidence: 98%

Section: Employee Contributions For Health Insurancementioning

confidence: 99%

mentioning

confidence: 99%

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Subsidies to Employee Health Insurance Premiums and the Health Insurance Market

Gruber¹,

Washington²

2003

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“…Employers differ from consumers in that they can pass on price increases to their customers, increase employee contributions to their health insurance premium (Gruber and McKnight, 2003), or eliminate health insurance benefits altogether. The federal government provides employers with incentives to provide health insurance to their employees by not considering the premiums paid by employers on behalf of their employees as taxable income to employees.…”

Section: Stakeholder‐level Health Care Affordabilitymentioning

confidence: 99%

Perspectives Articles:Exploring Stakeholder Perspectives on What Is Affordable Health Care

Rosenberg¹,

Johnson

Duncan

2010

Risk Manage Insurance Review

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Health care expenditures have accounted for increasing proportions of the U.S. gross domestic product, and the rate of growth of health care expenditures has increased over the past two decades. These two measures of assessing whether the level of health care expenditures is affordable may be appropriate in the aggregate for the United States but are not appropriate to assess whether individual stakeholder groups can afford their particular level of spending on health care. Health care is an economic good that differs from other economic goods, as it involves life and death issues, and invokes a call for a moral authority. This article explores definitions of what is affordable health care from the perspective of different stakeholders and suggests that other measures are needed to assess whether or not health care is affordable for stakeholders as one definition is not appropriate for all stakeholders.

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Employee choice of flexible spending account participation and health plan

Hamilton

Marton

2007

Health Economics

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Despite the fact that flexible spending accounts (FSAs) are becoming an increasingly popular employer-provided health benefit, there has been very little empirical study of FSA use among employees at the individual level. This study contributes to the literature on FSAs using a unique data set that provides three years of employee-level-matched benefits data. Motivated by the theoretical model of FSA choice presented in Cardon and Showalter (J. Health Econ. 2001; 20(6):935-954), we examine the determinants of FSA participation and contribution levels using cross-sectional and random-effect two-part models. FSA participation and health plan choice are also modeled jointly in each year using conditional logit models. We find that, even after controlling for a number of other demographic characteristics, non-whites are less likely to participate in the FSA program, have lower contributions conditional on participation, and have a lower probability of switching to new lower cost share, higher premium plans when they were introduced. We also find evidence that choosing health plans with more expected out-of-pocket expenses is correlated with participation in the FSA program.

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Why did employee health insurance contributions rise?

Cited by 63 publications

References 15 publications

Subsidies to Employee Health Insurance Premiums and the Health Insurance Market

Subsidies to Employee Health Insurance Premiums and the Health Insurance Market

Perspectives Articles:Exploring Stakeholder Perspectives on What Is Affordable Health Care

Employee choice of flexible spending account participation and health plan

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