Why is there state variation in employer-sponsored insurance?

Health Affairs

Volumn 22, Issue 1, 2003, Pages 241-251

  Shen, Yu Chu ^a   Zuckerman, Stephen ^a  

^a URBAN INSTITUTE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ADULT; ARTICLE; DECISION MAKING; DEMOGRAPHY; EMPLOYMENT; ETHNIC GROUP; FAMILY SIZE; HEALTH INSURANCE; HUMAN; INFORMATION PROCESSING; INSURANCE; MEDICAID; ORGANIZATION AND MANAGEMENT; SOCIOECONOMICS; STATISTICAL MODEL; STATISTICS; UNITED STATES; UTILIZATION REVIEW;

ADULT; DATA COLLECTION; DECISION MAKING; DEMOGRAPHY; ELIGIBILITY DETERMINATION; EMPLOYMENT; ETHNIC GROUPS; FAMILY CHARACTERISTICS; HEALTH BENEFIT PLANS, EMPLOYEE; HUMANS; INSURANCE COVERAGE; INSURANCE SELECTION BIAS; LIKELIHOOD FUNCTIONS; MEDICAID; SOCIOECONOMIC FACTORS; UNITED STATES;

EID: 0037264657     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.22.1.241     Document Type: Review

References (31)

1. Agency for Healthcare Research and Quality, State Differences in Job-Related Health Insurance, 1993, Medical Expenditure Panel Survey Chartbook no. 7 (Rockville, Md.: AHRQ, 1998);
2. J.M. Branscome et al., "Private Employer-Sponsored Health Insurance: New Estimates by State," Health Affairs (Jan/Feb 2000): 139-147;
3. and S. Zuckerman et al., "Shifting Health Insurance Coverage, 1997-1999," Health Affairs (Jan/Feb 2001): 169-177.
4. The national average is 71.9 percent. The employer coverage rates for each NSAF state are as follows: Wisconsin, 80.8 percent; Michigan, 79.6 percent; Minnesota, 79.2 percent; New Jersey, 78.2 percent; Massachusetts, 78.1 percent; Alabama, 72.9 percent; Colorado, 72.8 percent; Washington, 71.8 percent; New York, 70.5 percent; Florida, 68.1 percent; Mississippi, 66.5 percent; Texas, 64.6 percent; and California, 64.5 percent.
5. B.C. Spillman, "Adults without Health Insurance: Do State Policies Matter?" Health Affairs (July/Aug 2000): 178-187.
6. See, for example, S.H. Long and M.S. Marquis, "Gaps in Employer Coverage: Lack of Supply or Lack Of Demand?" Health Affairs (Supplement 1993): 282-293;
7. J.C. Cantor, S.H. Long, and M.S. Marquis, "Private Employment-Based Health Insurance in Ten States," Health Affairs (Summer 1995): 199-211;
8. and H.S. Farber and H. Levy, "Recent Trends in Employer-Sponsored Health Insurance Coverage: Are Bad Jobs Getting Worse?" Journal of Health Economics 19, no. 1 (2000): 93-119.
9. See G. Kenney, F. Scheuren, and K. Wang, 1997 NSAF Survey Methods and Data Reliability, NSAF Methodology Reports no. 1, July 1999, www.urban.org/UploadedPDF/Methodology_1.pdf (24 October 2002).
10. The data sources include the Area Resource File (county characteristics, physician supply), the American Hospital Association annual survey (hospital bed supply aggregated to the county level), Bureau of Labor Statistics (state-level unionization rate), Centers for Medicare and Medicaid Services (indexes for living and health costs), Current Population Survey (to construct measures of state Medicaid generosity), and managed care penetration data from Douglas Wholey.
11. Using past-year insurance information (that is, whether a person is covered by an employer plan at any time during the past twelve months) gives the same results.
12. To check the validity of our linear model, we reestimated the model using a probit equation. The marginal effects and statistical significance from the probit estimation were extremely close to the coefficients from the linear model (regression results of both models are available upon request; contact Stephen Zuckerman by e-mail, szuckerm@ui.urban.org).
13. F.A. Sloan and C.J. Conover, "Effects of State Reforms on Health Insurance Coverage of Adults," Inquiry (Fall 1998): 280-293;
14. P.J. Cunningham and P.B. Ginsburg, "What Accounts for Differences in Uninsurance Rates across Communities?" Inquiry (Spring 2001): 6-21;
15. and P.J. Cunningham, "Declining Employer-Sponsored Coverage: The Role of Public Programs and Implications for Access to Care," Medical Care Research and Review (March 2002): 79-98.
16. D. Chollet, "Employer-Based Health Insurance in a Changing Work Force," Health Affairs (Spring I 1994): 315-326;
17. and J. Gruber, "Health Insurance and the Labor Market," in Handbook of Health Economics, ed. J.P. Newhouse and A.J. Culyer (Amsterdam Elsevier, 2000), 646-706.
18. See reviews of the relationship between the labor market and health insurance in Gruber, "Health Insurance and the Labor Market."
19. This state-level unionization indicator and the industry and government worker indicators all act as proxies for a missing individual-level unionization variable. We recognize that this approach might not be ideal, but it is the best that we can do with the available data.
20. This is an appropriate measure despite the fact that it only reflects medical spending for the elderly, because the AAPCC rate represents inpatient and outpatient costs as well as price and volume differences.
21. D.M. Cutler and J. Gruber, "Does Public Insurance Crowd Out Private Insurance?" Quarterly Journal of Economics (May 1996): 391-429;
22. K. Swartz, "Medicaid Crowd Out and the Inverse Truman Bind," Inquiry (Spring 1996): 5-8;
23. and L. Dubay and G. Kenney, "Did Medicaid Expansions for Pregnant Women Crowd Out Private Coverage?" Health Affairs (Jan/Feb 1997): 185-193.
24. We obtain the percentage of adults eligible by applying each state's Medicaid eligibility rules in 1997 and 1999 to the adult sample from that year's CPS. Using a national sample of adults instead of the state population allows us to isolate the effects of state Medicaid policies on the rate of employer coverage from the effect of demographics and income.
25. This approach is similar to a regression-based decomposition of differences in uninsurance rates used by Cunningham and Ginsburg, "What Accounts for Differences in Uninsurance Rates?"
26. The exhibit also shows those factors that were included in the model but did not have a significant effect on employer coverage. The full set of regression coefficients along with standard errors are available from the authors upon request.
27. The relationship between levels of Medicaid eligibility and employer coverage appeared to be U-shaped. People in states with limited or broad eligibility rules (that is, the first and the fifth quintiles) have lower probability of having employer coverage than do people residing in states that belong to the third and fourth quintiles. We experimented with other specifications and found that they did not affect our decomposition results.
28. The full results related to this detailed decomposition are available from the authors upon request.
29. Michigan's rate of unionization (21.8 percent) is almost 50 percent above the national average rate (14.9 percent).
30. L. Ku and S. Matani, "Left Out: Immigrants' Access to Health Care and Insurance," Health Affairs (Jan/Feb 2001): 247-256.
31. Zuckerman et al., "Shifting Health Insurance Coverage, 1997-1999."