The New Dominance of Managed Care: Insurance Trends in the 1990s

Health Affairs

Volumn 16, Issue 1, 1997, Pages 125-136

  Jensen, Gail A ^a   Morrisey, Michael A ^b   Gaffney, Shannon ^c   Liston, Derek K ^c  

^a WAYNE STATE UNIVERSITY   (United States)

^b UNIVERSITY OF ALABAMA AT BIRMINGHAM   (United States)

^c KPMG LLP   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COST; ECONOMIC ASPECT; EPIDEMIOLOGY; FEE; HEALTH INSURANCE; INFORMATION PROCESSING; STATISTICS; UNITED STATES; UTILIZATION REVIEW;

DATA COLLECTION; DEDUCTIBLES AND COINSURANCE; FEES AND CHARGES; HEALTH BENEFIT PLANS, EMPLOYEE; HEALTH CARE SURVEYS; INFLATION, ECONOMIC; MANAGED CARE PROGRAMS; UNITED STATES;

EID: 0342920048     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.16.1.125     Document Type: Article

References (30)

1. J. Gabel et al., "The Health Insurance Picture in 1993: Some Rare Good News," Health Affairs (Spring 1 1994): 327-336; M.A. Morrisey, G.A. Jensen, and RJ. Morlock, "Small Employers and the Health Insurance Market," Health Affairs (Winter 1994): 149-161; and M.A. Morrisey, G.A. Jensen, and S. Henderlite, "Employer-Sponsored Health Insurance for Retired Americans," Health Affairs (Spring 1990): 57-73.
2. J. Gabel et al., "The Health Insurance Picture in 1993: Some Rare Good News," Health Affairs (Spring 1 1994): 327-336; M.A. Morrisey, G.A. Jensen, and RJ. Morlock, "Small Employers and the Health Insurance Market," Health Affairs (Winter 1994): 149-161; and M.A. Morrisey, G.A. Jensen, and S. Henderlite, "Employer-Sponsored Health Insurance for Retired Americans," Health Affairs (Spring 1990): 57-73.
3. J. Gabel et al., "The Health Insurance Picture in 1993: Some Rare Good News," Health Affairs (Spring 1 1994): 327-336; M.A. Morrisey, G.A. Jensen, and RJ. Morlock, "Small Employers and the Health Insurance Market," Health Affairs (Winter 1994): 149-161; and M.A. Morrisey, G.A. Jensen, and S. Henderlite, "Employer-Sponsored Health Insurance for Retired Americans," Health Affairs (Spring 1990): 57-73.
4. The survey defined each type of plan for the respondent as follows: Conventional health insurance (also called indemnity insurance or a fee-for-service plan): Under conventional insurance, employees can go to any physician or hospital they choose. The employee typically faces a deductible and coinsurance above the deductible. Health maintenance organization, or HMO: With an HMO, employees must receive their care from an HMO physician; otherwise the expense is not covered. When they use HMO physicians, however, expenses typically are covered in full with a flat-dollar copayment for the office visit. Preferred provider organization, or PPO: PPO plans typically are those in which employees have lower deductibles and coinsurance if they use selected doctors or hospitals within a network. Point-of-service plan (also called an HMO/PPO hybrid, open-ended HMO, or POS plan): This type of plan resembles an HMO for in-network services (that is, with copayments), while it reimburses employees for services they receive outside the network on a fee-for-service basis, often after a deductible and coinsurance.
5. Another sixteen firms with insurance lacked information on the number of workers they employ. They are included in our analysis, but not in the detailed breakdowns by size of firm.
6. See Gabel et al., "The Health Insurance Picture."
7. See Morrisey et al., "Small Employers and the Health Insurance Market."
8. See M. Morrisey and G. Jensen, "Switching to Managed Care in the Small Employer Market" (Working paper. Lister Hill Center for Health Policy, University of Alabama at Birmingham, October 1996).
9. See C. Sullivan et al., "Employer-Sponsored Health Insurance in 1991," Health Affairs (Winter 1992): 172-185.
10. These premium increases are for family coverage. For each plan type, the respondent was asked to report "how its total costs for family coverage compare with what they were one year ago."
11. See Morrisey et al., "Small Employers and the Health Insurance Market," for a comparison of small-and large-firm coverage, holding constant the level of premiums.
12. See R. Feldman et al., "Demand for Employment-Based Health Insurance Plans," Journal of Human Resources (Spring 1989): 115-142; B. Dowd and R. Feldman, "Premium Elasticities of Health Plan Choice," Inquiry (Winter 1994/1995): 438-444; and T. Buchmueller and P. Feldstein, "Consumers' Sensitivity to Health Plan Premiums: Evidence from a Natural Experiment in California," Health Affairs (Spring 1996): 143-151.
13. See R. Feldman et al., "Demand for Employment-Based Health Insurance Plans," Journal of Human Resources (Spring 1989): 115-142; B. Dowd and R. Feldman, "Premium Elasticities of Health Plan Choice," Inquiry (Winter 1994/1995): 438-444; and T. Buchmueller and P. Feldstein, "Consumers' Sensitivity to Health Plan Premiums: Evidence from a Natural Experiment in California," Health Affairs (Spring 1996): 143-151.
14. See R. Feldman et al., "Demand for Employment-Based Health Insurance Plans," Journal of Human Resources (Spring 1989): 115-142; B. Dowd and R. Feldman, "Premium Elasticities of Health Plan Choice," Inquiry (Winter 1994/1995): 438-444; and T. Buchmueller and P. Feldstein, "Consumers' Sensitivity to Health Plan Premiums: Evidence from a Natural Experiment in California," Health Affairs (Spring 1996): 143-151.
15. Unfortunately, our survey did not ask these firms specifically how their contribution varies for workers at a given salary, for example, whether they follow a level-dollar rule, a level-percent rule, and so on.
16. In that year they contributed 20 percent toward the cost of single coverage and 30 percent toward the cost of family coverage. See Gabel et al., "The Health Insurance Picture "
17. A similar pattern regarding small-firm health insurance is evident in other data, as well. See Morrisey et al., "Small Employers and the Health Insurance Market;" and J. Cantor et al., "Private Employment-Based Health Insurance in Ten States," Health Affairs (Summer 1995): 199-211.
18. A similar pattern regarding small-firm health insurance is evident in other data, as well. See Morrisey et al., "Small Employers and the Health Insurance Market;" and J. Cantor et al., "Private Employment-Based Health Insurance in Ten States," Health Affairs (Summer 1995): 199-211.
19. It should be noted, however, that many HMOs also sponsor poinr-of-service plans. For example, InterStudy reports that among all persons insured through HMOs as of January 1995 (close to the time of our survey), 9 percent were insured through HMO-sponsored point-of-service plans (as opposed to pure HMO plans). Their data do not include enrollees in non-HMO-sponsored point-of-service plans. See InterStudy, The InterStudy Competitive Edge (5.2), Part II: HMO Industry Report (Excelsior, Minn.: InterStudy, September 1995).
20. See M. Morrisey and G. Jensen, "State Small Group Insurance Reform," in Health Policy, Federalism, and the American States, ed. R. Rich and W. White (Washington: Urban Institute Press, 1996).
21. In Gabel et al., "The Health Insurance Picture," two of the 1993 statistics on lifetime maximum benefits were mislabeled. It was reported in the article that the percentages of subscribers with a limit of $250,000 to $1 million were 283 in conventional plans and 18.9 in PPOs, and that the percentages with a limit of more than $1 million were 37.9 and 50.3, respectively. The correct labels for these statistics are actually "$250,000 to $999,999" and "$1 million or more."
22. See J. Gabel et al., "Tracing the Cycle of Health Insurance,® Health Affairs (Winter 1991): 48-61; and J. Gabel and G. Jensen, ®Can a Universal Coverage System Temper the Underwriting Cycle?® Inquiry (Summer 1992): 249-262.
23. See J. Gabel et al., "Tracing the Cycle of Health Insurance,® Health Affairs (Winter 1991): 48-61; and J. Gabel and G. Jensen, ®Can a Universal Coverage System Temper the Underwriting Cycle?® Inquiry (Summer 1992): 249-262.
24. Health Insurance Association of America, Operating Results from the Leading Writers of Group and Individual Health Insurance, Policy Development and Research Report (Washington: HIAA, June 1996).
25. Ibid.
26. D. Wholey, R. Feldman, and J.B. Christianson, ®The Effect of Market Structure on HMO Premiums,® Journal of Health Economics (May 1995); 81-106.
27. Morrisey and Jensen, ®State Small Group Insurance Reform,® in Health Policy, Federalism, and the American States.
28. See Feldman et al., ®Demand for Employment-Based Health Insurance Plans;® Dowd and Feldman, ®Premium Elasticities of Health Plan Choice;® and Buchmueller and Feldstein, ®Consumers' Sensitivity to Health Plan Premiums.®
29. See Feldman et al., ®Demand for Employment-Based Health Insurance Plans;® Dowd and Feldman, ®Premium Elasticities of Health Plan Choice;® and Buchmueller and Feldstein, ®Consumers' Sensitivity to Health Plan Premiums.®
30. See Feldman et al., ®Demand for Employment-Based Health Insurance Plans;® Dowd and Feldman, ®Premium Elasticities of Health Plan Choice;® and Buchmueller and Feldstein, ®Consumers' Sensitivity to Health Plan Premiums.®