Generosity and adjusted premiums in job-based insurance: Hawaii is up, Wyoming is down

Health Affairs

Volumn 25, Issue 3, 2006, Pages 832-843

  Gabel, Jon ^a   McDevitt, Roland ^b   Gandolfo, Laura ^b   Pickreign, Jeremy ^c   Hawkins, Samantha ^d   Fahlman, Cheryl ^c  

^a CENTER FOR STUDYING HEALTH SYSTEM CHANGE   (United States)

^b Watson Wyatt Worldwide   (United States)

^c HSC ^*

^d Health Research and Educational Trust   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ADULT; ARTICLE; CLASSIFICATION; COMMERCIAL PHENOMENA; COMPUTER SIMULATION; COST; ECONOMICS; EPIDEMIOLOGY; FEE; GOVERNMENT; HEALTH CARE COST; HEALTH CARE SURVEY; HEALTH INSURANCE; HUMAN; INSURANCE; MIDDLE AGED; REGRESSION ANALYSIS; RISK ASSESSMENT; STATISTICAL ANALYSIS; STATISTICS; UNITED STATES;

ACTUARIAL ANALYSIS; ADULT; COMMERCE; COMPUTER SIMULATION; COST SHARING; EMPLOYER HEALTH COSTS; FEES AND CHARGES; GOVERNMENT AGENCIES; HEALTH BENEFIT PLANS, EMPLOYEE; HEALTH CARE SURVEYS; HUMANS; INSURANCE COVERAGE; MANAGED CARE PROGRAMS; MIDDLE AGED; PREFERRED PROVIDER ORGANIZATIONS; REGRESSION ANALYSIS; RISK ADJUSTMENT; UNITED STATES;

EID: 33744719710     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.25.3.832     Document Type: Article

References (19)

1. Watson Wyatt Worldwide, "Consumer Awareness of Health Savings Accounts." Research Brief, 11 October 2005, http://www.watsonwyatt.com/ research/deliverpdf.asp?catalog=ONL016&x=.pdf (accessed 27 January 2006).
2. See J.M. Branscome et al., "Private Employer-Sponsored Health Insurance: New Estimates by State," Health Affairs 19, no. 1 (2000): 139-147.
3. Agency for Healthcare Research and Quality, "Medical Expenditure Panel Survey (MEPS) 2002 Employer-Sponsored Health Insurance Data," July 2004, http://www.meps.ahrq.gov/MEPSDATA/ic/2002/ Index202.htm (accessed 27 January 2006).
4. Readers should not confuse actuarial value with loss ratio, defined as the percentage of the premium that is paid out in claims benefits for the covered population.
5. For a more detailed description of the study methods, see R. McDevitt and L.Gandolfo, "Methodology for Estimating the Extent of Financial Protection Afforded by Employer-Sponsored Private Health Insurance Plan," Technical Pub. no. 63, March 2006, http://www.hschange.org/CONTENT/828.pdf (accessed 7 April 2006).
6. MEPS-IC rotates the smallest twenty-one states in the sample from year to year that will have sufficient sample size to display state-based statistics. In 2002, seven states and the District of Columbia did not have sufficiently large samples. For a more complete description of MEPS-IC, see National Center for Health Statistics, "NEHIS Tables Replicating Medical Expenditure Panel Survey-Insurance Component (MEPS-IC): 1996-1999," 15 February 2005, http://www.cdc.gov/nchs/about/major/nehis/meps_ic.htm (accessed 27 January 2006).
7. For a more complete description of MEPS HC, see AHRQ, "Survey Instruments and Associated Documentation," 18 January 2006, http://www.meps.ahrq.gov/survey.htm (accessed 27 January 2006).
8. For a more complete description of the KFF/HRET annual survey, see Henry J. Kaiser Family Foundation, Employer Health Benefits: 2004 Annual Survey, 9 September 2004, http://www.kff.org/insurance/7148/index.cfm (accessed 27 January 2006). For example, in the MEPS-IC data, the only information on prescription drug benefits is whether the plan covers such benefits, whereas the KFF/HRET survey provides information on the cost sharing, formulary, and copayments or coinsurance required for generic, preferred brand-name, and nonpreferred brand-name drugs.
9. The ten categories are hospital care, physician and clinical services, dental services, other professional services, home health care, prescription drugs, other nondurable medical products, durable medical equipment, nursing home care, and other personal health care. Dental services, nursing home care, and administrative costs are outside the scope of our study and are excluded from calibration benchmarks.
10. Percentage of claims that are out of network: 3 percent for HMOs, 10 percent for POS plans, 13 percent for PPOs, and 92 percent for indemnity plans.
11. According to MEPS 1996, the sickest 5 percent of the employed population incur an estimated 53 percent of spending, whereas the lowest 85 percent of users incur only 22 percent of claims expenses.
12. The assumption is that type of plan does not jointly determine the actuarial value of a plan, unlike, for example, the size of the deductible.
13. One other possible explanation is more favorable selection in HMOs. This paper provides no evidence to support or refute this argument.
14. M.S. Marquis and S.H. Long, "Trends in Managed Care and Managed Competition: 1993-1997," Health Affairs 18, no. 6 (1999): 75-88.
15. Data for 2002 are from the KFF/HRET employer survey, 2002.
16. J. Gabel et al., "Health Benefits in 2004: Four Consecutive Years of Double-Digit Premium Increases Take Their Toll on Coverage," Health Affairs 23, no. 5 (2004): 200-209.
17. Figures for 1997 are from J.R. Gabel, S.H. Long, and M.S. Marquis, "Employer-Sponsored Insurance: How Much Financial Protection Does It Provide," Medical Care Research and Review 59, no. 4 (2002): 440-454.
18. B.C. Strunk, P.B. Ginsburg, and J.R. Gabel, "Tracking Health Care Costs: Growth Accelerates Again in 2001," Health Affairs 21 (2002): w299-w310 (published online 25 September 2002; 10.1377/hlthaff.w2.299).
19. A third possible explanation is that the growth of state-mandated benefits increased the richness of benefit packages for small employers, thereby narrowing the gap between small and large employers.