Stephen H. Long

Worker demand for health insurance in the non-group market.

This paper examines decisions to purchase individual insurance by workers who do not have employment-based insurance. Using data from the Current Population Survey and the Survey of Income and Program Participation, coupled with prices for a standard insurance product in different market areas, we estimate a price elasticity of -0.3 to -0.4 and an income elasticity of 0.15. Our estimate of the price response raises doubts that even substantial subsidies to the working uninsured would induce many of them to purchase coverage voluntarily.

Acute health care costs for the aged Medicare population: overview and policy options.

Despite its seeming largesse, Medicare has always been a cost-sharing program. The potential costs borne by beneficiaries can be substantial, leading to more than 70 percent seeking protection through supplementary private insurance. Others risk payment out of pocket, and fewer rely on Medicaid. Actual costs incurred by each group of Medicare beneficiaries are examined and seen to have significant and inequitable impacts. Current Medicare policies are often poorly designed or irrelevant. Future responses will have to address both taxation and copayment while weighing concerns for individual financial hardship against possible overuse of services.

Do people shift their use of health services over time to take advantage of insurance

This paper provides a test of the hypothesis that people shift their consumption of health services to time periods when they have more generous insurance coverage, in order to take advantage of third-party payment. We use data from the Survey of Income and Program Participation to compare utilization rates for people in transition between being insured and being uninsured to those of people who are continuously insured and continuously uninsured. We find little support for the hypothesis that people anticipate changes in their insurance status and arrange their health care consumption accordingly.

Pooled purchasing : who are the players?

Data from the 1997 Robert Wood Johnson Foundation Employer Health Insurance Survey provide the first national estimates of the prevalence of pooled purchasing under all major arrangements. About one-quarter of all businesses participate in a pool; smaller businesses are more likely to participate, and there is substantial geographic variation in the prevalence of pool participation. Pooling appears to have modest positive effects on the availability of employee choice among plans (especially health maintenance organizations) and on the availability of information about plan quality. On the other hand, pooling as now construed does not seem to have enhanced the accessibility or affordability of insurance to employers.

URBAN-RURAL DIFFERENCES IN EMPLOYER-BASED HEALTH INSURANCE COVERAGE OF WORKERS

Prior research indicates that rural workers are less likely than urban workers to obtain health insurance coverage through their employer. The reasons for this differential in coverage rates are not well understood. This study uses data from the 1993 Robert Wood Johnson Foundation Employer Health Insurance Survey to measure differences in the proportion of rural and urban workers who are offered insurance coverage and in their rates of participation in offered plans, and to assess the effects of firm size, wages, and other factors in explaining the residential differences. Both offer rates and participation rates are lower in rural areas, but the probability of employer-based coverage among rural workers rises to the level of that of urban workers when we adjust rural firm size and wages to urban levels. Rural firms and workers are not behaviorally different from urban firms and workers; they are, however, at a greater disadvantage because of their smaller size and lower wages.

Public insurance expansions and crowd out of private coverage.

Background. The extent to which persons enrolling in new public insurance programs substitute the public coverage for private insurance is of concern to policy makers. Objective. To look at the extent of the substitution resulting from new state programs that cover a broad base of the low-income population and to look at the responses of both families and employers. Methods. The March CPS for 1991–1993 and 1997–1998 were used to study the responses of families. Two large national surveys of employers with information about the employment-based system in 1993 and 1997 were used to study employer responses. The analysis looks at changes in coverage and employer offer rates before and after the public insurance expansions in selected states and compares these changes to those in a control group in states without expansions. Results. Coverage by private insurance for low-income persons in states with expansions fell by more than expected based on the control states, indicating some substitution of public coverage for private insurance. Changes in employee coverage in own-employer sponsored insurance accord with this result. The expansion of public insurance has a bigger effect on employer offer decisions when a large share of its workers is eligible for public programs. Conclusions. The results show a significant substitution of public insurance for private coverage in the expansions studied. However, endogeneity of state expansion policies and possible confounding with other policy changes temper the conclusions. More recent public insurance expansions as part of the State Childrens’ Health Insurance Program have adopted a range of methods to limit crowd out. Future research is needed to evaluate whether these procedures and rules have succeeded.

Participation in a Public Insurance Program: Subsidies, Crowd-Out, and Adverse Selection

This paper examines how varying the level of subsidies affects participation in a public insurance program, crowd-out of private insurance, and adverse selection. We study the experience in Washingtons Basic Health program in 1997. Findings show that adverse selection is not a problem in voluntary public programs. Increasing subsidies have only modest effects on participation in subsidized programs, though the gains are not at the expense of the private market. Overall participation in the subsidized plan is also modest, even though participants benefit from it. The challenge to policymakers is to find program design characteristics, beyond subsidies, that attract the uninsured.

Medicare's disproportionate share adjustment and the cost of low-income patients

We investigated whether or not hospitals have higher costs for inpatient care provided low-income Medicare patients, after controlling for other cost differences already accounted for by Medicare payments. We estimated differences in Prospective Payment System-adjusted costs and outlier-adjusted length of stay for low-income patients relative to matching non-low-income cases from the same hospital in 85 high-volume diagnosis-related groups (N = 1,247,670). Low-income Medicare patients do not have costlier hospital stays, although their stays are 2.5% longer. We conclude that disproportionate share payments are not justified on grounds of higher treatment costs.

Employer-sponsored insurance: how much financial protection does it provide?

The authors examine the generosity of private employer health insurance coverage using data from two large national surveys of employers. Generosity is measured as the expected out-of-pocket share of medical expenditures for a standard population, given the provisions of the coverage. On average, those covered by employer-sponsored insurance can expect to pay 25 percent of expenditures out of pocket. There is little variability across plans in this share, though plans offered by smaller employers are somewhat less generous than those offered by larger employers. Individuals who incur high costs pay a smaller share of the bill than do those with lower levels of spending. The generosity of employer-sponsored plans increased slightly in the 1990s.

Medicaid eligibility expansion in Florida: effects on maternity care financing and the delivery system.

CONTEXT In July 1989, the income limit on Medicaid eligibility for pregnant women in Florida was increased from 100% to 150% of the poverty level. This change may have led to substantial shifts in the financing of pregnancy-related care, and also may have had distinct effects on different providers in the health care delivery system. METHODS Matched birth and death certificates, hospital discharge abstracts, Medicaid eligibility records and encounter records from county public health departments were used to estimate changes in the flows of funds and services by major payer groups during the period preceding the expansion (July 1988-June 1989) and for calendar year 1991. A total of 188,793 births in the first period and 193,292 in the second were examined. RESULTS The number of births financed annually by Medicaid in Florida increased by 47% following the eligibility expansion, from 47,400 in 1988-1989 to 69,600 in 1991. This increase stemmed largely from covered births to women who otherwise would have been uninsured. Seventy-three percent of the additional 22,200 deliveries funded through Medicaid in 1991 are attributed to women who were eligible as a result of the expansions. The additional prenatal care financed by Medicaid was delivered almost entirely by county public health departments, which increased their capacity by more than 100%, from 177,000 visits in 1988-1989 to 433,000 in 1991. Medicaid payments for maternity care increased 39%, from