Workers who decline employment-related health insurance

Families of workers who decline coverage represent a substantial share of the uninsured and publicly-insured population in the United States.

We examined health status, access to health care, utilization, and expenditures among families that declined health insurance coverage offered by employers using data from the Medical Expenditure Panel Survey for 2001 and 2002.

We found differences in insurance status for adults and children among families with offers. We found that among low-income families with offers, children are less likely to have private insurance compared with adults. However, the majority of children who decline private insurance end up with public coverage, whereas most of adults who decline offers remain uninsured. Decliners are more likely to report poor health, yet they are also less likely to have high cost medical conditions. Families declining coverage have weaker preferences for insurance than families that take up. Although access to care is lower among the decliners who remain uninsured, decliners with public insurance have similar access to care as those with private insurance. Families turning down coverage are more likely to face high expenditure burdens as a percentage of income and more likely to have financial barriers to care. Families who decline coverage rely heavily on the safety net. Public sources and uncompensated care account for 72% of total expenditures among adults who decline coverage.

Our results suggest that policy initiatives aimed at increasing take up among workers need to take into account the incentives workers face given the availability of care through public sources and uncompensated care.