Employer-based health insurance in a changing work force

Area of Science:

• Health Economics
• Labor Market Analysis
• Social Policy

Background:

• Declining manufacturing employment and rising service/part-time jobs correlate with reduced employer-sponsored health insurance.
• Manufacturing sector historically provides more comprehensive health coverage for its employees compared to other industries.
• Inter-industry and inter-firm disparities in health insurance provision create financial burdens and subsidies.

Purpose of the Study:

• To analyze the impact of industry shifts on employer-sponsored health insurance coverage rates.
• To quantify the net 'export' or 'import' of health insurance coverage between different industry groups.
• To examine the financial implications for firms of varying sizes regarding health insurance provision.

Main Methods:

• Analysis of employment trends across manufacturing, service, and other industry sectors.
• Calculation of net health insurance coverage transfers between industry groups based on 1991 data.
• Assessment of the financial burden (tax) or subsidy received by firms based on coverage export/import.

Main Results:

• Manufacturing's decline negatively impacts its workers' health insurance rates and acts as a net 'exporter' of coverage.
• Professional services, a growing sector, collected a subsidy exceeding 12% per covered worker.
• Larger firms (100+ employees) paid up to a 13% tax per covered worker to subsidize smaller firms.

Conclusions:

• Shifting employment from manufacturing to services exacerbates health insurance disparities.
• The current system imposes a significant financial burden on manufacturing and large firms to subsidize others.
• Policy interventions may be needed to address inequities in employer-sponsored health insurance distribution.