th Employer at care willM be andates available to them in the case of a catastrophic event Thus, society may bear at least a part of the risk I am pleased to appear before you today to discuss Statement current treSummary nds in health insurance coverage. My name is Dallas Tabl Chart e 16 Chart 3 Chart1 Chart2 that the individual chose not to insure against. Salisbury. I am the president of the Employee Benefit Research Institute (EBRD, a nonprofit, nonpartisan, public policy DallasL Salibury Nonelderly Per(;entage Population Uninaured withSelect among _ the Sour Nonalderly cee ofHealth Population, Insuranc by e by , Family Family Type Income, , NonaldarlyPopulation Poreentago without Uninsur I-leal(h _l among Work_l Nonelderly AO_118-P 64 opulation , by Indu without gtry Croup HealthInauran;e,byWork Proposals to requh-e all employers to provide health benefits to theh"workers have been offered in Congress for over research organization based in Washington, DC. EBRI has long been committed to the accurate statistical analysis of EmployeeBenefitResearchInstituteAnalysisofthe March1992CPS Employee Benefit Employee Research Benefit InstituteResearch Analysis of Institute the March 1992 CPS Insurance,byOwnWorkStatus, Statusof FamilyHead,EmployeeBenefit T-88Research An e Percentage mployer mandate is essen Employee tially Benefit a payroll Research tax, altho Inst ugh itute the Analysis burden of ofth the at tax March is n1992 ot disCPS tributed equally across all three decades. Renewed attention has focused on an employer mandate coupled with tax changes and insurance public policy benefits issues. Through our research, we strive to contribute to the formulation of effective and respon- EmployeeBenefitResearch InstituteAnalysisof theMarch1992CPS Percentage employees, employers, or consumers. Some of the costs of mandated health benefits would be passed on to employees reforms. Employer mandates vary according to theEmployer employe Coverage rs that are required to participate, classesNo of Health employees sible health, welfare, and retirement policies. In keeping with EBRI's mission of providing objective and impartial InstituteAnalysisof theMarch1992CPS Family Total Other Total Insurance in coth vere e40 fd orm ., ano df lo len wgt erhw of ages, timelo al wer lowe level d tosco ompl f other y with noncas proh visi be onefits, ns. or unemployment. Low-income workers would have analysis, our work does not contain recommendations. [Nonworker1. _ Income Total Private Total Direct Indirect Private Public Medicaid Coverage less opportunity 35. to trade wages for health benefits and would be more likely to experience the effects of an employer • Health insurance is a top priority for Americans. A recent EBRI/Gallup poll found that 68 per- 30. mandate 20- in the form of unemployment. Some of the costs might be passed on to consumers in the form of higher prices. EBRI simulated the effects of an illustrative employer mandate, assuming that employers would be required to offer (millions) cent of Americans regard health insurance as their most important employee benefit. Fifty-six 25- Th hea e lr th emainder benefits o to f ta hll e costs employees of a mandate who wor w ke ould d mor beebthan orne 1 by 9 h th oe urs investors or 25 ho and urs o aw week. ners of the firms subject to the man- Total 218.1 157.7 139.8 70.3 69.6 18.0 31.7 23.9 36.3 percent said they would not accept a job that did not provide health benefits. Respondents said date.Th 20.e distribution of this burden would vary by industry, region, firm size, and ownership type. The ultimate • Introduction incidence of this tax will be determined by the market for health insurance. that 15. their employer would have to pay them an average of 84,570 in additional income to forgo There are three critical assumptions that analysts have to make to estimate the impact of imposing a mandate: 1) how I'UII Yoar ' " o Under$5,000 12.9 2.1 0.8 0.4 0.4 1.2 6.7 6.4 4.4 10. do wa their ges current and otheremployer-provided benefits adjust when health health insurance benefits. is required to be an element in total compensation; 2) how $5,000-$9,999 15.9 3.3 2.0 1.3 0.7 1.3 8.1 7.4 5.1 10"15" ::::::::::::::::::::::: The number of Americans without health insurance and with reduced access to health insurance represents a ..... ..... ........ o 5.$10,000-$14,999 16.1 6.7 5.2 3.2 2.0 1.4 4.6 3.9 5.6 sensitive to changes in the costs of labor is employer demand forworkers; and 3) how much would a mandated health • Conclusions longstanding public policy issue. Many policymakers have sought to expand access by reforming the health care Total Married win Married without Single Single $15,000-$19,999 15.7 9.1 7.6 4.4 3.2 1.4 2.7 2.1 4.7 0 plan cost_EBRI assumed that wages and other benefits did not adjust in estimating the number of individu- Children Children with Children without Children delivery system. This testimony provides information about public attitudes on health care, the current sources of $20,000-$29,999 32.6 23.8 21.0 11.4 9.6 2.9 3.5 2.3 6.6 • Several 1992 EBRI/GalIup surveys explored public attitudes toward policy options for health Statement als who would lose their jobs as a consequence of a mandate that employers provide health benefits to their $30,000-$39,999 Total Agriculture 30.6 Const 25.9 ruction 23.6 Retail 11.4 Self-Employed 12.2 2.3 Services1.8 Other 0.8 Gove 3.8 rnment health insurance in the United States, and the characteristics of the insured and uninsured to help in evaluating and The majority of Americans consider health care to be a right. Although most prefer care with no cost, they are willing to employees. care reform. These surveys indicate a preference for employment-based insurance versus $40,000-$49,999 26.4 23.5 21.7 10.0 11.6 1.9 1.4 0.4 2.4 esha stimatin re some g cocos ststsofex health plicitly care and reform more proposal costs onsa . hidden basis. Americans want "reform% but only reform that means $50,000 or More 67.9 63.4 57.9 28.2 29.7 5.5 2.9 0.6 3.8 government provision. Forty-eight percent of respondents felt that employers should be most Note: Otherindustries include mining, transportalion, communications, utilities, financeinsurance, , realestate, manufacturing, and more attentive providers, more accessibility, no risk of forfeiture, and lower costs. Other wholesale Dem 35.3 trade. ographic Million Unln Characteristics =ured under Age 55 36.3 Million Uninsured under Age 65 Requiring all employers to provide healBefore th benefits thetoSubcommittee workers and theiron depe Health ndents would decrease the number of responsible for providing health benefits to full-time employees and their dependents rather In addition, EBRI has estimated the impact of various reform proposals and examined how they would affect the (percentagewithinceverage categories) uninsured from 36 million to 10 million, according to EBRI estimates. Because many of the uninsured work for small covera This testimony ge, costs, p an rod viqu des ality info ormation f health care on the .Committee Th charac is test timony eristics on examines oWays f Americans and the im with Means pact an od f limitin withoug t th he ealth taxinsurance exclusion f that or em- should than the federal government (31 percen0 or individuals themselves (14 percen0. firms, exempting employers with fewer than 25 employees would only reduce the number of uninsured to about Sex andA Toge tal--Men were mo 100.0° re likely /o 100 to.0 be % uninsured 100.0°1o th 100.0° an women 1o 100.0° in all 1oage 100 groups .001o 100.0° except 1o be100 tween .0°1o ages 1005 .0° 5-- 1o 64.Women pbe loyer useful cont in rib analyzing utions tohealth health care insurance reformfrom proposals workers' as the taxanew ble income adminis .tIt ration also eprepares xamines its theagenda potentifor al im health pact o care f U.S. House of Representatives were 25 million. genera Th lly isless analysis likelyassu than mes men tha to t b th eer covered e are no directly changes byin an employment employer he aa slth a result insuran ofce a m pl aan nda bte, ut were even th mor ough e likely health to em reform. ployerMore mandates detailed on tdata he num can b be erfound of unins inur EBRI's ed and January on emp1993 loyment Issue . Brief, "Sources of Health Insurance and Charac- Under$5,000 5.9 1.3 0.6 0.5 0.6 6.9 21.3 27.0 12.0 • Access to Health Insurance • More than 180 million persons under age 65--representing 83 percent of that populationmwere r benefits eceive employer representcov a significant erage as dependents componentoof f other total c wo ompe rker ns s ati and on publicly (10.9 percent financed of p health ayrollcovera among ge. employers who offer migratory and/or be paid low hourly wages. Construction industry workers may be employed on a contractual basis for teristics of the Uninsured," which we have provided to the Subcommittee. $5,000-$9,999 7.3 2.1 1.4 1.8 1.0 7.3 25.5 31.1 14.0 health benefits7). Clearly, if a mandate were implemented without a transition period, that would allow other elements a particular project. Because workers in these industries may not work consistently for the same employer, they are less covered $10,00000514,999 by either private 7.4 or publicly 4.2 3.8 financed 4.5 health 2.9 insurance 8.0 in 1991. 14.4 Although 16.2 some 15.4 of the • Public Attitudes on Health Care of total compensation (such as wages) to adjust, the cost of laborwould increase substantially, possibly causing some Mo Individu re than $15,000-$ al 18 saged 0 mil 1lion 9,999 45--per 64were sons7.2 less under likely age 5.7 to 65be --re unins pr 5.5 eseur ntin edHearing g(1 6.3 2 83 pe pe rcent), rce on 4.6 nt and of tha in tdividu 7.9 popula al tion-- s 8 a.g 4ed we21- re 28.6 c 4overed were m 12.8 by oreither e likely to be likely to have employer-sponsored health insurance. Workers in the retail sales and service industries, which employ EBRI's estimates of tax changes and employer mandates attempt to draw out some of the tradeoffs implicit in health nonelderly had public health insurance (15 percen0, the most common source of coverage was job loss. $20,000--$29,999 15.0 15.1 15.0 16.2 13.8 16.1 11.2 9.5 18.2 private uninso ur red pub (30 licly pefinanc rcent)ethan d heal th th ose insur in all ance othin er 1 age 991.1 grAl oups thou in gh1991 some (cho ar f the t 7).nonelde The high rly propo had pru tion blic o hfealt youn h g inadults surance wi(th 15 out many part-time workers and experience rapid turnover, are often subject to waiting periods before becoming eligible for care reform. As this testimony illustrates, there are limits in determining the effects of these proposals. Important private $30,000-$39,999 insurance--usually 14.0 purchased 16.4 16.9through 16.3 an employment-based t7.5 12.6 5.8plan. However 3.2 10.5 , 16.6 per- The public will be the arbiter of whether or not health reform initiatives are focused properly. To assess the shifting benefits. health insurance may be because they are no longer covered by a family policy and have not established themselves as percent), the most common soHealth urce of coverage Care Reform: was private Current insurance---u Trends sually inpHealth urchasedCare through an employment- details of many of the proposals have not been developed. Moreover, the literature on important questions such as the $40,000-$49,999 12.1 14.9 15.5 14.3 16.7 10.5 4.3 1.9 6.6 tidescent of pub of licthe opinnonelderly ion, EBRI and population--or The Gallup Organiza 36.3 tion, million Inc. hpeople--received ave conducted a montneither hly seriesprivate of national health public EBRI simulated changes in employment that would occur as a result of mandating that all employers offer health bape sed rm pl an an. ent Hmembers owever, 16 o.f6th pe ercent worko ff orce. the nonelde In addition, rly popula many ti in on th --or is gr36.3 oup million may think peop tha le---receiv t they do ed not neit nee her d h perivate alth in hsu ealt r- h $50,000 or More 31.1 40.2 41.4 40.1 42.7 30.7 9.1 2.6 10.5 effects of tax changes and increased labor costs is often incomplete or contradictory. The greater the amount of change Costs and Health Insurance Coverage opinion polls on public attitudes toward economic security issues such as health insurance, health care satisfaction, and benefits (wages and other elements of total compensation were held constant). The sensitivity of employer demand for ins an ur ce ance insurance becno ause r pu th bey nor licly arpublicly e finan young cedand hfeal inanced heal th covera thy.health Fg in ea . lly,coverage. young workers may be ineligible foran employer-sponsored plan Firm Size--Nearly one-half of all uninsured workers were either self-employed or working in firms with fewer than 25 proposed by a reform proposal the greater the uncertainty of estimates regarding costs and coverage. the value of benefits since June 1989. As elected officials well know, the tide of opinion can shift rapidly and a move workers to changes in the price of labor is crucial in this simulation. The EBRI analysis used a range of estimates of this because of waiting periods imposed prior to eligib (percent ility. agewithinincomecategories) employees in 1991 (chart 4). Twenty-two percent of self-employed persons were uninsured, compared with 17 percent of from "what do you want?" to "what are you willing to pay?" caby n produce very differentresults. Some sensiti uninsured vity based individual on economic s havelitlimited erature. acces 8 It sshould to babe sic noted healthth care at oth ser ervice valsue ps ars tly uppo becau rted seby thth eye lack econo private mic lith eealt ratuh re all workers. Thirty-two percent of workers in firms with fewer than 10 employees were uninsured, compared with only 9 • Endnotes Total 100.0% 72.3% 64.1% 32.2% 31.9% 8.2% 14.5% 11.0% 16.6% • Among the 36.3 million nonelderly Americans who did not have health insurance coverage in could be cited that would increase or decrease the estimated employment effects by large amounts. The other crucial insurance and are ineligible for (or do not otherwise receive) publicly financed health care. Uninsured individuals may percent of workers in firms with 1,000 or more employees. Small employers often are unable to obtain reasonably priced • Health Care Reform Proposals 1991, most were working adults (56.4 percen0, while the remainder were children (26.3 per- Our surveys indicate that obtaining health insurance is a top priority for most Americans. A 1992 EBRI/Gallup poll beafss orc ump ed ti to on seek usedmin edical this s care imula for tion preventa was thb eleco ailment sts of th sethmanda at could ted have healb th een benefit treated s. Wi less thout exps ensively pecifying ifth the eyac htual ad compo- health insurance Under $5,000 for their empl 100o .0 yees beca 15.9use insurers 6.3Dallas generally 3.0 L. Salisbury charge 3.3 them9.6 higher 52.3 premiums 49.9 due to the 33.9 greater risk 1These data are taken primarily from an EBRI Special Report/Issue Brief,, "Sources of Health Insurance and Characteris- fonen undt that servic $5,000-$9,999 68 espercent that would of Americans be 100.0 covered, regard 20.8 separate health EBRI 12.5 insurance simula 7.9ti as on their s we 4.6 rmost e cond import u8.3 cted ant usemployee ing 51.0differen benefit 47.0 t estima , compared t32 es.2of thewith average receiv cen0 ed acces and s to nonworking preventive heal adults th services (17..3 Th percen0. e cost ofPresident in The efficient, totaluncom number pensated of uninsured care is borne under by allage paye65 rs in the posed by a small group. In 1991, although only 27 percent of the nonelderly population lived in families whose head of Congressional proposals for health care reform occupy almost every point along the spectrum from essentially fine tics of the $10,000-$ Uninsured," 14,999 Januar 100.0 y 199341.4 . 32.6 19.9 12.8 8.9 28.5 24.2 34.7 61 percent in 1990;56 percent said they would not accept a job that did not provide health benefits. Respondents said annual cost of health benefits per individualemployee: $970, $1,450, and $2,430. The cost of each additional dependent healthincreased care delivery from system 33.6 . Th million e Americ inan 1988 Hospit toa36.3 l Associa million tion es in timat 1991. ed that hospitals provide $10 billion in uncom- household was self-employed or worked for a firm with fewer than 25 employees, this group accounted for 45 percent of tuning the health care delivery system by changing tax or regulatory policy to abandoning the private market and Employee Benefit Research Institute $15,000-$19,999 100.0 57.7 48.6 28.1 20.5 9.1 17.0 13.1 29.6 2American Hospital Association. Statement of the American Hospital Association Before the Committee on Ways and that their employer would have to pay them an average of $4,570 in additional income to forgo their current employer- was assumed to be 60 percent of the individual cost. Again, these estimates assume that wages and other benefits do not pe the nsa un ted insured. care annually.2Another study estimated that uninsured patients accounted for 11 percent of personal health $20,000-$29,999 100.0 73.0 64.3 34.8 29.5 8.8 10.9 6.9 20.2 adopting a national health care delivery system. Recent policy attention has focused on proposals to limit the exclusion Means of the U.S. Congress, House of Representatives, on National Health Care Reform. October 10, 1991: Summary. provided health benefits. This compares with $4,219 in 1990. Individuals prefer the hidden costs of lower wages over change as health benefits are added. Clearly, if wages adjust, fewer individualswould become unemployed as a result of care expenditures in 1988 ($32 billion), even though they had 37 percent fewer physician contacts and 69 percent fewer $30,000-$39,999 100.0 84.6 77.2 37.3 39.9 7.4 6.0 2.5 12.5 of employer contributions to health insurance and to mandate the provision of employer-sponsored coverage. EBRI has •aWashington, manda In 1991 te. , 85 DC: percent American of Hospital the uninsured Association, were 1991. working or living in a family headed by workers, direct payments $40,000-$49,999 like premium 100.0 co-payments. 89.2 82.1 38.1 44.0 7.2 5.2 1.7 9.0 Income inpatient days.3The money spent annually on inappropriate care for uninsured patients may be more effectively spent estimated the impact of such proposals.6 3 Lewin/$ I50 CF. ,000 Tor heMo Heal re th C1 ar 00.0 e Financing 93.3 System 85.a 2nd the4U 1.5 ninsured 43 . .Prepared 8 8.1 for U.S.4. Depa 2 ria,ent 0.9 of Health 5.6 and Human primarily because most people live in families Washington, headedD.C. by workers. The majority of uninsured by expanding access to basic health care services. Services, Health Care Financing Administration. Washington, DC: Lewin/ICF, 1990. Not only do Americans value the provision of insurance, the majority are satisfied with the health care they receive. EBRI'ssimulations estimated that between 200,000 and 1.2 million workers could become unemployed as a direct result The uninsured are concentrated disproportionately in low-income families. In 1991, 54 percent of the uninsured were in Taxw -Based orkersReform reported their industry of primary employment was retail trade, services, or manufac- Note: Detailsmaynot add tototalsbecauseindividualsmayreceivecoveragefrom morethanone source. 4The March CPS questions individuals about their health insurance coverage throughout the preceding calendar year. However, they are not satisfied with the U.S. health care system as a whole. A 1992 EBRI/Gallup poll found that while of a mandate that employers provide health benefits to their employees. The higher estimates were the result of higher The March CurrentPopulation Survey (CPS) provides an important source of information about the economic and families with annual incomes under $20,000 (table 1). While 34 percent of all individuals in families with incomes of less turing-industries that employ a majority of the work force. Workers most likely to be Respondents to the 1992 survey were instructed to provide information about their health insurance coverage during more than 7 out of 10 Americans (73 percen0 rate the U.S. health system as fair or poor (compared with 66 percent in average costs of the mandated health plan and greater price sensitivity of the demand for labor. health insurance status of the U.S. population._ The following discussion and tables are based on the March 1992 CPS. than 85,000 were uninsured, only 11 percent of all individuals in families with incomes of $20,000 or more were unin- Several policymakers have recently suggested limiting the exclusion of employer contributions to health insurance from 26 January 1993 uninsured were either self-employed or working in agriculture, construction, retail sales, or 1991. Assuming accurate responses were given, the uninsured should include only those individuals who were without 1990), most of those who indicated they had received care from a doctor or hospital in the past year rated the quality of sured. Families with incomes below the federal poverty level were more likely to be covered by publicly financed health This survey focuses primarily on the nonelderly population because this group receives health insurance coverage from workers' taxable income. Advocates assume that if contributions are limited to a maximum dollar amount or to the health services. insurance for the entire 12 months. However, a comparison of the results of the March 1990 survey with the that care as excellent or good (83 percent). a prTh num ograms e b range er oofrdifferent in bethuninsure e estima sod urtce es than s,ofde th tpe o e be ndin numbe cog vered on r of income, by peop pri le vate w employment ho insurance. would lose statu Astheir s inc , o an me job d loca sincreases, asti aon, resand ultthe of becau manda percen setage t96 es pe come rcent of the s fr o p om fopula- the Family Type average cost of a basic health plan in a geographic area, employers and employees would be more likely to choose cost- Survey of Income and Program Participation has led some researchers to believe that many respondents actually various combinations of benefit costs and sensitivity in the demand for labor to changes in costs. The estimate of Amer tion w icans ithoutag health ed 65 an insurance d over have and M the edpercentage icare covera cg oe vere . Th dis by inf publicl ormay tion financed can be u pr sef ograms ul in thdecrease, e analysiswhile of legthe islati percentage ve effective providers. Using the Tax Estimation and Analysis Model (TEAM), EBRI estimated the impact of capping tax- answer the health insurance questions with reference to either a particular point in time or to some period of time less In response to a 1991 EBRI/GalIup survey, when asked what they liked most about the overall quality of the care they 1.2 million for example can only be reached by assuming that employers are very sensitive to costs of labor and the p cro ovp ered osalsby designed private hto ealex thpand insurance access incr to ea health ses. care Because services. eligibility levels for Medicaid, the primary publicly financed Singleindividualsandindividualsin singleparentfamilieswere morelikelyto be uninsuredthanmarriedcoupleseither •exem Health pt employer insurance contributions provision to health is a p functi lans at on $2,940 of empl for fo amily yer coverage size. Nearly and $1,080 one-half for individual of all uninsured coverage. w For ork- than the full year. received from their physicians, respondents cited factors that are synonymous with higher cost such as attention and health benefit package is very expensive. As is apparent, the estimates of job loss (and of the total costs of the policy) health program for the nonelderly, are cut off at certain income levels (rather than being phased out),5 the percentage withorwithoutchildren(chart6). Marriedcouplesandtwoparentfamiliesmay havehigherlevels ofincomeand both those tilers with employer-sponsored health benefits the imposition of a tax cap would be regressive in the sense that ers were either self-employed or working in firms with fewer than 25 employees in 1991. 5Medicaid eligibility levels are set by individual states and vary from 13 percent of the federal poverty rate in Alabama to care (12 percen0, friendliness (11 percent), and availability (10 percent). When asked what they liked least about their are extremely sensitive to the assumptions used in the simulation. Among the 36.3 million nonelderly Americans who did not have health insurance coverage in 1991, most were working uninsured among families with incomes below the poverty level was slightly less than that among families with incomes adultsmaybe employed,increasingtheir chances of receivingemployment-based coverageand, ifnotcoveredthrough lower income tilers would pay a larger percentage of their income than higher income tilers toward the new tax. 77 percent in Alaska. About two-thirds of the states have higher income eligibility thresholds for "medically needy _ Twenty-two percent of self-employed persons were uninsured, compared with 17 percent of all care, no single factor received special emphasis, but they were factors that generally reduce cost, including waiting time adults (56.4 percen0, while the remainder were children (26.3 percent) and nonworking adults (17.3 percent) (chart 1). just an employer, above thisthlevel ey may . This besituation moreable occur to afford s becau inse divi fami dually h'espurcha with inse com dprivate es justheal above thin ths eur pance. overtyAmong level are poor lessan lik d near- ely to persons. All states are required to provide Medicaid coverage to pregnant women and children up to age 6 if their (8 percent); insufficient time spent by physician with patient (6 percent); and limited availability (4 percent). In addition EBRI analysis also found that the cost of an employer mandate would be borne primarily by small employers and their The total workers. numberThirty-tw of uninsured o percent under age of65 wo increased rkers infrom firms 33.6 with million fewer in 1than 988 to10 36.3 empl million oyees in 1991. were uninsured, p be oor elig famili ible fes or(u pup bto licly 124 fipercent nanced insu of th ran e c pe. overty At th level), e same bo tth ime m , arried these pe (4o 6 ppe le rcent) are also and less sinli gle kely indi than vidu thals ose(4w 7ip thercent) higher Along with shifting the distribution of the tax burden, capping the tax exemption of employer contributions to qualified income is less than 133 percent of the federal poverty level. In addition, states must cover children born after Septem- to giving high ratings to their personal health care, respondents also expressed satisfaction with their health insurance employees. EBRI estimated that an illustrative employer mandate would increase spending by employers on employer- wi incomes thout compared chil to receive drenwere with emp more loyer-s onlylikely p 9onso percent r to edbe unins ho eal f w tho ur rkers in ed sur than ance in .oth firms erfam with ilytyp 1e ,00 s. Families 0 or mowith re empl childr oyees. enwere In less 1991 likely , al- to be health plans would also generate additional federal revenue. EBRI's estimates assume no change in individual or bene ber fits 30 . , 1983, in families with income below the poverty level. sponsored health benefits by $33 billion to 886 billion. The wide range between the estimates is related to assumptions Although some of this increase can be attributed to population growth, the percentage reporting no health insurance uninsured,atleast inpartbecausethey were morelikelytobe receivingpubliclyfinancedhealth coverage.Sixty-seven employer behavior, although it is expected that significant behavioral change would occur as a result of changing the though only 27 percent of the nonelderly population lived in families whose head of household 6 A more complete examination of EBRI's analysis of various health care reform proposals can be found in EBRI's Issue about health plan costs. If employers with fewer than 25 employees were exempt from the mandate, spending would coverage has also increased from 15.9 percent to 16.6 percent between 1988 and 1991. However, there was no signifi- pe Worke rcent rs ow f in ithdividuals low earnin in gs low are inco more me slike ingle ly parent to be ufami ninsured lieswere than covered those wiby th M high edicaid earnin in gs 1991, (chart com 5)pared . Thirtwith y-oneonly perc 2 e7 nt tax treatment of health benefits. These estimates should be considered as the maximum revenue that could be raised was self-employed or worked for a firm with fewer than 25 employees, this group accounted for Brief, "Health Care Reform: Tradeoffs and Implications,_April 1992. These findings suggest that the satisfaction that insured Americans feel for their health care may reduce their willing- increase by $12 billion to $33 billion. Costs for employer-sponsored health benefits would also be redistributed. Work- cant of wo change rkers win iththe earpercentage nings belowof$10,0 the nonelderly 00 were unins population ured, com without pared health with only insurance 3 percent between of worke 1990 rs wi and th 1991. earnings of percentand31 percentoflow income marriedcouplesand singleindividualswithoutchildren, respectively,and37 because they were produced assuming no change in behavior. According to our estimates, most of the tax revenue 7A. Foster Higgins & Co., Inc. Health Care Benefits Survey, Report 1: Indemnity Plans. New York: A. Foster Higgins & ness 45 to accept percent reform of the prop uninsured. osals that may alter or ration the care they receive. ers who had previously been covered under another employer's plan would now be covered directly under their own $50,000 or more. This is primarily because low-income workers tend to be employed in industries that are less likely to percentof low incomeindividualsin twoparentfamilies.Therefore,even though membersof low-incometwoparent raised would come from middle and upper-middle income tax paypayers, with $8.3 billion coming from taxpayers with Co., Inc. 1992. employer's plan. For example, under a mandate with an average health plan cost of $1,450 per individual employee and Employment Status offer health insurance and/or have a weaker or temporary attachment to the work force. These workers may also be familieswere morelikelyto be coveredby privatehealthinsurance than membersof low-incomesingle parentfamilies annual incomes of $20,000-$50,000 and $5.7 billion coming from taxpayers with annual incomes of $50,000-$100,000. 8Hamermesh, Daniel S. "The Demand forLabor in the Long RunY In Handbook ofLabor Economics. Vol. 1. New York: Several 1992 EBRI/Gallup surveys explored public attitudes toward policy options for health care reform. These no employer size exemptions, about $20 billion in costs would be redistributed from one employer to another. About employed only part time or unemployed at times. (32percent,comparedwith 15 percent),theywere more likelyto be uninsured(36percent comparedwith 21 percent). • The uninsured are concentrated disproportionately in low-income families. In 1991, 54 percent of This compares with $2.6 billion in revenue from taxpayers with annual incomes of less than $20,000 and $2.1 billion Elsevier Science Publishers, 1986. surveys 45 percent indicate of these a pretr feansferre rence for d cemployment-bas osts ($9 billion)ed woinsurance uld be rediversus stributed government to small empl provision. oyers. If Forty-eight small emplpercent oyers were of The most important determinant of health insurance coverage is employment. Nearly two-thirds of the nonelderly have from taxpayers who earn more than $100,000 annually. EBRIalso used TEAM to estimate the federal revenue raised as the uninsured were in families with annual incomes under $20,000. While 34 percent of families respondents exempt from felt the that man employers date, the tshould otal costs be most redistr responsible ibuted amofor ng providing all employers health woul benefits d be only to full-time about $5 employees billion. and employment-based coverage. Employers purchasing group health insurance are often able to obtain less expensive aresult of an annual cap of $6,000 forfamily coverage and $2,400 for individual coverage. Most revenue would again be their with dependents incomes rather of less than the than federal $5,0government 00 were uninsured (31 percent) , only or individuals 11 percent themselves of families (14 percent). with incomes of policies because insurance companies can spread the risk across a larger group of people. The nature of employment, generated by taxing those with annual incomes between $20,000 and $50,000 ($2.8billion), followed by taxpayers with Chart 5 820,000 or more were uninsured. the The indus ultimate try, and aim the of size these ofsimulati the firm ons ofte is nto determine understand thewh C cost hart o wil and 4 l bear extent theof co coverage. sts of expan Workers ding health in large insurance firms are coverage more annual income between $50,000 and $100,000 ($1.5 billion). While Americans tend to indicate a preference for an employment-based system, there continues to be support for other Percentage Uninsured among Workers Aged 18--64, by Total Earnings, likely through to bemandating covered than that seasonal employers or pr part-time ovide it workers. to their employees. Other analysts have estimated a much smaller Workers Aged 18-64 without Health Insurance, by Firm Size, options for reform (such as Employee government-s Benefpo it nso Research red nation Institute al heal Analysis th insuran of ce) the. Ma Hrch oweve 1992 r, wh CPS ile there is widespread increase in the number o Employee f individuals Benef who it may Resel arch ose their Institjute obs Analysis because of ofth aneempl March oyer 1992 mandate CPS by assuming the wages • Several policymakers have recently suggested limiting the exclusion of employer contributions support for various reform options, surveys indicate that most Americans have not yet come to terms with the various Inan 1991, Percen d other 85 tag percent benefits e o w fo the ulduninsured fall enough were to fully working account or living for the inca ost family of the headed mandate bydworkers, plan. Regar primarily dless o because f what assumpti most ons Chart7 to 35 health ............................................................................. insurance from workers' taxable income. Using the Tax Estimation and Analysis Model lxadeoffs inherent in each option for reform--particularly with regard to cost. pe ar ople e use lid, ve it inis fami clear liesth hat eaded the rb ec yiw pio ent rkers of th (ch e art cover 2). age More wilthan l inevi 60 tab percent ly bear o th fethe cos ut nin s osured f the cov were erain ge,fam either iliestheade hrough d b lo yss Percentage UninsuredamongtheNonelderlyPopulationby , Age, of hi(rEAM), s or her job EBRI or low found er wagthat es and the other imposition benefits. Ar ofga um tax ents cap havwould e been advanced be regressive on bothin sid the es osense f the issthat ue oflower full-year 30 ............ workers with no unemployment; 53 percent were in families headed by full-year, full-time workers, and 8 EmployeeBenefitResearchInstituteAnalysisof theMarch1992CPS For example, most analysts agree that access to health care cannot be increased without increasing costs or placing whether this is a fair,equitable, or efficient result. percent lived in families headed by full-year,part-timeworkers. Even though only 12.6 percent of individuals in families income tilers would pay a larger percentage of their income than higher income tilers toward the 11,000orMoreEmployee_ IS elf E_ployed 2.6 Million12.7% 25. some limits on the care received. Yet, 77 percent of Americans said they believe everyone should receive the same headed by a full-time, full-yearworker were not covered by insurance, they represent the largest segment of the unin- new Percent tax. age amount The 20 question .and quality of whof ether health unin care, sured whether workers or an not d they their can families pay for wothe uld care, be beand tter off 86 percent ifhealth said insur they anceeither weredisagree extended to sured (53 percent). However, individuals in families headed by a part-timeworker were more likely to be uninsured 30 ....................... _ .......................................... [5{XNO99Employees _ 4.6 Million22.3%] (47 percent) or strongly disagree (39 percent) that it would be acceptable to reduce the amount of health care available them under a mandate centers on the issue of whether they are uninsured by choice. Do workers select jobs that do not than those headed by full-timeworkers. Individuals in families whose family head worked fewer than 17 hours per 15. to the elderly in order to slow the rise in health care costs and increase access to health care for all Americans. In offer health benefits in order to receive higher levels of cash compensation or other benefits? If employees are choosing • Requiring all employers to provide health benefits to workers and their dependents would week were less likely to be uninsured (26 percent) than individuals in families whose family head worked between 17 10. addition, a ma Thejo vie rity ws of ex Ame pressri edcans in thi als sostd ai teme sagree nt dareorsostr lely ongly thosediof sagree the ad uthor withand limiting should the nottybe pes attribut of services ed to thpublic e health a total compensation package that does not include health benefits, any measure that forces them to accept a package hours and 34 hours per week (31 percen0. This may be because publicly financed health coverage is less availableto decrease the number of uninsured from 36 million to 10 million, according to EBRI estimates. with health Employee benefits Benefit will make Research them Institute, worse off its . officers, trustees, sponsors, or other staff. The Employee Benefit programs will pay for low-income individuals (66 percent), the types of services health insurance plans will pay for 5- the latter group. Because many of the uninsured work for small firms, exempting employers with fewer than 25 Suite 600 Research Institute is a nonprofit, nonpartisan, public policy research organization. (61 percen0, and the introduction of new, more expensive high technology equipment that saves lives but may increase 2121 K Street. NW 0. employees would only reduce::the m / number..... of uninsured to about 25 ...................... million. costs Howeve (57r, percent). society may Despite benethis fit bunwill y forcin ingness g individu to limit als to care, purcalmost hase hea 8 out lth insuran of 10 Americans ce. Individual (79 percen0 swho choose indicated to not that the Industry--The majority of uninsured workers reported their industry of primary employment was retail trade, services, Washington, DC Total Lessthan $10,000- $20,000- $30,000- $40,000- $50,000 20.5MillionUninsured WorkersAged18-64 biggest purchase problem healthin behealth nefits ar care e gamb for society ling that as th a ey whole willis not cost. need health care services. They may make that bet knowing or manufacturing (chart 3)--$10,000 industries that em $19,999 ploy a majori $29 ty,999 of the work $39,999 force. Workers $49,999 most likely to b or e More uninsured 20037-1896 Under Age18 Aged 18-20 Aged21-24 Aged 25-29 Aged 30-44 Aged 45-54 Aged 55-64 were either self-employed or working in agriculture, construction, retail sales, or services. Agricultural workers may be 202-659-0670 Fax 202-775-6312 3