To offer or not to offer: the role of price in employers' health insurance decisions.
OBJECTIVE
To estimate the effect of changes in price on employers' decisions to offer health insurance.


METHODS
A 1993 survey of 22,347 private employers in ten states was used.


METHODS
Probit regression was used to estimate the probability of offering insurance as a function of the price and employer characteristics. For employers who did not offer insurance, a price cannot be directly observed. We estimated price for nonofferors using reported quotes received by recent shoppers and a selection model to correct for differences between recent shoppers and nonshoppers.


RESULTS
Changes in price affect decisions to offer insurance; however, even a 40 percent reduction in premiums would lead to only a 2 to 3 percentage point increase in the share of employers offering insurance. Employers of low-wage workers are substantially less likely to offer health insurance than other employers.


CONCLUSIONS
Policies to reduce the number of uninsured that focus on increasing the supply of employment-based insurance are unlikely to have the intended effect unless coupled with policies to help low-wage workers afford insurance.
Marquis
M S
MS
RAND, Arlington, VA 22202, USA.
Long
S H
SH
D003625:Data Collection; D003659:Decision Making, Organizational; D017049:Employer Health Costs; D005249:Fees and Charges / Q000706:statistics & numerical data; D006264:Health Benefit Plans, Employee / Q000191:economics*; D006302:Health Services Research; D017057:Medically Uninsured; D015233:Models, Statistical; D012044:Regression Analysis; D014481:United States