Why did employee health insurance contributions rise?
We explore the causes of the dramatic rise in employee contributions to health insurance over the past two decades. In 1982, 44% of those who were covered by their employer-provided health insurance had their costs fully financed by their employer, but by 1998 this had fallen to 28%. We discuss the theory of why employers might shift premiums to their employees, and empirically model the role of four factors suggested by the theory. We find that there was a large impact of falling tax rates, rising eligibility for insurance through the Medicaid system, rising medical costs, and increased managed care penetration. Overall, this set of factors can explain more than one-half of the rise in employee premiums over the 1982-1996 period.
Gruber
Jonathan
J
Department of Economics, Massachusetts Institute of Technology, MIT E52-355, 50 Memorial Drive, Cambridge, MA 02142-1347, USA. gruberj@mit.edu
McKnight
Robin
R
D003361:Cost Allocation / Q000706:statistics & numerical data / Q000639:trends*; D017047:Cost Sharing / Q000706:statistics & numerical data / Q000639:trends; D017049:Employer Health Costs; D005249:Fees and Charges / Q000639:trends*; D006264:Health Benefit Plans, Employee / Q000191:economics* / Q000706:statistics & numerical data / Q000639:trends; D006302:Health Services Research; D006801:Humans; D008329:Managed Care Programs / Q000191:economics / Q000706:statistics & numerical data; D008484:Medicaid / Q000191:economics / Q000706:statistics & numerical data; D017059:Models, Econometric; D012044:Regression Analysis; D014481:United States