International Journal of Health Care Finance and Economics

, Volume 11, Issue 3, pp 181-207

First online:

How do health insurance loading fees vary by group size?: implications for Healthcare reform

  • Pinar Karaca-MandicAffiliated withDivision of Health Policy and Management, University of Minnesota School of Public Health Email author 
  • , Jean M. AbrahamAffiliated withDivision of Health Policy and Management, University of Minnesota School of Public Health
  • , Charles E. PhelpsAffiliated withDepartment of Economics, University of Rochester, Provost Emeritus

Rent the article at a discount

Rent now

* Final gross prices may vary according to local VAT.

Get Access


The health insurance loading fee represents the portion of the premium above the expected amount of medical care expenditures paid by the insurance company. The size of the loading fees and how they vary by employer group size have important implications for health policy given the recent passage of the Patient Protection and Affordable Care Act. Despite their policy relevance, there is surprisingly little empirical evidence on the magnitude and the determinants of health insurance loading fees. This paper provides estimates of the loading fees by firm size using data from the confidential Medical Expenditure Panel Survey Household Component–Insurance Component Linked File. Overall, we find an inverse relationship between employer group size and loading fees. Firms of up to 100 employees face similar loading fees of approximately 34%. Loads decline with firm size and are estimated to be on average 15% for firms with more than 100 employees, but less than 10,000 employees, and 4% for firms with more than 10,000 workers.


Health insurance Loading fee Employer sponsored insurance

JEL Classification