How do health insurance loading fees vary by group size?: implications for Healthcare reform
Rent the article at a discountRent 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.
- Abraham J., DeLeire T., Royalty A. B.: Access to health insurance at small establishments: What can we learn from analyzing other fringe benefits?. Inquiry 46(3), 253–273 (2009) CrossRef
- Bethely, J. G. (2009). Health plans make more, spend less in 2005. American Medical News. March 6, 2006. Accessed at http://www.pnhp.org/news/2006/march/medicalloss_ratios_.php. October, 23, 2009.
- Bhandari A., Wagner T.: Self-reported utilization of health care services: Improving measurement and accuracy. Medical Care Research and Review 63, 217–235 (2006) CrossRef
- Blumberg, L., & Nichols, L. (2004). Why are so many Americans uninsured? In health policy and the uninsured (pp. 35–95). Washington, DC: The Urban Institute Press.
- Blumberg, L., Shen, Y., Nichols, L., Buettgen, M., Dubay, L., & McMorrow, S. (2003). The Health Insurance Reform Simulation Model (HIRSM): Methodological Detail and Prototypical Simulation Results.
- Buntin M., Zaslavsky A.: Too much ado about two-part models and retransformation? Comparing methods of modeling medicare expenditures. Journal of Health Economics 23(3), 542–545 (2004) CrossRef
- Cameron C. A., & Trivedi P. K. (2009). Microeconometrics using stata. Stata Press. ISBN-13: 978-1-59718-048-1.
- Chernew, M., & Hirth, R. (2002). Modeling the causes and consequences of lack of health insurance coverage: Gaps in the literature. Economic Research Initiative on the Uninsured Working Paper #1 2002. Accessed on June 11, 2007. Available at http://eriu.sph.umich.edu/pdf/wp1.pdf.
- Congressional Budget Office. CBO’s Health Insurance Simulation Model: A Technical Description. Accessed November 2009. Available at http://www.cbo.gov/ftpdocs/87xx/doc8712/10-31-HealthInsurModel.pdf.
- DeNavas-Walt, C., Proctor, B., & Smith, J. (2010). Income, poverty, and health insurance in the United States: 2009. U.S. Census Bureau, August, 2010. http://www.census.gov. Accessed October 3, 2010.
- Duan N., Manning W., Morris C., Newhouse J.: A comparison of alternative models for the demand for medical care. Journal of Business & Economic Statistics 1(2), 115–126 (1983) CrossRef
- Feldstein P.: Health care economics. Delmar Publishers, Albany, NY (1999)
- Fronstin, P., & Helman, R. (2000). Small employers and health benefits: Findings from the 2002 small employer health benefits survey. EBRI Issue Brief 253. Washington, DC: Employee Benefits Research Institute.
- Garrett, A., Clemans-Cope, L., Masi, P., & Bovbjerg, R. (2008). State coverage initiatives. The urban institute’s microsimulation model for reinsurance: Model construction and state-specific application. May 2008.
- Girosi, F., et al. (2009). Overview of the COMPARE Micro simulation Model. January 11, 2009, Working Paper.
- Manning W., Mullahy J.: Estimating log models: To transform or not to transform?. Journal of Health Economics 20, 461–494 (2001) CrossRef
- Marquis, S., Buntin, M., Escarce, J., & Kapur, K. (2007a). Commentary: What is the right price of health insurance? A rejoinder. Health Research and Educational Trust
- Marquis, M., Buntin, M., Escarce, J., & Kapur, K. (2007b). The role of product design in consumers’ choices in the individual insurance market. Health Services Research. doi:10.1111/j.1475-6773.2007.00726.x.
- McLaughlin C.: The dilemma of affordability: Health insurance for small businesses. In: Helms, R.B. (eds) American health policy, The AEI Press, Washington, DC (1993)
- Monheit, A., Vistnes, J. P. (1999). Health insurance at the workplace—how important are worker preferences? Journal of Human Resources, 34(4), 770–785.
- Pauly M.: Health benefits at work: An economic and political analysis of employment-based health insurance. University of Michigan Press, Ann Arbor (1997)
- Pauly, M. (2010). Health reform without side effects: Making markets work for individual health insurance. Stanford, CA: Hoover Institution Press Publication No. 580.
- Phelps C.: Health economics. Addison-Wesley, Reading, MA (2010)
- Reinhardt, U. (1991). Breaking American health policy gridlock. Health Affairs, Summer 1991. Exhibit 1.
- Selden, T., & Sing, M. (2009). Aligning the medical expenditure panel survey to aggregate U.S. Benchmarks. Agency for Healthcare Research and Quality. Working Paper 08006. July 2008. http://gold.ahrq.gov.
- Sherlock, D. (2009). Health plan administrative costs, A mosaic piece of health care reform.
- Simon, K. (1999) Did small group health insurance reforms work? Evidence from the March current population survey 1992–1997. Working Paper, University of Maryland.
- Simon K.: Adverse selection in health insurance markets? Evidence from state small-group health insurance reforms. Journal of Public Economics 89, 1865–1877 (2005) CrossRef
- Sing M., Banthin J., Selden T. et al.: Reconciling medical expenditure estimates from the MEPS and NHEA. Health Care Financing Review 28(1), 25–40 (2006)
- Zuvekas, S., Cohen, J., & Pylypchuk, Y. (2005). Comparison of MEPS and Market Scan Health Care Expenditure Estimates
- How do health insurance loading fees vary by group size?: implications for Healthcare reform
International Journal of Health Care Finance and Economics
Volume 11, Issue 3 , pp 181-207
- Cover Date
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Health insurance
- Loading fee
- Employer sponsored insurance
- Industry Sectors