Mobile Edition
Print
Get the Mag
Weekly UpdatesFirm size by number of employees was the major determinant of job-based health insurance in Montana. Fifty-nine percent of Montana firms with 10 or fewer employees did not offer health insurance (Figure 5 and Table 1). There was some difference in insurance-offer rates when the small firm cutoff of 10 or fewer employees was subdivided. Sixty-three percent of the firms with five or fewer employees did not offer insurance, compared to 48 percent of firms with six to 10 employees.
[FIGURE 5 OMITTED]
The percentage of firms not offering insurance decreased to 29 percent for those with 11 to 19 employees, and continued to drop as firm size increased. More than 95 percent of firms with more than 100 employees offered health insurance and 100 percent of very large employers of 500 or more workers offered health insurance.
No matter how large the firm, though, some workers were not offered insurance. Large firms typically offered insurance to a higher proportion of their workforce than did small firms. On average, businesses required workers to put in at least 30 hours per week to qualify for health coverage. The average waiting period before becoming eligible for the employer's health coverage plan was four months.
Thirty percent of firms with 10 or fewer employees offered insurance to all employees, a rate that increased to 53 percent for firms with 11 to 20 employees. The proportion of firms offering insurance to all employees remained at about 50 percent for firms up through those with more than 100 employees. Even large firms with 500 or more employees did not extend insurance benefits to all.
Monthly health insurance premiums for employer-based health insurance include both the employer's share and the employee's share. These shares in dollar amounts for
Montana workers and employers were measured by insurance premiums for the employee only, for employee and spouse, and for employee and family. Average monthly premium for employee-only coverage was $35 for the employee, with the balance of $295 paid by the employer. The monthly premium of $488 for employee and spouse coverage included an average $92 contribution by the worker. Family coverage was $597, of which about 21 percent--or $122--was paid by the employee.
The high cost of premiums were cited as the major reason that businesses did not offer or thought other firms did not offer health insurance (Figure 7). Eighty-one percent of the firms responding to this question thought premiums were too high and prevented businesses from offering insurance. Six percent thought high turnover was a major reason Montana firms do not offer health insurance coverage, and another 9 percent thought employees were covered by another plan, perhaps that of their spouse or partner, and therefore did not need insurance.
[FIGURE 7 OMITTED]
Montana employers were asked reasons why their eligible employees did not use the health insurance coverage offered (Figure 8). Sixty-four percent thought or knew that their employees were covered by another plan. Five percent said employees who did not use the firm's coverage did not need insurance. Twenty-eight percent of the employers responding to this question cited high premium costs and the affordability of insurance as the major reason some workers did not use the firm's health insurance plan.
[FIGURE 8 OMITTED]
Employer Views on Costs and Policy Options
Montana business managers blamed the high cost of health insurance premiums on the increasing cost of basic medical services such as hospital care, prescription drugs, and physician care. Malpractice insurance costs were another factor thought to be driving insurance premiums higher. Better medical technology, higher insurance company profits and higher health care utilization by consumers were three factors also cited, although with a lower frequency, by employers.
Policy options for increasing employer-based insurance coverage were examined in the employer survey. Firms that do not offer health insurance (n = 302) were asked for their reaction to the possibility of tax credits offsetting a portion of health insurance premiums for workers. They were also questioned about attitudes and reaction to buy-ins into large, public health insurance plans like the state employees' plan, with eligibility confined to low-income employees. In addition, employers were asked about purchasing pool policies that would allow small businesses to join together to purchase insurance at rates similar to those found in large group plans. More detailed analysis of policy options will be conducted by the State Health Access Data Assistance Center at the University of Minnesota School of Public Health (www.shdac.org).
Employer reactions to tax credits for health insurance premiums were qualified by credits with a sunset provision whereby tax credits would be in effect for five years versus an unlimited time (no sunset). They were offered several possible responses. Fifteen percent of the firms not offering insurance said they would not offer health insurance even if the tax credit policy option were available. Eighteen percent said they did not know what their reaction would be to a tax credit. Nineteen percent said they would offer health insurance if the tax credit were 40 percent, and another 48 percent said they would offer it at a tax credit rate of 50 percent or higher.
Reactions to the two purchasing pool options were varied. A small percentage of firms not offering health insurance would still not offer insurance under either of the pool alternatives. Other responses were conditional on learning more about the alternatives and on the cost arrangements. The strongest, unequivocal response of "absolute" participation was for the small business purchasing pool--with 40 percent of the firms indicating they would participate. Nineteen percent expressed a willingness to participate via a buy-in to a state employee insurance program.
Conclusions
Some population groups in Montana experience significantly higher rates of uninsurance than the statewide average, notably young adults, American Indians, and people with lower incomes.
There are many different reasons wily a person may lack health insurance. Qualitative research conducted through focus groups and key informant interviews as a complement to the 2003 Montana Household Survey and the Employer Survey showed that some of the main reasons for disparities in health insurance coverage are cost and affordability to consumers and to employers. Malay small employers were barely able to afford insurance for themselves and their families. Differential access to employer-based and private health coverage was also a major factor in explaining why some people had health insurance.
Many jobs, especially in small business, were with employers who either did not offer health insurance to any workers or to only a select group. Therefore, it is likely that no single strategy will succeed in reducing uninsurance rates for all of the population groups that experience higher rates than the statewide average. Instead, strategies must be tailored to particular groups of people, taking into consideration the wide variety of reasons for being uninsured.
Strategies for reducing the rate of uninsurance should be evaluated in terms of their potential to reach a large number of uninsured, as well as their potential to reduce disparities in uninsurance rates among different population groups. Montana also faces the challenge of increasing insurance coverage in the face of rapidly rising health care costs. Private health insurance premiums have been growing at or near double digit rates, in Montana and nationally.
It is difficult to know how these rapid increases in the price of insurance will affect rates of private health insurance coverage. Anecdotal evidence suggests that while businesses were experiencing strong economic growth and low unemployment, they were reluctant to increase the offer of health insurance to workers. With a slowdown in the Montana economy and increased unemployment, there may be more resistance to employer-based health insurance. If employers discontinue health insurance benefits or pass on a higher share of the premium cost to employees, it is possible that more Montanans (particularly those with low incomes) could lose private health insurance coverage. Further research and monitoring will be needed to determine the impacts of rising health care costs and an economic slowdown on health insurance coverage in Montana.
Survey Methodology
The 2003 Montana Household Survey was a stratified random digit dial telephone survey conducted by the Survey Research Center at The University of Montana's Bureau of Business and Economic Research during the winter of 2003.
One person in each household was randomly selected as a target for the survey; if the person was a child, then an adult was asked to respond on their behalf.
In order to fulfill the study goals of gaining better information on health insurance disparities by race, ethnic group and region, some geographic areas of the state were sampled with higher probability than were other areas,
In all, 5,074 interviews were completed. The overall response rate was 75 percent. The sample size included all age groups and was much larger than other samples used for estimating the state's uninsured rate--such as the Census population survey (of about 1,500 households) or the Behavioral Risk Factor Survey (3,100 Montana adults) conducted by the Centers for Disease Control.
The 2003 Montana Business Insurance Survey was also a stratified random digit dial telephone survey. Also conducted by the BBER, the survey contacted a representative sample of 530 Montana employers.
Links to these reports are available on the Montana Department of Public Health and Human Services Web site at http://www.dphhs.mt.gov.
FEED