The Social and Organizational Determinants of Employment-based Health Insurance

University Of Texas At Austin, Austin TX

Investigators

Abstract

? DESCRIPTION (provided by applicant): The United States has experienced a significant decline in the coverage of employment-based health insurance in recent decades. The proportion of Americans who were covered by employment-based health plans declined from 62.1% in 1987 to 54.9% in 2012. The coverage is expected to decrease further under the Affordable Care Act without the employer mandate. While previous studies suggest that the rising premium cost is responsible for the decline in coverage, several field studies indicate that employers are reluctant to provide health insurance even when a sizable proportion of the premium is subsidized. In other words, addressing financial factors alone is unlikely to ensure affordable access to health care. The purpose of this proposal is to develop a more complete understanding of the social and organizational determinants of employment-based health insurance. Particularly, the research team will investigate how the changing labor market and its interaction with the financial costs jointly influence the provision and the terms of employment- based health insurance. With the approval from the U.S. Census, this project will utilize restricted-use, establishment-level measures from the Medical Expenditure Panel Survey-Insurance/Employer Component (MEPS-IC), combined with other measures from the Longitudinal Business Data (LBD), EEO-1 reports from the Equal Employment Opportunity Commission, the S&P's Compustat, RiskMetrics, and the Corporate Library datasets. We examine how two trends in the labor market are associated with the provision and the terms of employment-based health insurance. The first is the rise of the new conception of employment, a shift in the employment contract between employers and employees that emphasizes market-driven flexibility, weak commitment, and focuses on increasing shareholder value. The second looks at the decline in labor unions, decreasing the bargaining power of workers and potentially decreasing labor's ability to argue that health insurance is a vital component of compensation. Lastly, we analyze how the effect of costs is moderated by the employment model and workers' collective bargaining power. This project will allow us to develop a comprehensive understanding of the organizational processes that contribute to variation in insurance coverage, as well as how healthcare policies and financial incentives could be better designed to improve accessibility through employment.