Declines in employer-sponsored insurance between 2000 and 2008: examining the components of coverage by firm size

Abstract

Objective: To examine trends in employer-sponsored health insurance coverage rates and its associated components between 2000 and 2008, to provide a baseline for later evaluations of the Affordable Care Act, and to provide information to policy makers as they design the implementation details of the law.

Data sources: Private sector employer data from the 2000, 2001, and 2008 Medical Expenditure Panel Survey-Insurance Component (MEPS-IC).

Study design: We examine time trends in employer offer, eligibility, and take-up rates. We add a new dimension to the literature by examining dependent coverage and decomposing its trends. We investigate heterogeneity in trends by firm size.

Data collection: The MEPS-IC is an annual survey, sponsored by the Agency for Healthcare Research and Quality and conducted by the U.S. Census Bureau. The MEPS-IC obtains information on establishment characteristics, whether an establishment offers health insurance, and details on up to four plans.

Principal findings: We find that coverage rates for workers declined in both small and large firms. In small firms, coverage declined due to a drop in both offer and take-up rates. In the largest firms, offer rates were stable and the decline was due to falling take-up rates. In addition, enrollment shifted toward single coverage and away from dependent coverage in both small and large firms. For small firms, this shift was due to declining offer and take-up rates for dependent coverage. In large firms, offers of dependent coverage were stable but take-up rates dropped. Within the category of dependent coverage, the availability of employee-plus-one plans increased in all firm size categories, but take-up rates for these plans declined in small firms.