Health Insurance for All Long-Term Care Workers: Estimated Costs and Coverage Impacts in Minnesota and Recommendations for States

A major barrier to building a strong workforce to meet the growing need for long-care is lack of affordable health benefits. This study projects impacts of funding health coverage for all long-term care workers in Minnesota. Under the most cost effective model plan design, enrollment in employer-sponsored coverage would increase 73% to 100% for individual coverage and 26% to 42% for family coverage. Total monthly costs would be $698/worker in the commercial market or $634/worker through a new dedicated risk pool. Based on our findings and past research, the authors present recommendations for structuring and implementing a long-term care worker health insurance initiative.     

Portability of health insurance: COBRA expansions and small group market reform

Proposals are currently being put forth to change the health care system incrementally. One area of proposed legislation addresses portability, which allows an individual to change insurers without being subjected to a new waiting period for preexisting conditions. These proposals, discussed in this Issue Brief, contain provisions to limit preexisting condition exclusions, guarantee access to health insurance, guarantee renewal of health insurance, allow individuals to contribute to medical savings accounts on a pretax basis, and change the current law under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The proposals would affect insurers, employers, and insured individuals by potentially increasing the cost of providing and purchasing health insurance. Concern about the portability of health insurance primarily arises in situations where an individual is leaving, or would like to leave, a job. If health insurance is not offered by a prospective employer, if the worker must satisfy a waiting period before becoming eligible for coverage, if the benefits package offered through the prospective employer is less generous, or if the employee (or a dependent) has a medical condition that is considered a preexisting condition and would not be covered by the new plan, the employee may opt to remain with his or her current employer--a situation known as job lock. Expansions of COBRA may not have any effect on portability. Employers can charge up to 102 percent of the premium for COBRA coverage, making it unaffordable for many workers. Because cost is a major factor, if there is no reduction in cost (or health care cost inflation) there could be little or no increase in coverage. According to one survey, in 1994 average COBRA costs were $5,301 per COBRA covered worker, compared with $3,420 for active employees. Any expansion of COBRA would almost certainly increase employer cost for health insurance.(ABSTRACT TRUNCATED AT 400 WORDS)     

Health insurance portability: COBRA expansions and job mobility

This Issue Brief discusses continuation-of-coverage mandates under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). It provides background information on health insurance portability and job mobility, data on the cost to employers of providing continuation of coverage to former employees, and a summary of empirical research on COBRA's effect on employee benefits and job mobility. COBRA coverage can be considered advantageous for most workers, as it allows continuation of the health insurance policy they had in place at work when they lose or leave a job. Although employees can be required to pay 102 percent of the premium for COBRA coverage, they can usually realize significant savings compared with the cost of purchasing the equivalent insurance policy in the private market. Many employers consider COBRA to be a costly mandate for three reasons. First, premiums collected from COBRA beneficiaries typically do not cover the costs of the health care services rendered. Second, COBRA imposes an additional administrative cost on employers. Third, many employers view the penalties for noncompliance as excessively large. According to a survey conducted by Charles D. Spencer & Associates, of the 10.2 percent of employees and dependents who were eligible for COBRA coverage in 1996, over 28 percent elected it. In addition, average employer claims costs for COBRA beneficiaries amounted to $5,591, compared with $3,332 for active employees in surveyed plans. According to Employee Benefit Research Institute estimates of the Survey of Income and Program Participation (SIPP), the COBRA population is much older than the general insured population. COBRA beneficiaries also have higher personal income than the general insured population, with this difference being almost entirely due to differences in retirement income. Any attempt to expand COBRA coverage, either through subsidies or by allowing workers to choose from plans with lower premiums, would likely result in increased employer health care costs. As a result, employers may consider various alternatives to reduce, shift, or eliminate the impact of this increased cost. One alternative would be to continue requiring active employees to share in the increased costs through higher employee contributions. A second alternative would be to reduce or eliminate health care benefits for active employees and/or future retirees and their families. A third alternative would be to reduce the size of the work force eligible for health insurance benefits. Finally, employers may pass additional costs on to workers or consumers.     

Well-being and occupational roles among middle-aged women

One purpose of the present study is to explore the stability of the pattern of health/work and sickness absence among middle-aged women over a period of three years. This study tested two hypotheses: (a) that enduringly healthy working women would perceive more valued occupational roles and higher well-being than long-term sick-listed women; (b) that high levels of well-being at baseline would predict enduring health and occupational role value at a 3-year follow-up. Middle-aged women (n = 208) answered a postal survey with the Role checklist, a well-being scale and questions about work and sickness situation. The results showed that there was a considerable variability in the pattern of health/work and sickness absence. The variability was greatest among the women who were long-term sick-listed at baseline, and the internal drop out was great among them. The results showed that the enduringly healthy women experienced a more valued worker role and higher well-being than the long-term sick-listed women. Furthermore, high levels of well-being concerning health and work predicted enduring health in the studied sample, and high well-being concerning work was predictive of a valued worker role. Interventions that enable women to develop valuable worker and leisure roles, as well as harmony between different roles, may be important constituents of health promotion/rehabilitation programmes.     

The Crisis in Retiree Health Benefits

Over 7 million retirees currently are covered by employer-sponsored health benefits plans in which the employer contributes all or a portion of the premium cost. Almost one-third of these retirees are under age 65 and therefore lack Medicare coverage. The annual cost to employers for this coverage is now $9 billion and is expected to be $22 billion in 20 years. However, inflation in health care costs, recent court decisions, the aging of America, and a major proposed accounting rule change by the Financial Accounting Standards Board have combined to produce a "crisis in retiree health benefits" in the business sector. As a result, employers are rapidly redesigning retiree benefit plans to shift future health care cost increases to their retirees. Until now, the aging network has been largely oblivious to this transformation in financing. Yet, this "crisis" begs for public/private sector dialogue and partnership, and the White House Conference on Aging could be a major forum for this dialogue.     

Trends in Employee Wage and Health Insurance Compensation for Employer-Sponsored Health Insurance (ESI) Coverage

Health insurance coverage continues to be an important benefit of employment and employer-sponsored insurance is the most prominent form of health coverage in the US. We examine trends in both employer and employee contributions to the costs of health insurance premium between 2002 and 2005 and assess these contributions relative to changes in worker wages. We do this for the US overall and for the 50 states plus the District of Columbia. We found a significant increase of 15.5% in the share of total compensation going toward health benefits (from 12.3–14.2%) for workers with individual coverage and an increase of 13.5% (from 20.6–23.4%) for workers with family coverage. Wages over this time period decreased 3.0% for workers with individual coverage and increased 0.8% for workers with family coverage.     

Questions and answers on health insurance benefit issues

This Issue Brief addresses eight topics in the areas of health insurance and health care costs. Using a question and answer format, the discussion draws largely on EBRI research and the EBRI Databook on Employee Benefits, third edition. In 1993, U.S. expenditures on health care were $884.2 billion, and they are projected to reach $2,173.7 billion by 2005, increasing at a projected average annual rate of 7.8 percent. Health care spending accounted for 13.9 percent of Gross Domestic Product (GDP) in 1993 and is projected to reach 17.9 percent of GDP by 2005. Among the factors contributing to the increase in health care costs are the growth in the number of individuals with traditional reimbursement health insurance coverage, the rapid expansion of technology and treatment options, and demographic factors such as the aging of the population. In 1993, employers, both public and private, spent $235.6 billion on group health insurance, accounting for 6.2 percent of total compensation. Group health insurance is the fastest growing component of total compensation, increasing at an average annual rate of 13.7 percent from 1960 to 1993. An increasing number of employees are required to make a cash contribution to their health insurance plan premium. In 1993, 61 percent of full-time employees in medium and large private establishments who participated in an employee only health insurance plan were required to make a contribution to the premium, up from 27 percent in 1979. In 1993, 185.3 million persons under age 65 had health insurance coverage, while 40.9 million people--or about 18.1 percent of the nonelderly population--received neither private health insurance nor publicly financed health coverage. Of those individuals who had health insurance coverage, 60.8 percent, or 137.4 million persons, received their health insurance through an employment-based plan. In 1993, 15.2 percent of the nonelderly population without health insurance coverage were noncitizens. In six states noncitizens represented a higher proportion of the total uninsured population than individuals in the nation as a whole. An increasing number of employers are self-funding their health insurance plans. In 1994, 74 percent of employers with 500 or more employees self-funded their health insurance plans, up from 63 percent in 1993. An estimated 22 million full-time employees in private industry and state and local governments participated in a self-funded employment-based health insurance plan.(ABSTRACT TRUNCATED AT 400 WORDS)     

Expanding the focus of health insurance education for Medicare beneficiaries

Health insurance education plays an important role in helping consumers make informed decisions about their need for supplemental coverage. This article reviews findings on the knowledge of Medicare beneficiaries about their health insurance coverage. Then, current health insurance education programs are examined with regard to their ability to meet the needs of a competition-based public policy. Barriers outside the control of individuals that impede the growth of the long-term care insurance market are identified and the need for an alternative, broader form of health insurance education is suggested. Changes in the scope and content of health insurance education are proposed that would educate the elderly to their own needs as well as the larger policy issues. An expanded model of education based on the concept of the Swedish study circle is discussed to illustrate the possibility of combining individual knowledge and public debate about complex social issues.     

Expanding the Focus of Health Insurance Education for Medicare Beneficiaries

Health insurance education plays an important role in helping consumers make informed decisions about their need for supplemental coverage. This article reviews findings on the knowledge of Medicare beneficiaries about their health insurance coverage. Then, current health insurance education programs are examined with regard to their ability to meet the needs of a competition-based public policy. Barriers outside the control of individuals that impede the growth of the long-term care insurance market are identified and the need for an alternative, broader form of health insurance education is suggested. Changes in the scope and content of health insurance education are proposed that would educate the elderly to their own needs as well as the larger policy issues. An expanded model of education based on the concept of the Swedish study circle is discussed to illustrate the possibility of combining individual knowledge and public debate about complex social issues.     

Gynecological services utilization by contraceptive clients: a cost analysis

A cost analysis of gynecological service use by students enrolled in a prepaid health plan at the University of Massachusetts revealed that pregnancy and abortion-related services account for almost half of total costs. The medical records of 495 randomly selected students who presented for diaphragm care during 1980-81 were reviewed and 78% of these women were interviewed. 27% had had at least 1 pregnancy; in 15% of these cases, the pregnancy was diaphragm-related, yielding a Pearl Index of 9.75 pregnancies/100 woman-years of use. Overall, 25% of students (33% of seniors) had an abortion while at college. Study subjects made a total of 1483 visits to the gynecological service and saw an average of 3.3 practitioners. 67% of contraception-related visits were for diaphragm fits, checks, or replacements; 24% involved a change to pills. The average cost per visit for diaphragm fit or method change was $31.20 if the provider was a physician ($22.60 for a nurse practitioner); the cost for diaphragm follow up by a physician was $23.60 ($16.60 for a nurse practitioner). For seniors, the average cost to the health plan over 3.4 years of visits was $83.10 for contraception, $47.43 for pregnancy-related care and abortion counseling, and $100.51 for other gynecological problems (e.g., vaginitis, menstrual disorders) and the annual examination. The $231.04 total cost/senior represents half of the $460 paid in direct premiums. Further analysis is recommended to determine whether increased resource allocation to contraceptive counseling would reduce pregnancy-related costs.     

Job matching and return to work: Occupational rehabilitation as the link

Return to work after injury or illness is important for the worker and the employer. Medical providers manage and treat the worker with the illness or injury. Except in cases of focused specialists, the medical professional's role is to take care of a patient, rather than empower a worker. As much as there is promotion of the workers compensation health care system to be similar to sports medicine, there are significant dissimilarities. One major barrier is that the medical caregivers do not know the demands of jobs as they would know the details of sports. Thus, there is a gap in returning a worker to function as the medical professional cannot accurately match the worker to specific jobs. A new model of job function matching, based on research and skills of occupational rehabilitation professionals, is proposed to bridge the gap between the medical community, the employers and the workers.     

The economic evaluation of a Participatory Ergonomics programme to prevent low back and neck pain

This study was an economic evaluation conducted alongside a cluster randomised controlled trial with a follow-up of 12 months. The aim was to evaluate the cost-effectiveness and cost-benefit of the Stay@Work Participatory Ergonomics programme (PE) compared to a control group (no PE). In total, 37 departments (n=3047 workers) were randomised into either the intervention (PE) or control group (no PE). During a meeting, working groups followed the steps of PE, and composed and prioritized ergonomic measures aimed to prevent low back pain (LBP) and neck pain (NP). Working groups had to implement the ergonomic measures within three months in their department. Cost data included those directly related to LBP and NP. Cost-effectiveness analyses (CEA) and cost-benefit analyses (CBA) were performed. After 12 months, health care costs and costs of productivity losses were higher in the intervention group than in the control group (the mean total cost difference was $/euro$127; 95% CI $/euro$-164 - $/euro$418). From a societal perspective, the CEA showed that PE was not cost-effective compared to control for LBP and NP prevalence, work performance, and sick leave. The CBA from a company perspective showed a monetary loss of $/euro$78 per worker. The PE programme was neither cost-effective nor cost-beneficial on any of the effect measures.     

Small employers and health benefits: findings from the 2000 Small Employer Health Benefits Survey

Many small employers (between two and 50 workers) are making decisions about whether to offer health benefits to their workers without being fully aware of the tax advantages that can make this benefit more affordable. Fifty-seven percent of small employers did not know that they can deduct 100 percent of their health insurance premiums. Nearly one-half of small employers are not aware that workers who purchase health insurance on their own generally cannot deduct 100 percent of their health insurance premiums. Small employers are largely unaware of the laws that have been enacted by nearly all states and the federal government with the intent of making health insurance more accessible and more affordable for many small employers. More than 60 percent did not know that insurers may not deny health insurance coverage to small employers even when the health status of their workers is poor. Most employers offer sound business reasons for offering health benefits to workers. Many have found that it helps with employee recruitment and retention, increases productivity, and reduces absenteeism. Nearly 50 percent of the employers offering dependent (family) coverage report that the workers do not take coverage for their dependents because the dependents have coverage from somewhere else. Twenty-seven percent report their employees decline dependent coverage because they cannot afford the premiums. Many small employers that do not offer health benefits are potential purchasers. Twelve percent are either extremely or very likely to start offering health benefits in the next two years, and 17 percent are somewhat likely to start offering health benefits. A number of factors would increase the likelihood that a small business would seriously consider offering a health benefits plan. Two-thirds of small-business owners said they would seriously consider offering health benefits if the government provided assistance with premiums. Almost one-half would consider doing so if insurance costs fell 10 percent. In addition, one-half would be more likely to seriously consider offering a health benefits plan if employees demand it. Many small employers with health benefits have recently switched health plans, and 34 percent report that they did so within the past year. Affordability for the employer and the worker is clearly a critical factor affecting the likelihood of switching health plans. Nearly all employers who have switched health plans within the past five years cite cost as the main reason. One-third of companies offering health benefits think they will change coverage, and 5 percent think they would drop coverage if the cost of health insurance were to increase by 5 percent.     

Medical tourism: reverse subsidy for the elite

The medical tourism sector in India has attracted global attention, given its phenomenal growth in the past decade. India is second only to Thailand in the number of medical tourists that it attracts every year. Estimates indicate that the medical tourism market in India could grow from $310 million in 2005 to $2 billion by 2012. These figures are significant when contrasted with India's overall health care expenditure - $10 billion in the public sector and $50 billion in the private sector. Factors that have contributed to this growth include the relative proficiency in English among health care providers and the cost effectiveness of medical procedures in India. Generally, most procedures in Indian hospitals cost a quarter (or less) of what they would cost in developed countries. The expansion of medical tourism has also been fueled by the growth of the private medical sector in India, a consequence of the neglect of public health by the government. India has one of the poorest records in the world regarding public financing and provisioning of health care. A growing driver of medical tourism is the attraction of facilities in India that offer access to assisted reproductive care technologies. Ironically, this is in sharp contrast with the acute neglect of the health care needs of Indian women. The Indian government is vigorously promoting medical tourism by providing tax concessions and by creating an environment enabling it to thrive. However, there is a distinct disjunction between the neglect of the health care needs of ordinary Indians and public policy that today subsidizes the health care of wealthy foreigners.     

Understanding the diverse needs of the Medicare population: implications for Medicare reform

Meeting the health care needs of millions of elderly and disabled Americans is central to the debate over Medicare's future. Using data from a nationally representative survey of 3,309 beneficiaries, Medicare's most vulnerable beneficiaries were profiled, examining variations in coverage, satisfaction, access, and financial difficulties. A substantial portion of the Medicare population--two thirds--were found to have health problems or low incomes. The analysis found that about 40% of beneficiaries with incomes below the poverty level, in fair or poor health, or with ADL limitations, have difficulties paying their medical bills or getting needed health care. Medicare's disabled, under-65 beneficiaries are at even higher risk: nearly half (47%) have health care access problems or deal with financial hardship due to medical bills. The diverse needs and experiences of the Medicare population are underscored, providing new insights into the challenge of maintaining or improving protection for those with greatest need while assuring the long-term fiscal viability of the program.     

Expanding health insurance for children: examining the alternatives

This Issue Brief examines the issue of uninsured children. The budget reconciliation legislation currently under congressional consideration earmarks $16 billion for new initiatives to provide health insurance coverage to approximately 5 million of the 10 million uninsured children during the next five years. Proposals to expand coverage among children include the use of tax credits, subsidies, vouchers, Medicaid program expansion, and expansion of state programs. However, these proposals do not address the decline in employment-based health insurance coverage--the underlying cause of the lack of coverage, to the extent that a cause can be identified. What is worse, some proposals to expand health insurance among children may discourage employers from offering coverage. Between 1987 and 1995, the percentage of children with employment-based health insurance declined from 66.7 percent to 58.6 percent. Despite this trend, the percentage of children without any form of health insurance coverage barely increased. In 1987, 13.1 percent were uninsured, compared with 13.8 percent in 1995. Medicaid program expansions helped to alleviate the effects of the decline in employment-based health insurance coverage among children and the potential increase in the number of uninsured children. Between 1987 and 1995, the percentage of children enrolled in the Medicaid program increased from 15.5 percent to 23.2 percent. Some questions to consider in assessing approaches to improving children's health insurance coverage include the following: If the government intervenes, should it do so through a compulsory mechanism or a voluntary system? Is the employment-based system "worth saving" for children? In other words, are the market interventions necessary to keep this system functioning for children too regulatory, too intrusive, and too cumbersome to be practical? In addition to reforming the employment-based system, what reforms are necessary in order to reach those families who have no coverage through the work place? Which approaches are both efficient and politically acceptable? Employment-based coverage of children will likely continue. The challenge for lawmakers is to find a way to cover more uninsured children without eroding employment-based coverage. Several current legislative proposals attempt to avoid this problem by excluding children who have access to employment-based coverage. Without such a requirement, the opportunity to purchase coverage at a discount would create incentives for some low-income employees to drop dependent/family coverage, which in turn could lead some employers to drop their health plans.     

Proposed bill for HEROES Act would give $1.5 billion to SAPT block grant

With the House of Representatives planning to vote last Friday on the fourth COVID‐19 stimulus package, substance use treatment stands a chance of being included — if the Senate, which at press time was still opposing the measure, as was the White House, goes ahead to approve it as well. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, for about $2 trillion, would finally give some money to states, counties and health care. So far, more than $2 trillion has been spent on stimulus funding, with the field trying hard to be included in each bill (see “NASADAD requests $250 million for Phase 4 stimulus,” ADAW April 13, https://onlinelibrary.wiley.com/doi/10.1002/adaw.32688 ).     

Questions and answers on employee benefit issues

This Issue Brief addresses 19 topics in the areas of pensions, health insurance, and other benefits. In addition to the topics listed below, the report includes data on the prevalence of benefits, tax incentives associated with benefits, lump-sum distributions, number of private pension plans, pension coverage rates, 401(k) plans, employer spending on group health insurance, self-insured health plans, employer initiatives to reduce health care costs, and employers' response to the retiree health benefits accounting rule, and flexible benefits plans. In 1992, U.S. employers (public and private) spent $629 billion for noncash benefits, representing nearly 18 percent of total compensation, excluding paid time off. In 1992, 71 percent of the 50.1 million individuals aged 55 and over received retirement benefits, including distributions from private and public pensions, annuities, individual retirement accounts, Keoghs, 401(k)s, and Social Security. Among the 76 percent of all private pension plan participants who participated in a single plan, 30 percent named a defined benefit plan as their pension plan type, 58 percent named a defined contribution plan as their pension plan type, and 12 percent did not know their plan type. Private and public pension funds held more than $4.6 trillion in assets at the end of 1993. The 1993 year-end assets are more than triple the asset level of 1983 (nominal terms). According to the Congressional Budget Office, U.S. expenditures on health care were expected to have reached $898 billion in 1993, up from $751.8 billion in 1991, an increase of 19.4 percent in nominal terms.