United States Small Business Administration
Office of Advocacy
Measuring the Uninsured by Firm Size and Employment Status: Variation in Health Insurance Coverage Rates (Part I)
by Mark C. Berger, Dan A. Black and Frank A. Scott
1994. 57p. Carolyn Looff and Associates, 1635 Ashwood Road, Lexington, KY 40502 under contract no. SBA-7642-OA-92
Growing dissatisfaction with current methods of financing health care and increasing concern about the size of the uninsured population have led to proposals for substantial revisions to the health care system. Many of these proposals could have differential impacts on small businesses. Measuring firm size differences in health insurance coverage is an important part of assessing the effects of health care reform on small business.
The objective of this study was to estimate the extent of health insurance coverage - and, conversely, non-coverage - among the U.S. population, with a focus on analyzing the uninsured by firm size and employment status.
This study: (1) evaluates alternative data sources that can be used to produce estimates of the number of the uninsured by firm size, and (2) focuses on the March Current Population Surveys from 1988 to 1992 to obtain estimates of the insured and uninsured by firm size and economic and demographic characteristics.
Scope and Methodology
Two major data sources, the Current Population Survey (CPS) and the Survey of Income and Program Participation (SIPP), are appropriate for estimating the number and extent of the uninsured by employment status and firm size. Both are available from the U.S. Department of Commerce, Bureau of the Census.
Overall, the CPS is better suited for a detailed analysis of the uninsured because it is a larger sample and is available on an annual basis - i.e., the March CPS. In the March CPS, the health insurance questions determine whether an individual has had coverage from various sources at any time during the previous year. In addition, the March CPS has included firm size information since 1988, permitting estimates of insurance coverage by firm size and employment status over an extended period.
The March CPS also contains demographic information such as age, gender, race, marital status, education attainment and family structure. Economic and labor force data include industry, occupation, class of worker, work experience and income.
The study examined the sources of health insurance coverage including direct employer-provided coverage, coverage by other's employer and non-employer coverage. The study also analyzed the size of firm from which individuals received indirect coverage, i.e., coverage from a family member's employer.
Between 1988 and 1992 the number of uninsured in the United States increased from 31.0 million to 35.5 million people. In 1992, almost 21 million (about 60 percent) of the uninsured were working. Also in 1992, 16.4 percent of private, non-agricultural wage-and-salary workers lacked health insurance.
- Workers in small firms are significantly more likely to be uninsured than workers in large firms. In 1992, 25.9 percent of private, non-agricultural wage-and-salary workers in firms with fewer than 25 employees lacked some form of health insurance, compared with 10.3 percent of workers in firms with 500 or more employees. Between 1988 and 1992 the proportion of uninsured increased across all firm sizes.
- The unincorporated self-employed are less likely to have health insurance than are the incorporated self-employed. In 1992, 23.9 percent of the unincorporated self-employed lacked health insurance coverage from any source, compared with 9.1 percent of the incorporated self-employed.
- Apart from covering 7.3 million of their own workers, firms with fewer than 25 employees were the source of health insurance for 9.3 million persons in 1992, for a total of 16.6 million persons. Apart from covering their own workers, firms with 500 or more employees were the source of health insurance for 35.4 million persons, for a total of 63.1 million persons.
- The rate of health insurance coverage varies across the population. In 1992, workers who were aged 45 to 64 years, white, non-Hispanic, married and with high education levels were more likely to have insurance provided by their employer. Women were more likely than men to be covered by health insurance from any source, while the opposite was true for employer-provided insurance.
The complete report is available from:
National Technical Information Service
U.S. Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4639 (TDD)
Order Number: PB94-195153
*Last Modified 6-11-01