Coburn, Andrew F.

Kilbreth, Elizabeth

English

University of Southern Maine: Digital Commons@USM

University of Southern Maine USM Digital Commons Access / Insurance Maine Rural Health Research Center (MRHRC) 5-1-1998 Employer-based Health Insurance Coverage of Workers: Are Rural Firms and Workers Different? Andrew F. Coburn Elizabeth Kilbreth Follow this and additional works at: https://digitalcommons.usm.maine.edu/insurance Recommended Citation Coburn, Andrew F. and Kilbreth, Elizabeth, "Employer-based Health Insurance Coverage of Workers: Are Rural Firms and Workers Different?" (1998). Access / Insurance. 88. https://digitalcommons.usm.maine.edu/insurance/88 This Policy Brief is brought to you for free and open access by the Maine Rural Health Research Center (MRHRC) at USM Digital Commons. It has been accepted for inclusion in Access / Insurance by an authorized administrator of USM Digital Commons. For more information, please contact jessica.c.hovey@maine.edu. Maine Rural Health Research Center    •    Institute for Health Policy May, 1998Research & Policy BriefPrior research indicates that rural workers are less likely toobtain health insurance coverage through their employer.The reasons for this rural-urban differential in coveragerates are not well understood, however. Differences incoverage rates may stem from differences in the proportionof workers offered the chance to participate in an employerplan or in the proportion of workers who enroll in an offeredplan. Knowing whether rural firms and employees arefundamentally different than their urban counterparts isimportant to guide policy interventions aimed at increasingaccess to health insurance coverage.This study uses data from the 1993 Robert Wood JohnsonFoundation Employer Health Insurance Survey to measuredifferences in the proportion of rural and urban workers whoare offered insurance coverage through their employer andin their rates of participation in offered plans, and to assessthe effects of firm size, wages, and other factors in explain-ing the residential differences. Study findings confirm theresults of prior research indicating that the probability of arural worker being covered by an employer-sponsored planis lower than of an urban worker. This difference is theproduct of a 10 percent difference in the probability of anemployee being offered coverage and a 4 percent differencein the probability of a worker enrolling, if offered a plan. Theshortfall in the probability of employer-based coverage iseliminated, however, when we adjust rural firm size andwages to urban levels, indicating that the smaller averagefirm size and lower wages found in rural areas are primarilyresponsible for the observed differential.These findings suggest that rural workers and their  employ-ers do not face coverage barriers unique to rural areas,possibly driven by factors such as informational barriers,distinct business cultures, or delivery system differences inthe availability of free care. Such findings might havesuggested the need for policy interventions specific to ruralenvironments. It appears that policy solutions fitting urbanAmerica are likely to work in rural America as well. Inparticular, policies that target the special problems andbarriers that small firms and their employees face in obtain-ing and affording health insurance—including small groupreform, health insurance purchasing cooperatives, and taxcredit or subsidy programs—are especially relevant to ruralfirms and workers.In addition to the lower coverage rates among rural workers,the bad news in these findings is that the factors affectingthese low coverage rates—firm size and wage levels—arenot easily amenable to policy solution. To date, policyefforts and demonstrations have not been effective in ex-panding coverage rates in the small business market. Al-though states and private sector groups continue to pursuegroup purchasing strategies for making health insurancemore affordable for small firms, few of these initiativeshave targeted rural firms. Recent reports on state and federalreform of the small group and individual insurance marketssuggest that these policies are not likely to expand coverageamong workers in small firms. The recently passed and soonto be implemented Child Health Insurance Program (CHIP),will extend health insurance coverage for lower incomefamilies whose employers do not offer coverage or whocannot afford to purchase the coverage that is extended tothem. Monitoring the effects of these expansions on insur-ance coverage rates in rural areas will be important todetermine whether and to what extent CHIP can reduce thesignificant disadvantage that rural workers in small firmsand their families face in obtaining employer-based healthinsurance coverage.Andrew F. Coburn, PhD, Elizabeth H. Kilbreth, PhD, Universityof Southern Maine and Stephen H. Long, PhD, M. Susan Marquis,PhD, RANDEmployer-based Health Insurance Coverage of Workers:Are Rural Firms and Workers Different?This study was funded by a grant from the Federal Office of Rural Health Policy, Health Resources and Services Administration, DHHS (CooperativeAgreement # CSUR00003-02-0). The survey on which the study is based was funded by a grant from the Robert Wood Johnson Foundation to RAND.The conclusions and opinions expressed in the paper are the authors’ and no endorsement by the University of Southern Maine, RAND, or the fundingsource is intended or should be inferred. Working Paper # 13, Employer-based Health Insurance Coverage of Workers: Are Rural Firms and WorkersDifferent? describes the policy and research background, methods and findings in depth, and is available from the Maine Rural Health ResearchCenter.

Employer-based Health Insurance Coverage of Workers: Are Rural Firms and Workers Different?

https://digitalcommons.usm.maine.edu/cgi/viewcontent.cgi?article=1085&context=insurance

Employer-based Health Insurance Coverage of Workers: Are Rural Firms and Workers Different?

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