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Affordable Health Care Redux
 

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Since we're on the subject of health insurance, let's look at one other surprise that Kaiser delivered in its annual report on employer health benefits. As I wrote last week, small firms that didn't offer insurance to their employees cited a variety of reasons, but 79 percent called cost an important factor, while 76 percent said the same of firm size -- their businesses were just "too small."

But it turns out that in aggregate, small firms pay about the same premiums as big firms -- in fact, for family coverage, companies with under 200 employees pay less ($11,835) than firms with 200 or more workers ($12,233). For individual coverage, small firms with three to 1999 workers paid $4,553, while large firms paid $4,442.

Of course, the caveats fly fast and furious here. The figures are so close that Kaiser concludes they are not statistically different from each other. If, though, we take the numbers as true, the main objection is that such broad definitions of small and big can hide vast internal disparities. So I asked Kaiser to give me a more specific breakdown, and an Excel file arrived in my email a few minutes later. Here's what they sent:

Premiumsbyfirmsize3.jpg

Uh-oh, caveats within caveats before we even start. Bianca DiJulio, a Kaiser policy analyst, said that because some sample sizes were so small, the organization didn't have the 95 percent confidence they liked for many of the size categories. And it's possible that the 3-to-24 category obscures its own disparity, since 10 employees seems to be the threshold for offering insurance. (Seventy-six percent of firms with ten to 24 employees offer them insurance, compared to just 45 percent of firms with nine or less.)

Still -- whoa! When it comes to covering single employees, small firms do have a disadvantage -- they pay 12 percent more than the average. It's not true of any other size class, however, and when it comes to providing family coverage (for a hypothetical family of four) the disadvantage disappears altogether.

Of course, equality in premium price doesn't guarantee equality of coverage, and elsewhere in the report Kaiser makes clear that workers at smaller firms pay higher deductibles and share more of the cost for doctor and hospital visits and prescriptions. But that's not a barrier to getting insurance in the first place. "Too small" may be a mindset as much as an economic fact.

Last updated: Sep 28, 2007




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