Why are employer-sponsored health insurance premiums higher in the public sector than in the private sector?
February 2019
Working Paper Number:
CES-19-03
Abstract
In this article, we examine the factors explaining differences in public and private sector health insurance premiums for enrollees with single coverage. We use data from the 2000 and 2014 Medical Expenditure Panel Survey-Insurance Component, along with decomposition methods, to explore the relative explanatory importance of plan features and benefit generosity, such as deductibles and other forms of cost sharing, basic employee characteristics (e.g., age, gender, and education), and unionization. While there was little difference in public and private sector premiums in 2000, by 2014, public premiums had exceeded private premiums by 14 to 19 percent. We find that differences in plan characteristics played a substantial role in explaining premium differences in 2014, but they were not the only, or even the most important, factor. Differences in worker age, gender, marital status, and educational attainment were also important factors, as was workforce unionization.
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:
payroll,
expenditure,
insurance,
fiscal,
welfare,
enrollment,
coverage,
premium,
medicare,
healthcare,
pension,
insured,
health insurance,
benefit,
enrollee,
union,
insurance coverage,
insurance premiums
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Bureau of Labor Statistics,
Ordinary Least Squares,
National Bureau of Economic Research,
Review of Economics and Statistics,
University of Chicago,
Decennial Census,
Medical Expenditure Panel Survey,
Journal of Labor Economics,
Boston College,
Journal of Economic Perspectives,
Department of Labor,
North American Industry Classification System,
American Community Survey,
Agency for Healthcare Research and Quality,
Business Register,
University of Michigan
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