THE URBAN INSTITUTE How Have Employers Responded to Health Reform in Massachusetts? Evidence from the Perspective of Employees Sharon K. Long Urban Institute Alliance for Health Reform November 7, 2008

THE URBAN INSTITUTE 2 Early Impacts of Health Reform on Individuals in the State Uninsurance among working-age adults reduced by almost half, with no evidence of any crowd-out of ESI coverage Improvements in access to health care Reductions in the costs of health care to consumers Improvements in the financial protection provided by insurance as underinsurance has declined

THE URBAN INSTITUTE 3 Focus of this Study: Employer Responses to Health Reform from the Perspective of their Workers Employers could decide to stop offering coverage or tighten eligibility for coverage Employers could shift more of the costs of coverage onto workers Employers could scale back the scope of coverage that they offer

THE URBAN INSTITUTE 4 Data and Methods Data: Massachusetts Health Reform Survey – Fielded in Fall 2006 and Fall 2007 – Sample sizes ~3000 in each year Sample: Working adults 18 to 64 years old Methods: Compare workers in Fall 2007 to workers in Fall 2006

THE URBAN INSTITUTE 5  No change in the share of workers in firms that offer ESI coverage to any workers Are employers dropping coverage? All workers Firm size < 51 Firm size Firm size > 1000

THE URBAN INSTITUTE 6  No change in the share of workers in firms that offer ESI coverage to them Are employers tightening eligibility for coverage? All workers Firm size < 51 Firm size Firm size > 1000

THE URBAN INSTITUTE 7  No change in the share of part-time and short-tenure workers in firms that offer ESI coverage to them Are employers tightening eligibility for coverage? All workers Part-time worker Worker with job tenure < 1 year

THE URBAN INSTITUTE 8  No significant increase in the share of workers with ESI premiums above $1000/year for single or $3000/year for family coverage Are employers increasing workers’ contributions toward ESI premiums? All workers Firm size < 51 Firm size Firm size > 1000

THE URBAN INSTITUTE 9  No significant increase in the share of workers with ESI premiums above $1500/year for single or $4500/year for family coverage Are employers increasing workers’ contributions toward ESI premiums? * Difference is significantly different from zero All workers Firm size < 51 Firm size Firm size > 1000

THE URBAN INSTITUTE 10  Workers’ rating of range of services, choice of providers and quality of care under ESI plan remained high Are employers reducing the scope of ESI coverage? Rates range of services as very good or excellent Rates choice of providers as very good or excellent Rates quality of care as very good or excellent

THE URBAN INSTITUTE 11  No evidence that ESI plans are covering less of the costs of health care Are employers shifting more of the costs of care onto workers? Expensive medical bills not covered by ESI Doctor charged more than ESI plan paid

THE URBAN INSTITUTE 12  No evidence that workers with ESI coverage are spending substantially more on health care Are employers shifting more of the costs of care onto workers? OOP health care costs $1000 or more/year OOP health care costs $3000 or more/year

THE URBAN INSTITUTE 13 Lessons at the End of One Year ESI coverage continues to provide a foundation for health reform in Massachusetts – Employers are continuing to offer ESI coverage – Employers are not requiring higher contributions toward ESI premiums from their workers – Employees continue to report high levels of satisfaction with their ESI coverage

THE URBAN INSTITUTE 14 Looking to the Future These findings provide early evidence on the response by employers to health reform – Individual mandate not in place at time of 2007 survey – Small firms, in particular, may be slow to adapt to changes in the health care environment New round of the survey is in the field now