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Health Care Costs and Financing

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Health plan choice is associated with increased enrollment in employer-based coverage

When employers offer employees a choice of health plans, more employees purchase health insurance and are satisfied that their family's health care needs are being met, finds a recent study. Health plan choice may allow people to obtain an insurance plan with the characteristics they value. For example, people may be able to optimize their coverage for specific types of benefits or obtain access to particular providers or cost-sharing arrangements. If this is so, then it makes sense that plan choice might improve satisfaction with and access to health care, as well as higher insurance take-up rates, explain Barbara Steinberg Schone, Ph.D., and Philip F. Cooper, Ph.D., of the Center for Cost and Financing Studies, Agency for Healthcare Research and Quality.

Drs. Schone and Cooper analyzed data from the 1996 Medical Expenditure Panel Survey (MEPS), a nationally representative sample of wage earners, to examine whether workers had access to more than one health insurance plan, either through their employer or through a family member's employer. They correlated health plan choice with health insurance coverage, access to care (having a usual source of care), and satisfaction that family health care needs were being met. Overall, 55 percent of workers were offered a choice of health plans in 1996; about 26 percent of these workers had a choice through a family member's employment.

The likelihood of having a usual source of care was highest among workers with a choice of plans (83 percent), lowest for workers without access to employment-based coverage (67 percent), and at 77 percent for those offered one plan. Eighty percent of workers offered a choice of plans were very satisfied that their family's health care needs were being met, compared with 76 percent of those who were offered one plan and 63 percent of those who were not offered insurance. Finally, workers with private insurance coverage and a choice of plans were significantly more likely than workers with access to only one plan to be enrolled in an HMO (69 vs. 47 percent). Insurance purchasing pools or tax incentives to firms that offer multiple plans may be ways to improve plan choice, note Drs. Schone and Cooper.

See "Assessing the impact of health plan choice," by Drs. Schone and Cooper, in the January 2001 Health Affairs 20(1), pp. 267-275.

Reprints (AHRQ Publication No. 01-R040) are available from the AHRQ Publications Clearinghouse.

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