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Health Care Costs and Financing

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Rural workers have less employment-related health insurance for several reasons, including low wages and smaller employers

Rural residents make up a disproportionate number of the Nation's uninsured population. This disparity in health insurance among rural residents is related to the structure of rural employment, notably smaller employers and lower wages, according to Sharon L. Larson, Ph.D., of the Substance Abuse and Mental Health Services Administration, and Steven C. Hill, Ph.D., of the Center for Financing, Access, and Cost Trends, Agency for Healthcare Research and Quality. They found that workers living in the most rural areas are 10.4 percentage points less likely to be offered health insurance than urban workers. In rural counties not adjacent to urban areas, lower wages and smaller employers each accounted for about one-third of the total difference in employment-related health insurance.

The researchers analyzed data from the Medical Expenditure Panel Survey Household Component (1996-1998). They evaluated which characteristics contributed to lack of employment-related insurance among nonelderly adult workers in three types of nonmetropolitan areas—rural counties adjacent to urban areas; large rural nonadjacent counties (a town or city with over 10,000 population); and small rural, nonadjacent counties (no town with more than 10,000 people)—compared with metropolitan workers.

The median hourly wages of workers in rural counties were lower than those of urban workers ($10 in adjacent counties and $9 in large and small nonadjacent counties vs. $12 in urban counties). Workers from the most rural counties were less likely to work full-time and more likely to work part-time. Workers from nonadjacent counties were more likely to be self-employed (15 percent large; 16 percent small) and less likely to be members of a union (10 percent large and small) compared with urban and adjacent residents. Also rural workers were less likely to work in companies with 100 or more employees and more likely to work in companies with 10 or fewer employees.

See "Rural-urban differences in employment-related health insurance," by Drs. Larson and Hill, in the Winter 2005 Journal of Rural Health 21(1), pp. 21-30. Reprints (AHRQ Publication No. 05-R026) are available from the AHRQ Publications Clearinghouse.

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