Thursday, May 9, 2019

Comparing Employer-Sponsored and State Exchange Health Insurance

This post analyzed data from a government survey to analyze differences in household income of people covered by employer-based insurance and people covered by state exchange insurance.

Question:   How did the family income of holders of employer-sponsored insurance and holders of state exchange insurance differ in April 2014? 

What are the likely impacts of Republican proposals to change tax credits for the purpose of state exchange health insurance? 

Data and Methodology:  The MEPS 2014 consolidated database was used in this analysis.   The distribution of household income for holders of employer-sponsored health insurance (HPEAP14) is compared to distribution of household income for holders of state exchange insurance (HPXAP!4).   The income variable is POVCAT14, with five outcomes – poor, near poor, low-income, mid-income and high-income.  I present estimates of totals for the entire population based on weight PERWT14F.


Results:


Income Category for Holders of Employer Sponsored Health Insurance and State Exchange Insurance
Employer Sponsored Insurance
State Exchange Insurance
POVCAT
# of Policy Holders
% of Policy Holders
# of Policy Holders
% of Policy Holders
Poor
1,695,767
1.99
473,182
13.73
Near Poor
1,448,141
1.70
121,698
3.53
Low Income
6,523,589
7.66
502,303
14.58
Middle Income
26,352,508
30.96
1,339,863
38.88
High Income
49,109,053
57.69
1,008,712
29.27
Total
85,129,058.40
100.00
3,445,760
100.00


Description of Results:


First, observe that employer-sponsored insurance is a much larger segment than state exchange markets.   There is an estimated 85 million holders of employer-based coverage compared to around 3.5 million holders of state-exchange insurance.   (Note the holder of the insurance refers to the person taking out the insurance.   Often other family members are also covered.)

The difference in the household income of people who have employer-sponsored insurance and people who have state exchange insurance is stark.


The portion of people in state exchanges who are poor, near poor, low income, or middle income is higher than corresponding portion for employer based insurance.  

The proportion of holders who are poor is nearly seven times higher for state exchange markets than for employer-based insurance.  

The low-income proportion is nearly twice as high for state exchange markets than for employer-based insurance.

Over 57 percent of the holders of employer-based insurance have high-income defined as income exceeding 400 percent of the federal poverty line.   The corresponding figure is less than 30 percent for state exchange marketplaces?



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