Trends and Indicators in the Changing Health Care Marketplace Section 2: Trends in Health Insurance Enrollment
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Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.1: Trends in Health Coverage for the Nonelderly Population, 2002 and 2003
The percent of the nonelderly population without insurance rose from 17.3% in 2002 to 17.7% in 2003 (or 44.7 million uninsured), an increase of 1.4 million over 2002. The proportion of Americans with employer-based insurance declined from 63.3% in 2002 to 61.9% in 2003.
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Notes: Medicaid/Other Public includes the State Children’s Health Insurance Program, other state programs, Medicare, and military-related coverage. Medicare and military coverage represent 2% of health coverage among the nonelderly.
Source: Kaiser Family Foundation, Health Insurance Coverage in America, 2003 Data Update, November 2004, Table 1, p.28, at http://www.kff.org/uninsured/7153.cfm, prepared by the Kaiser Commission on Medicaid and the Uninsured, and the Urban Institute using data from the Census Bureau’s March Supplements to the Current Population Survey.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 02/02/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.2: Eligibility, Take-Up Rates, and Coverage in Firms Offering Health Benefits, 2005
Most Americans with health insurance have coverage through employer-sponsored health plans. In firms that offer coverage, 80% of workers were eligible for health benefits offered by their employer in 2005, and 83% of these workers participated in their employers’ plans, with the result that 66% of workers in firms that offer health benefits were covered by their employers’ health benefits plan in 2005.
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Notes: Take-up rate is the percentage of eligible workers who choose to participate in health benefits offered by their employer.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/27/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.3: Health Plan Enrollment for Covered Workers, by Plan Type, 1988-2005
The increase in enrollment in managed care plans (including HMOs, PPOs, and POS plans) has been dramatic, rising from 27% of workers covered by employer plans in 1988 to 97% in 2005. PPO enrollment increased from 11% to 61% of covered workers from 1988 to 2005; HMO enrollment increased from 16% in 1988 to 31% in 1996, but has since declined to 21% in 2005. Conventional Fee-For-Service enrollment has declined from 73% of total enrollment in 1988 to 3% in 2005.
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*Distribution is statistically different from the previous year shown at p<.05. No statistical tests were conducted for years prior to 1999. ^Information was not obtained for POS plans in 1988.
Note: A portion of the change in enrollment for 2005 is likely attributable to incorporating more recent Census Bureau estimates of the number of state and local government workers and removing federal workers from the weights.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2005; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996, 1998; The Health Insurance Association of America (HIAA), 1988. From Exhibit 5.1, at http://www.kff.org/insurance/7315/sections/ehbs05-5-1.cfm.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/27/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.4: Percentage of Firms Offering Health Benefits, by Firm Size, 1996-2005
Although nearly all large firms (200 or more workers) offer health benefits (98%), firms with fewer than 200 workers are significantly less likely to do so (59%). Since 2000, the percentage of small firms (3-199 workers) offering health benefits has dropped by 9 percentage points. While the year-to-year changes have been relatively small and not statistically significant, the cumulative effect has been a large and statistically significant change over this five-year period. This change is driven largely by a decrease in the percentage of small firms offering coverage, and may reflect several years of high premium growth combined with a sluggish job market.
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*Estimate is statistically different from the previous year shown at p<.05. †Estimate is statistically different from the previous year shown at p<.10.
Note: The percentage of all large firms (200 or more workers) offering health benefits in 1999 was 99%, not 100% as reported last year. Data prior to 1999 do not reflect several methodological changes that were made to the survey, including standardizing survey weights to U.S. Census data.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/26/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.5: Percentage of Firms Offering Health Benefits to Part-Time and Temporary Workers, by Firm Size, 1999-2005
There has been little change in the percentage of firms offering health benefits to part-time workers and temporary workers since 1999. More than one quarter (28%) of all firms offered part-time workers health coverage and nearly one in twenty (3%) offered health benefits to temporary workers in 2005.
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Notes: Tests found no statistically different estimates from the previous year shown at p<.05.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/26/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.6: Percentage of Employers Providing a Choice of Health Plans, by Firm Size, 2005
Larger firms (200 or more workers) are much more likely to offer employees a choice of health plans than are smaller firms. Only 19% of all small employers offered a choice of plans in 2005, compared to 73% of large employers and 83% of jumbo firms. However, larger companies employed a larger share of workers than did smaller firms. Thus, while only 20% of all firms offered a choice of plans in 2005, 63% of covered workers could select among multiple plans.
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*Distribution is statistically different from All Firms at p<.05.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/26/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.7: Percentage of All Large Firms (200 or More Workers) Offering Retiree Health Benefits‡, 1988-2005
The percentage of firms offering retiree coverage has declined significantly over time, although there has been no significant change since 1993. Sixty-six percent of all large firms (with 200 or more workers) offered retiree coverage in 1988, compared with 33% in 2005.
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‡Among firms that offer health benefits to active workers.
Note: Tests found no statistically different estimates from the previous year shown at p<.05. No statistical tests were conducted for years prior to 1999.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2005; KPMG Survey of Employer-Sponsored Health Benefits, 1991, 1993, 1995, 1998; The Health Insurance Association of America (HIAA), 1988. From Exhibit 11.1, at http://www.kff.org/insurance/7315/sections/ehbs05-11-1.cfm.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/26/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.8: Average Increase in Total Retiree Health Costs, by Firm Size, 2001-2004
The total cost of retiree health care (firm and participant contributions) in large firms that offer retiree benefits rose by 13% on average in 2003, a slower growth rate than the 16% cost increase in 2001.
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Notes: Based on responses from private-sector firms with 1,000 or more employees that offer retiree health benefits.
Source: Kaiser Family Foundation/Hewitt Associates, Current Trends and Future Outlook for Retiree Health Benefits: Findings from the Kaiser/Hewitt 2004 Survey on Retiree Health Benefits, December 2004, Exhibit 5, at http://www.kff.org/medicare/7194/retiree_ben_sec2.cfm.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.9: Average Annual Weighted Increase in Retiree Contributions for New Retirees, 2001-2004
The retiree share of retiree health coverage premiums for new retirees has risen rapidly in the recent past. Early (pre-age 65) retirees experienced a 27% increase from 2003 to 2004, while Medicare-age retirees experienced a 24% increase. Contribution levels for retirees in the same firm often vary based on such factors as when they retired, years of service with the employers, and job classification.
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Notes: Based on responses from private-sector firms with 1,000 or more employees that offer retiree health benefits. Average increase was weighted by the number of retirees in the employer's largest plan and by the employer size. Premiums for retiree-only coverage for full-time employees retiring in 2002, 2003, and 2004, in plans with the largest number of enrolled retirees.
Source: Kaiser Family Foundation/Hewitt Associates, Current Trends and Future Outlook for Retiree Health Benefits: Findings from the Kaiser/Hewitt 2004 Survey on Retiree Health Benefits, December 2004, Exhibit 10, at http://www.kff.org/medicare/7194/retiree_ben_sec3.cfm.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.10: Percentage of Large Private-Sector Employers Having a Cap on Their Firm’s Contribution to Retiree Health Benefits, 2004
In response to the rising cost of retiree health benefits and to a change in accounting standards (in the early 1990s) that required firms to include the unfunded value of future retiree health benefits as a liability on their balance sheets, many firms established limits, or caps, on the amount of their future obligations toward retiree health costs. Of large firms that offer retiree health benefits, about one-half (54%) have a cap on their future liability for these benefits. Of the firms with caps, about 30% report that they have only one plan with a cap, and another 70% of these firms report that they have more than one plan with a cap.
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Notes: Based on responses from private-sector firms with 1,000 or more employees that offer retiree health benefits.
Source: Kaiser Family Foundation/Hewitt Associates, Current Trends and Future Outlook for Retiree Health Benefits: Findings from the Kaiser/Hewitt 2004 Survey on Retiree Health Benefits, December 2004, Exhibit 6, at http://www.kff.org/medicare/7194/retiree_ben_sec2.cfm.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
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Exhibit 2.11: Percentage of Large Private-Sector Employers Having a Cap on Their Firm’s Contribution to Retiree Health Benefits for Pre-65 and 65+ Retirees in Their Largest Plan, Among Firms with Caps, 2004
Of large firms that offer retiree health benefits to pre-65 retirees, 84% have a cap on their largest plan for their future liability of these benefits. In these firms, about 53% report that they have already hit the cap (which means that beneficiaries are responsible for funding much or all future cost increases unless the firm adjusts the cap), and another 28% of these firms estimate that they will hit their cap within one to three years. The picture is similar for retiree benefits offered to 65+ retirees, where 89% of firms with a cap report they have a cap on their largest plan. In these firms, 56% report that they have already hit the cap, and another 27% of these firms estimate that they will hit their cap within one to three years.
Percentage of Large Private-Sector Employers Having a Cap on Their Firm’s Contribution to Retiree Health Benefits for Pre-65 Retirees in Their Largest Plan, Among Firms with Caps, 2004
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Percentage of Large Private-Sector Employers Having a Cap on Their Firm’s Contribution to Retiree Health Benefits for 65+ Retirees in Their Largest Plan, Among Firms with Caps, 2004
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Notes: Based on responses from private-sector firms with 1,000 or more employees that offer retiree health benefits.
Source: Kaiser Family Foundation/Hewitt Associates, Current Trends and Future Outlook for Retiree Health Benefits: Findings from the Kaiser/Hewitt 2004 Survey on Retiree Health Benefits, December 2004, Exhibits 7 and 8, at http://www.kff.org/medicare/7194/retiree_ben_sec2.cfm.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.12: Percentage of Large Private-Sector Employers Making Changes to Retiree Health Coverage in the Past Year, 2004
Rapid increases in the cost for retiree health coverage have led employers to increase retiree premium contributions and cost sharing. In some cases where firms have capped their future liability toward retiree health care costs (see Exhibits 2.10 and 2.11), firms may increase cost sharing as a way of keeping contribution levels more affordable for retirees, who pay for most or all of retiree benefit cost increases.
Percentage of Large Private-Sector Employers Making Changes to Retiree Health Benefits in the Past Year, 2004
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Percentage of Large Private-Sector Employers Making Changes to Retiree Contributions or Cost-Sharing for Retiree Health Benefits in the Past Year, 2004
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Notes: Based on responses from private-sector firms with 1,000 or more employees that offer retiree health benefits.
Source: Kaiser Family Foundation/Hewitt Associates, Current Trends and Future Outlook for Retiree Health Benefits: Findings from the Kaiser/Hewitt 2004 Survey on Retiree Health Benefits, December 2004, Exhibits 23 and 24, at http://www.kff.org/medicare/7194/retiree_ben_sec5.cfm.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.13: Number and Distribution of HMO Enrollment, by Model Type, 1984-2004
Most HMO enrollees were in Mixed model (44%) or IPA model (33%) HMOs in 2004. Enrollment in Mixed model and IPA plans grew rapidly before 2000 and then leveled off. Meanwhile, the proportion of enrollment in Group model and Staff model HMO plans (11% and 0.3%, respectively, in 2004) has declined substantially since 1984.
Enrollees (in millions)
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Notes: HMO enrollment includes enrollees in both traditional HMOs and point-of-service (POS) plans through: group/commercial plans, Medicare, Medicaid, the Federal Employees Health Benefits Program, direct pay plans, and unidentified HMO products. Percentages may not add to 100% due to rounding. Data are as of June 30 or July 1 of respective year. See “Health Maintenance Organization” in Glossary for definitions of model types (Mixed, IPA, Network, Group, and Staff).
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 2.5, p.20, at http://www.kff.org/insurance/3161-index.cfm, based on July 1 data from InterStudy Publications, updated with data from HealthLeaders-InterStudy, The Competitive Edge, Spring 2005, Part II: Managed Care Industry Report, June 2005, Table 7, p.30.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 03/15/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 2.14: State HMO Penetration, 2004
HMO penetration – the percent of a state’s population enrolled in an HMO – varied strikingly across states in 2004, ranging from a low of less than 2% in Alaska (0%), Mississippi (0.1%), and North Dakota (0.3%), to highs of 47.8% in California, 37.0% in Connecticut, and 36.8% in Massachusetts. The total U.S. HMO penetration rate was 23.0% in 2004.
State
State Penetration
State
State Penetration
Alabama
2.2%
Montana
8.8%
Alaska
0.0%
Nebraska
5.8%
Arizona
14.9%
Nevada
24.4%
Arkansas
4.5%
New Hampshire
14.3%
California
47.8%
New Jersey
23.4%
Colorado
25.9%
New Mexico
29.5%
Connecticut
37.0%
New York
27.1%
Delaware
13.9%
North Carolina
7.5%
District of Columbia*
165.5%
North Dakota
0.3%
Florida
23.8%
Ohio
15.5%
Georgia
12.9%
Oklahoma
7.3%
Hawaii
29.6%
Oregon
19.5%
Idaho
2.8%
Pennsylvania
32.0%
Illinois
14.6%
Rhode Island
31.1%
Indiana
11.1%
South Carolina
5.4%
Iowa
9.0%
South Dakota
9.8%
Kansas
6.8%
Tennessee
11.8%
Kentucky
10.5%
Texas
9.4%
Louisiana
10.1%
Utah
26.5%
Maine
18.6%
Vermont
9.7%
Maryland
24.2%
Virginia
12.9%
Massachusetts
36.8%
Washington
13.6%
Michigan
26.8%
West Virginia
10.0%
Minnesota
26.3%
Wisconsin
28.2%
Mississippi
0.1%
Wyoming
2.0%
Missouri
24.5%
Notes: HMO enrollment includes enrollees in both traditional HMOs and point-of-service (POS) plans through: group/commercial plans, Medicare, Medicaid, the Federal Employees Health Benefits Program, direct pay plans, and unidentified HMO products. State penetration was calculated by InterStudy using state population from the U.S. Census Bureau as of July, 2004. *District of Columbia plans' lives include lives for surrounding states.
Source: HealthLeaders-Interstudy, The Competitive Edge, Spring 2005, Part II: Managed Care Industry Report, June 2005, Table 12, p.42 (state data) and Figure 9, p.47 (total U.S. data), using data as of July 1, 2004.
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Exhibit 2.15: HMO Penetration in the 10 Largest Metropolitan Areas, 2002
While higher in urban markets than in rural markets, HMO penetration in the country’s most populated metropolitan areas still varies considerably, from a high of 54% in the Los Angeles–Long Beach area to a low of 14% in Houston.
City
Estimated HMO Penetration
Estimated HMO Enrollment
Estimated Population
Los Angeles–Long Beach, CA
53.8%
5,184,513
9,637,494
Philadelphia, PA–NJ
41.5%
2,122,517
5,116,830
Boston, MA
41.2%
1,407,068
3,411,591
Washington, DC–MD–VA–WV
29.8%
1,505,137
5,053,594
Detroit, MI
28.0%
1,246,554
4,448,235
New York, NY
27.6%
2,575,049
9,333,651
Atlanta, GA
25.0%
1,067,337
4,262,584
Dallas, TX
23.4%
854,526
3,646,217
Chicago, IL
19.0%
1,587,286
8,342,190
Houston, TX
13.7%
587,303
4,290,277
Notes: HMO enrollment includes enrollees in both traditional HMOs and Point-of-Service (POS) plans through: group/commercial plans, Medicare, Medicaid, the Federal Employees Health Benefits Program, direct pay plans, supplemental Medicare plans, and unidentified HMO products. State penetration was calculated by InterStudy using state population from the Census Bureau as of July 1, 2001.
Source: Kaiser Family Foundation analysis using InterStudy Publications, The InterStudy Competitive Edge 12.2, Part III: Regional Market Analysis, November 2002, pp.42-105, using data as of January 1, 2002.
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Exhibit 2.16: Medicaid Managed Care and Traditional Enrollment, 1990-2004
Medicaid managed care grew rapidly in the 1990s, with the proportion of Medicaid enrollees in managed care increasing from 9% in 1990 to over half (61%) of the Medicaid population in 2004.
Enrollment (in millions)
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1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Percent of Enrollees Enrolled in Traditional Medicaid Programs
91%
90%
88%
86%
77%
71%
60%
52%
46%
44%
44%
43%
42%
41%
39%
Percent of Enrollees Enrolled in Medicaid Managed Care
9%
10%
12%
14%
23%
29%
40%
48%
54%
56%
56%
57%
58%
59%
61%
Notes: Numbers may not produce totals because of rounding. These figures represent point-in-time enrollment as of June 30 of each reporting year. Total Medicaid enrollment for 1996-2004 was collected by states at the same time the managed care enrollment numbers were collected, instead of using the CMS 2082 Medicaid data reporting system as in previous years. The unduplicated managed care enrollment data include enrollees receiving comprehensive benefits and limited benefits. This table also provides unduplicated national figures for the Total Medicaid population and Other population. The statistics also include individuals enrolled in State health care reform programs that expand eligibility beyond traditional Medicaid eligibility standards.
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Exhibit 2.17: Enrollment in Medicare Managed Care and Traditional Medicare, 1990-2004
Of the nation's 41.7 million Medicare enrollees in 2004, 4.7 million (11%) were enrolled in managed care plans. Participation in Medicare managed care increased steadily in the 1990s, reaching a peak of 6.3 million beneficiaries (16%) in 2000. Enrollment declined between 2000 and 2003 due to plan withdrawals from some areas, reduced benefits, and higher premiums. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003, enacted December 8, 2003, increased Medicare payments to private managed care plans (now called Medicare Advantage). Medicare Advantage plans used increased payments to raise payments to providers, lower enrollee premiums, enhance existing benefits, and increase stabilization funds. Enrollment in Medicare Advantage plans rose slightly from 2003 to 2004.
Enrollment (in millions)
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1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Percent of Beneficiaries Enrolled in Traditional Medicare Program
96%
96%
96%
95%
94%
92%
89%
86%
84%
84%
84%
86%
88%
89%
89%
Percent of Beneficiaries Enrolled in Medicare Managed Care
4%
4%
4%
5%
6%
8%
11%
14%
16%
16%
16%
14%
12%
11%
11%
Source: Kaiser Family Foundation calculations using data from the Centers for Medicare and Medicaid Services, Medicare Managed Care Contract Plans Monthly Summary Reports for December 1 of each year, at http://www.cms.hhs.gov/healthplans/statistics/mmcc/ (Medicare managed care enrollment), and total Medicare enrollment data from the Centers for Medicare and Medicaid Services, Office of the Actuary, personal communication.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number: 7031