How do health insurance loading fees vary by group size? Implications for Healthcare reform

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16 Citations (Scopus)

Abstract

The health insurance loading fee represents the portion of the premium above the expected amount of medical care expenditures paid by the insurance company. The size of the loading fees and how they vary by employer group size have important implications for health policy given the recent passage of the Patient Protection and Affordable Care Act. Despite their policy relevance, there is surprisingly little empirical evidence on the magnitude and the determinants of health insurance loading fees. This paper provides estimates of the loading fees by firm size using data from the confidential Medical Expenditure Panel Survey Household Component-Insurance Component Linked File. Overall, we find an inverse relationship between employer group size and loading fees. Firms of up to 100 employees face similar loading fees of approximately 34%. Loads decline with firm size and are estimated to be on average 15% for firms with more than 100 employees, but less than 10,000 employees, and 4% for firms with more than 10,000 workers.

Original languageEnglish (US)
Pages (from-to)181-207
Number of pages27
JournalInternational journal of health care finance and economics
Volume11
Issue number3
DOIs
StatePublished - Sep 1 2011

Fingerprint

group size
Health Care Reform
Fees and Charges
Health Insurance
health insurance
fee
reform
firm
employee
Health Expenditures
Insurance
employer
expenditures
insurance company
household survey
Health Policy
premium
health policy
medical care
insurance

Keywords

  • Employer sponsored insurance
  • Health insurance
  • Loading fee

Cite this

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abstract = "The health insurance loading fee represents the portion of the premium above the expected amount of medical care expenditures paid by the insurance company. The size of the loading fees and how they vary by employer group size have important implications for health policy given the recent passage of the Patient Protection and Affordable Care Act. Despite their policy relevance, there is surprisingly little empirical evidence on the magnitude and the determinants of health insurance loading fees. This paper provides estimates of the loading fees by firm size using data from the confidential Medical Expenditure Panel Survey Household Component-Insurance Component Linked File. Overall, we find an inverse relationship between employer group size and loading fees. Firms of up to 100 employees face similar loading fees of approximately 34{\%}. Loads decline with firm size and are estimated to be on average 15{\%} for firms with more than 100 employees, but less than 10,000 employees, and 4{\%} for firms with more than 10,000 workers.",
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