Academic journal article Monthly Labor Review

Health Maintenance Organizations: Plan Offerings and Enrollments; While the Availability of HMO's Increased during the 1980's, Workers in Certain Industries and Geographic Areas Were More Likely Than Others to Be Offered the Opportunity to Participate

Academic journal article Monthly Labor Review

Health Maintenance Organizations: Plan Offerings and Enrollments; While the Availability of HMO's Increased during the 1980's, Workers in Certain Industries and Geographic Areas Were More Likely Than Others to Be Offered the Opportunity to Participate

Article excerpt

While the availability of HMO's increased during the 1980's, workers in certain industries and geographic areas were more likely than others to be offered the opportunity to participate

The rising cost of health care has created a dilemma for both employers and employees, encouraging them to search for ways to cut their health care costs. To do this, employers increasingly are sharing the costs of employer-sponsored health insurance with their employees, while employees are turning to health maintenance organization (HMO) plans, which generally require few out-of-pocket expenses beyond plan premiums. Employee participation in HMO plans increased during the 1980's, suggesting an effort on the part of workers and their families to keep their health care costs at a more manageable level.

The number of employees offered an HMO plan by their employer continued to increase in the 1980's, as did the number of employees who chose HMO's as a method of receiving health care. Many of these newly eligible employees were offered plans financed jointly by employers and employees; consequently, the proportion of workers offered wholly employer-financed HMO's declined noticeably.

The growth in HMO plan availability and enrollment is apparent throughout the country, although there are distinct regional and industry differences. For example, between 1984 and 1987, the percent of full-time office employees in finance, insurance, and real estate establishments who were offered an HMO increased by 15 percentage points, while the increase for office workers in manufacturing was 7 percentage points. Likewise, plan offerings to full-time production workers in the South increased between 1984 and 1987, but remained stable in the West. Other industry and regional variations exist in the degree of employee participation in HMO's and in the percentage of workers offered plans fully paid by employers.

These findings are based on data from the Bureau of Labor Statistics' Area Wage Surveys.1 The surveys develop data on occupational wages and employee benefits in a representative cross-section of the Nation's metropolitan areas. Data are collected for workers in six broad industry divisions: manufacturing; transportation, communication, and other public utilities; wholesale trade; retail trade; finance, insurance, and real estate; and selected services.1 (Governments and die construction and mining industries are excluded.)

Two types of data from die Area Wage Surveys are used for this article-the percent of full-time workers offered an HMO plan and the percent of workers participating in such a plan. (The percent of workers participating in HMO's is less than the percent offered such plans for several reasons. In some instances, workers who are offered HMO's are also offered a fee-for-service plan as an alternative form of health care coverage. Some of these workers choose die more traditional form of coverage. Also, employees may decline all forms of coverage that are offered for cost- or provision-related reasons.) From these two Area Wage Survey series, a participation rate has been derived for this study. The participation rate is obtained by dividing the percent of workers participating in HMO plans by the percent offered HMO plans.1 The participation rate series serves as a measure of HMO popularity among those workers able to avail themselves of such plans.

This article presents woo plan developments in all metropolitan areas for the years 1984 through 1987.4 HMO plan offerings, plan financing, and employee participation levels are compared and contrasted across industry and occupational divisions.1 Specific differences in plan availability and enrollment that exist among 28 selected metropolitan areas within the United States,6 as well as within four broad geographic regions-the Northeast, South, Midwest, and West-are also studied.

The scope of the Area Wage Surveys must be kept in mind when analyzing the data. …

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