Tag Archives: health insurance

Paid Sick Leave Lowers Costs

An Upshot column “The High Costs of Not Offering Paid Sick Leave” argues that employees and their co-workers may be better off with an incentive to take time off when sick. About 45 percent of the American work force does not have paid sick leave; that’s about 50 million workers. Families with less ability to afford unpaid time off are more likely to lack paid sick leave. According to a study in Health Affairs, 65 percent of families with incomes below $35,000 had no paid sick leave, while the same was true of only 25 percent of families with annual incomes above $100,000. Those without sick leave were farm ore likely to go to work sick (“presenteeism”), as well as to forgo seeking medical care for themselves or for an ill family member. Although expanding health insurance helps people pay for health care, it does nothing to help them afford to take time off to get it.

Another study in Health Services Research by a Cornell economist supports the theory that paid sick leave could reduce the spread of contagion. This study found that each week, up to 3 million U.S. employees go to work sick. Females, low-income earners, and those aged 25 to 34 years have a significantly elevated risk of presenteeism behavior.

The Upshot column presents the benefits of paid sick leave for one illness, flu, although morbidity and mortality from other contagious conditions would also be reduced:

Paid sick leave slows the spread of disease. Cities and states that require employers to offer paid sick leave — Washington, D.C.; Seattle; New York City; and Philadelphia, as well as Connecticut, California, Massachusetts and Oregon — have fewer cases of seasonal flu than other comparable cities and states. Flu rates would fall 5 percent if paid sick leave were universal. According to one estimate, an additional seven million people contracted the H1N1 flu virus in 2009 because employees came to work while infected. The illnesses led to 1,500 additional deaths.

Beyond reducing flu deaths, paid sick leave is associated with

Though a few cities and states mentioned above mandate employers provide paid sick leave, the Family and Medical Leave Act requires only unpaid sick leave be provided by employers with more than 50 workers. A new Obama administration rule is extending paid sick leave to ~300,000 private-sector employees working on government contracts starting on Jan. 1.  Policy makers should consider the potential public health implications of their decisions when contemplating guaranteed sick leave benefits.


Obamacare Succeeds in Expanding Insurance Coverage

Amidst news of the increasing premiums and decreasing choice of plans in some healthcare markets, the New York TimesUpshot column brings us this visual display of the impressive and varied impact of Obamacare on insurance coverage rates from 2013-2016. States that decided to expand their Medicaid programs saw much larger declines in their uninsured rates compared with those that didn’t. The proposed mechanisms for this effect were that Medicaid expansion

  • provided a new coverage option for childless adults below or near the poverty line
  • helped spur many people who were already eligible for the program to sign up
  • boosted enrollment in Obamacare’s marketplace plans.

The column analyzed the difference in insurance coverage expansion between states that did and did not take the Medicaid expansion:


The difference between the parties’ health care proposals boils down to how they distribute risk

In a Health Affairs blog post today, two Urban Institute scholars–economist Linda Blumberg and policy fellow John Holahan–state that the fundamental difference between the two parties’ health care proposals is how they propose to share health care expenditures between those currently healthy and those with costly health care needs.

The health policies of the two political parties and their presidential candidates differentiate themselves clearly along the lines of pooling philosophies: the Democrats generally advocate broad-based pooling of health care risk and the Republicans generally advocate more individual responsibility and are willing to accept much greater segmentation of health care risk.

The authors go through the proposals that each party tends to favor, showing that those policies favored by Democrats tend to increase risk-pooling, spreading the risks broadly, as illustrated by key components of the Affordable Care Act.  Approaches favored by Democrats include use of deductibles, co-payments, co-insurance and limits to benefits (so that all individuals experience some risk). In general, these policies increase the financial burdens on the healthy to the benefit of those with costlier health care needs.

Republican proposals decrease risk-pooling (or increase risk-segmenting), placing  health care costs more heavily on those with costlier health care needs. Some of their proposals would pool risk for high catastrophic expenses; others would not. Their approach benefits those who are currently healthy–who significantly outnumber the unhealthy—so their policies have broad short term appeal. But these approaches financially burden those with costlier health care needs, and they “discount the value to the currently healthy of having affordable access to adequate care when and if they develop health problems in the future.”

Health care expenditures are heavily concentrated in a small share of the population: of those not covered by Medicare (below age 65), half of spending is done by about 5% of the population. The low risk (lowest spending) half of the population accounts for about 3.5% of the country’s annual health care expenditures. Screen Shot 2016-03-15 at 9.42.25 AM

The authors conclude:

Risk pooling approaches promote broad access to affordable medical care regardless of income or health status, while the risk segmenting approaches do not and would in fact reduce access relative to current law. Advocates of the latter generally employ terms such as individual responsibility, skin in the game, consumer choice, and market competition, but make no mistake about it: it is all about the risk pool.

The Experts Were Wrong About the Best Places for Better and Cheaper Health Care

A post in the New York Times’ Upshot column today focuses on a study that overturns the conventional wisdom that regions with low Medicare spending per capita have low overall healthcare spending. The study found that places that spend less on Medicare do not necessarily spend less on health care over all.

Based on findings of regional variation in Medicare spending, the Affordable Care Act encourages mergers among hospitals. The resulting larger, integrated hospital systems can often spend less money in Medicare, by avoiding duplicative treatments. But such systems also reduce local competition, and thus can set higher prices in private markets.

The regional variation in prices insurance companies pay for medical care are a major determinant of whether regional costs are higher or lower for private insurance.

The post also shows relative Medicare and private insurance spending in your location. Atul Gawande also covered this study in the New Yorker.