NCPA - National Center for Policy Analysis

Higher-Wage Firms More Likely To Offer Health Insurance

May 3, 1999

A worker who lacks a high school diploma but is searching for a job that comes with health insurance benefits would be well advised to interview with a firm that employs lots of college grads, according to a study from the Hospital Research and Educational Trust. Firms with a preponderance of high-wage employees are more likely to offer insurance to all workers.

For example, low-wage workers serving hamburgers in a General Motors or Merrill Lynch cafeteria are more likely to have health benefits than their counterparts at McDonald's or Burger King.

  • From 1992 to 1997, the percentage of heads of households with high school diplomas who lacked coverage rose from 26.2 percent to 28.6 percent.
  • But for those with college degrees, the percentage was much lower and barely budged -- to 8.1 percent from 7.8 percent.
  • After taking inflation into account, wages for high school graduates fell 11 percent from 1973 to 1997, while those of college graduates rose 17 percent.
  • The study, which is being published today in the journal Health Affairs, says that the rise in the number of uninsured Americans -- from 38 million in 1992 to 43 million in 1997 -- has touched most segments of the population, but especially the poor.

Employees at high-wage companies studied paid 21 percent of the employers' premiums for individual coverage, compared to 24 percent at low-wage firms. And for family coverage, workers at high-wage firms paid 27 percent of the cost, versus 41 percent for low-wage firms.

Source: Peter T. Kilborn, "Low-Wage Businesses Add to Number of Uninsured Workers," New York Times, May 3, 1999.


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