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United States Small Business Administration 
Office of Advocacy 
RS 146_______________________________________________________________________________________________







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Purpose

Growing dissatisfaction with current methods of financing health
care and increasing concern about the size of the uninsured population
have led to proposals for substantial revisions to the health
care system. Many of these proposals could have differential impacts
on small businesses. Measuring firm size differences in health
insurance coverage is an important part of assessing the effects
of health care reform on small business.

The objective of this study was to estimate the extent of health
insurance coverage - and, conversely, non-coverage - among the
U.S. population, with a focus on analyzing the uninsured by firm
size and employment status.

This study: (1) evaluates alternative data sources that can be
used to produce estimates of the number of the uninsured by firm
size, and (2) focuses on the March Current Population Surveys
from 1988 to 1992 to obtain estimates of the insured and uninsured
by firm size and economic and demographic characteristics.

Scope and Methodology

Two major data sources, the Current Population Survey (CPS) and
the Survey of Income and Program Participation (SIPP), are appropriate
for estimating the number and extent of the uninsured by employment
status and firm size. Both are available from the U.S. Department
of Commerce, Bureau of the Census.

Overall, the CPS is better suited for a detailed analysis of the
uninsured because it is a larger sample and is available on an
annual basis - i.e., the March CPS. In the March CPS, the health
insurance questions determine whether an individual has had coverage
from various sources at any time during the previous year. In
addition, the March CPS has included firm size information since
1988, permitting estimates of insurance coverage by firm size
and employment status over an extended period.

The March CPS also contains demographic information such as age,
gender, race, marital status, education attainment and family
structure. Economic and labor force data include industry, occupation,
class of worker, work experience and income.

The study examined the sources of health insurance coverage including
direct employer-provided coverage, coverage by other's employer
and non-employer coverage. The study also analyzed the size of
firm from which individuals received indirect coverage, i.e.,
coverage from a family member's employer.

Highlights

Between 1988 and 1992 the number of uninsured in the United States
increased from 31.0 million to 35.5 million people. In 1992, almost
21 million (about 60 percent) of the uninsured were working. Also
in 1992, 16.4 percent of private, non-agricultural wage-and-salary
workers lacked health insurance.

- Workers in small firms are significantly more likely to be
uninsured than workers in large firms. In 1992, 25.9 percent of
private, non-agricultural wage-and-salary workers in firms with
fewer than 25 employees lacked some form of health insurance,
compared with 10.3 percent of workers in firms with 500 or more
employees. Between 1988 and 1992 the proportion of uninsured increased
across all firm sizes.
- The unincorporated self-employed are less likely to have health
insurance than are the incorporated self-employed. In 1992, 23.9
percent of the unincorporated self-employed lacked health insurance
coverage from any source, compared with 9.1 percent of the incorporated
self-employed.
- Apart from covering 7.3 million of their own workers, firms
with fewer than 25 employees were the source of health insurance
for 9.3 million persons in 1992, for a total of 16.6 million persons.
Apart from covering their own workers, firms with 500 or more
employees were the source of health insurance for 35.4 million
persons, for a total of 63.1 million persons.
- The rate of health insurance coverage varies across the population.
In 1992, workers who were aged 45 to 64 years, white, non-Hispanic,
married and with high education levels were more likely to have
insurance provided by their employer. Women were more likely than
men to be covered by health insurance from any source, while the
opposite was true for employer-provided insurance.

Ordering Information

The complete report is available from:

National Technical Information Service
U.S. Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
(703) 487-4650
(703) 487-4639 (TDD)

Order Number: PB94-195153

Cost: Pending
*Last Modified 6-11-01