HOW WELL DO WE MEASURE EMPLOYER‐PROVIDED HEALTH INSURANCE COVERAGE?

I. INTRODUCTION Who is covered by health insurance? This is a question that health researchers must answer in many situations. For instance, often the first piece of information that is needed when analyzing the effects of various health care reform policies is the number of workers covered. Similarly, when one wants to know how much is spent by workers and firms on health insurance coverage, the most basic piece of information is the number of workers covered. When analysts face the task of estimating the number of workers covered, they often turn to government surveys that include health-related questions. But as Billheimer and Reischauer (1995) point out, no survey typically has all of the questions needed, and analysts are forced to cobble together answers using data from multiple sources. The error inherent in the estimates obtained is magnified by the use of multiple sources, all with their own unique sources of error. Typically analysts turn to the Current Population Survey to obtain estimates of health insurance coverage of the population (e.g., Billheimer and Reischauer, 1995; Employee Benefit Research Institute, 1993). Calculations based on the March 1993 Current Population Survey indicate that 68.3 million workers have health insurance through their own employer, and another 62.5 million family members get health insurance through employer-sponsored plans. Eighty-six million persons receive health insurance through non-employer sources such as other private insurance, Medicare, Medicaid, or Champus. The remaining 14.7% of the population - or 37.4 million Americans - are uninsured. This is virtually identical to the 37 million estimate used by the Clinton Administration during the period building up to the release of their health care reform act (Wall Street Journal, June 9, 1993) and is close to an estimate released by the Employee Benefit Research Institute of 38.5 million (Employee Benefit Research Institute, 1993). The Clinton Administration bases its estimate on the March CPS among other sources, and the Employee Benefit Research Institute also use the March 1993 CPS. But the March questions are not the only source of health insurance coverage from the CPS. The Employee Benefit Supplement has been included periodically as part of the CPS. It includes a series of questions on employer-provided health insurance for those working at the time of the survey. Because the Employee Benefit Supplement has been given in April or May, there is a large overlap with the March sample given the CPS sampling rotation. (Addresses are sampled for four consecutive months, are then out of the sample for eight months, and are again included for four months.) This overlap means that a large group of households are asked both sets of health insurance questions. But because previous analysts base their estimates on the March survey, there have been no comparisons of employer-provided coverage using the two sets of questions. This paper investigates the extent of agreement or disagreement in health insurance coverage using the two sets of CPS questions. Because the CPS asks two different sets of questions about health insurance coverage to the same set of individuals, it allows an investigation of one source of measurement error in health insurance coverage. It does not, however, allow an examination of how workers' responses compare with health insurance coverage information from employer-provided sources such as personnel records or managers' reports from the worker's place of employment. This type of measurement error is investigated through a survey of employers and employees designed and conducted with funding from the Upjohn Institute for Employment Research. Employers and employees are asked the same set of questions about health insurance coverage, providing two independent sources of information. While there are certain to be some errors in employers' reports of health insurance coverage, they are likely to be measured with far less error than are worker reports. …