This project focuses on health insurance in the employed population. Three major topics are addressed: (1) the employee's choice of health plans in firms offering more than one plan; (2) comparisons of expenditures, utilization of services and premiums in prepaid vs. fee-for-service health plans; and (3) analysis of attitudinal data regarding health care costs and changes in the health benefit in firms. The primary data set is a survey of 12,000 employees in 23 Twin Cities firms. The employee survey is supplemented by four years of verified data on health benefits in participating firms. Most of the firms in the sample offer several health plans to their employees, and many offer more than one prepaid plan. Several important policy questions are addressed in the research. The extent of self-selection (adverse selection) into health plans is examined in the choice-of-plan analysis. The ability of prepaid plans to reduce expenditures and utilization of services and the resultant effect on premiums are examined in the comparative plan analyses. The final analysis examines the receptivity of the employed population to changes in coverage, health expense accounts, preferred provider organizations, and other cost containment strategies.
