The Geography of Employer-Sponsored Health Insurance

Health care utilization and prices vary geographically. Much of this evidence comes from data on Medicare beneficiaries. Recent research by Cooper, Craig, Gaynor, and Van Reenen (2015), however, suggests that the price of care through private insurance diverges from the established geographical patterns of Medicare. Most privately insured individuals obtain insurance through their employers. In this paper I examine the geography of employer-sponsored health insurance using comprehensive data on health benefits plans from 1999 to 2015. All firms with health plans must file IRS Form 5500 if they offer a welfare benefit plan with more than 100 participants. I document significant geographic variation within and across the 306 U.S. Hospital Referral Regions (HRRs) in number of employers sponsoring a health plan, health plan participants, type of firm sponsor (multiemployer vs single employer), funding and benefit arrangements (self-funding vs insurance), and plans subject to collective bargaining at the specific health plan level and at the employer level. Moreover, the correlation between number of active employer-sponsored health plan participants and Medicare enrollees per HRR is only 0.22, suggesting distinct differences in the covered populations. Understanding the variation in employer-sponsored health insurance contributes to the literature because the structure and characteristics of employer-sponsored health insurance will impact the drivers of health care use and prices.