Most State Governments Offer Choice of Health Plans, But Do Not Standardize Benefit Packages Survey Finds

Health insurance purchasing cooperatives: Analysis of data on prototypes

In light of the interest in health insurance purchasing cooperatives (HPICs) as part of President Clinton's health reform plan, a team of researchers at the University of Minnesota School of Public Health, Minneapolis, conducted a mail and telephone survey of 500 public-sector employers to inventory their health plan purchasing practices and estimate the effect of those practices on premiums.

This information could assist policymakers as they designed and implemented HIPCs under a reformed health system. The project took place between 1993 and 1995.

This project was part of the Robert Wood Johnson Foundation (RWJF) national program Changes in Health Care Financing and Organization (HCFO).

Key Findings

  • The researchers found that:

    • The vast majority of state governments:
      • Offer a choice of employee health plans.
      • Hold open enrollment periods.
      • Provide employees with information on competing health plans.
    • City and county government do well in providing employees with information on competing health plans.
    • Price competition among health plans is diminished when employees are allowed to use pre-tax dollars to pay premiums.