TEXT Table 1. Expenditures for health care in private industry and state and local governments, 1992: Table 2. STANDARD ERRORS TABLE Standard errors,4/ in billions of dollars, associated with estimates Technical contact: USDL: 93-560 Wayne Shelly (202) 606-6199 Media contact: FOR RELEASE: 10 A.M. (EST) Kathryn Hoyle (202) 606-5902 Monday, December 20, 1993 EXPENDITURES FOR HEALTH CARE PLANS BY EMPLOYERS AND EMPLOYEES, 1992 Employers and employees in private industry and state and local governments spent $258.5 billion for health care plans during 1992. Employer expenditures for workplace-based health care plans ($221.4 billion) were nearly six times those of employees ($37.2 billion). These data are from a special survey of expenditures on health care plans conducted by the U.S. Department of Labor's Bureau of Labor Statistics for the Department of Health and Human Services' Health Care Financing Administration. Expenditures included employer and employee costs for health care plans, typically insurance premiums. (See explanatory note below.) Out-of-pocket expenses by health care plan participants, such as co-insurance payments and deductibles, were not included in the survey, nor were employee expenditures for individually-purchased health care plans. Expenditures by industry Expenditures for health care plans in private industry totaled $203.7 billion in 1992--$74.0 billion in goods-producing and $129.7 billion in service-producing industries. (See table 1.) Employer costs made up nearly nine-tenths of total expenditures in goods-producing industries, such as construction and manufacturing. In contrast, the percent of total expenditures paid by employers in service-producing industries ranged from 93 percent in transportation and public utilities to 77 percent in retail trade. Expenditures for health care plans in state and local governments were $54.8 billion in 1992. Employer costs accounted for 85 percent of the total expenditures. Expenditures by size of establishment Expenditures for health care plans in 1992 were $92.2 billion in establishments with fewer than 100 employees, compared with $53.5 billion in establishments with 100 to 499 employees and $112.8 billion in establishments with 500 employees or more. The percent of health care expenditures accounted for by employers were similar among the employment size categories -- nearly 85 percent in the two smaller size classes and 87 percent in establishments with 500 employees or more. The survey was based on a sample of establishments, typically defined as single physical locations where economic activity occurs. Small establishments (less than 100 employees) include companies with a single location, such as a small retailer, and units of larger companies, such as a service center for a large manufacturing company. The data for small establishments, therefore, may reflect health care plan expenditures of vastly different establishments. Expenditures by region Expenditures for health care plans in 1992 amounted to $67.0 billion in the Northeast, $72.5 billion in the South, $63.6 billion in the Midwest, and $55.4 billion in the West. The percent of total expenditures accounted for by employers ranged from 81 percent in the South to 89 percent in the Northeast. Explanatory note The data on expenditures for heath care plans were obtained from the June 1993 sample of establishments in the BLS Employment Cost Index (ECI) and Employee Benefits Survey (EBS) programs. That sample, selected on a probability basis, included about 4,600 sample units in private industry and about 1,000 units in state and local governments. Additional information on the ECI (a quarterly measure of change in the cost of labor -- wages, salaries, and employer costs for employee benefits) may be found in the BLS Handbook of Methods, BLS Bulletin 2414, chapter 8. Information on the EBS (an annual measure of the incidence and provisions of employee benefits in private industry and state and local governments) may be found in chapter 9 of the BLS Handbook of Methods. The health care expenditure survey was developed to meet quickly the critical needs of the Health Care Financing Administration (HCFA) in its role of monitoring national health care costs. The data were collected from an existing sample of establishments to minimize cost, reduce turnaround time, and minimize respondent burden. The data cover calendar year 1992 expenditures for all health care plans available through the employment relationship. The survey included expenses for insured plans, plans self-insured by employers, and plans covering retirees. Benefits for former employees and dependents under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (known as COBRA, which requires employers to offer continued access to health care coverage for specified periods) also were included. Contributions made by retirees and other former employees were included in the tabulation of employee expenditures. Health care plans included in the survey covered medical services and supplies and prescription drugs. Costs associated with employee assistance and wellness programs, workers' compensation benefits, accidental death and dismemberment, dread disease indemnities, disability income replacement benefits, and cash in lieu of health care benefits were excluded. Expenditures were included for rebates, reserves, premium taxes, pre-funding of retiree health care benefits, contributions to collectively bargained health care benefits, and catastrophic (stop-loss) coverage. Payments to third parties for administrative services also were included, but internal (within the establishment) administrative costs were not included. Standard errors were computed for all aggregate premium data presented. Standard errors can be used to define a range (confidence interval) around an estimate. The interval described by 2 standard errors above and two standard errors below the estimate would include the value of the population for 95 percent of the samples. The standard error for the total employer and employee expenditure -- $258.5 billion -- is $12.7 billion. (See table 2.) A standard error also was computed for the percent of the total health care expenditure for all civilian workers that was paid by employers. The standard error for this estimate is 0.3 percent. Table 1. Expenditures for health care in private industry and state and local governments, 1992: By industry, region, and establishment employment size; total and the share by employers and employees ------------------------------------------------------------------------------------------------- (Expenditures in billions of dollars) Total Employer Percent Employee Percent expenditure expenditure of total expenditure of total ------------------------------------------------------------------------------------------------- Civilian workers1/............. $258.5 $221.4 86% $37.2 14% State and local government.... 54.8 46.6 85 8.3 15 Private industry.............. 203.7 174.8 86 28.9 14 Goods-producing industries2/. 74.0 65.6 89 8.4 11 Construction................ 8.1 7.2 89 .9 11 Manufacturing............... 63.4 56.3 89 7.1 11 Service-producing industries. 129.7 109.2 84 20.5 16 Transportation and utilities 22.4 20.9 93 1.5 7 Wholesale trade............. 17.1 14.6 86 2.4 14 Retail trade................ 20.2 15.6 77 4.6 23 Finance, insurance, and real estate................ 19.1 15.5 81 3.6 19 Services.................... 50.9 42.5 84 8.4 17 Establishments employing: Fewer than 100 workers........ 92.2 78.1 85 14.2 15 100 workers or more........... 166.3 143.3 86 23.0 14 100-499 workers.............. 53.5 45.0 84 8.5 16 500 workers or more.......... 112.8 98.4 87 14.4 13 Region3/: Northeast..................... 67.0 59.3 89 7.7 12 South......................... 72.5 58.7 81 13.8 19 Midwest....................... 63.6 55.7 88 7.9 12 West.......................... 55.4 47.6 86 7.7 14 ------------------------------------------------------------------------------------------------- 1/ Excludes agriculture, private households, and the federal government. 2/ Includes mining in addition to industries shown. Mining is not shown separately because the standard errors on expenditure estimates are greater than 50 percent of those estimates. 3/ The regional coverage is as follows: Northeast--Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont; South--Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia; Midwest--Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin; and West--Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. NOTE: Components may not sum to totals because of rounding. Table 2. STANDARD ERRORS TABLE Standard errors,4/ in billions of dollars, associated with estimates of expenditures for health care in private industry and state and local governments, 1992: By industry, region, and establishment employment size; total and the share by employers and employees ------------------------------------------------------------------------------------------------- Total Employer Employee expenditure expenditure expenditure ------------------------------------------------------------------------------------------------- Civilian workers1/............. $12.7 $10.9 $2.0 State and local government.... 7.2 6.1 1.2 Private industry.............. 10.2 8.8 1.6 Goods-producing industries2/. 5.9 5.2 0.8 Construction................ 1.2 1.1 .1 Manufacturing............... 6.3 5.5 .8 Service-producing industries. 7.9 6.7 1.4 Transportation and utilities 3.8 3.6 .3 Wholesale trade............. 2.7 2.4 .4 Retail trade................ 2.5 2.0 .6 Finance, insurance, and real estate................ 2.3 1.9 .5 Services.................... 5.0 4.2 .9 Establishments employing: Fewer than 100 workers........ 5.2 4.5 1.0 100 workers or more........... 6.1 5.3 1.0 100-499 workers.............. 1.8 1.6 .3 500 workers or more.......... 4.1 3.7 .7 Region3/: Northeast..................... 7.2 6.4 .9 South......................... 5.9 4.8 1.1 Midwest....................... 6.1 5.4 .9 West.......................... 6.4 5.4 1.1 ------------------------------------------------------------------------------------------------- 4/ Standard errors are a measure of the precision of the expenditure estimates. We can be 95-percent confident that the interval around the expenditure estimate bounded by two times plus and two times minus the standard error contains the "true" expenditure. NOTE: See footnotes 1-3 on table 1.