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The Diabetes Educator

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Medical Care Research and Review
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Employment-Based Health Insurance: Analysis of Rural-Urban Differences in One State

Patricia Ketsche

Georgia State University

This study estimates the propensity of firms to offer health insurance in a simultaneous equation model to control for the endogeneity between wages and health insurance. Previous research finds differences in rural and urban employer behavior with respect to health insurance benefits fully explained by differences in wages and firm size. In contrast, this study finds residual unexplained differences in the propensity to offer coverage that may be attributable to differences in plan supply, plan distribution, or differences in availability of substitutes for coverage (safety net care). Rural worker participation in offered coverage is more responsive to wage level than is the participation decision of urban workers. Together, these results imply that some of the differences in health insurance coverage rates for rural workers could be amenable to policy interventions.

Key Words: rural health • employment-based health insurance • insurance coverage • fringe benefits

Medical Care Research and Review, Vol. 62, No. 4, 458-478 (2005)
DOI: 10.1177/1077558705277386
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