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2006 Employer Survey on health insurance in Montana.

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Montana has one of the highest rates of uninsured residents in the nation. Nineteen percent, or 173,000 Montanans, were without health insurance in 2003. In 2006, the uninsured rate was still 19 percent. Most people get health insurance through their employers, yet three out of four Montanans without insurance coverage were, in fact, employed--many of them in permanent jobs, according to the Bureau of Business and Economic Research's 2006 Montana Employer Survey.

The Bureau first conducted the Montana Employer Survey on health insurance in 2003 in an attempt to fill major gaps in the state's knowledge of its uninsured population. The 2006 Montana Employer Survey was a repeat stratified random telephone survey of nearly 500 businesses located in Montana and covered by unemployment insurance. This article reports the survey findings.

Employer-based Health Insurance

The high cost of health insurance is a major barrier to employer-based health insurance in Montana. Health insurance costs dramatically affect small firms with limited financial resources; in Montana, small firms with 10 or fewer employees represent 35 percent of the state's employment.

Tax credits and premium assistance are part of the state's policy response to the problem of low insurance offer rates by small firms. This health insurance assistance to small firms is used in other states such as Maine, Massachusetts, New Mexico, and New York that have established or are in the process of establishing comprehensive health insurance reform.

Montana has been developing policies for extending coverage to different target groups, such as small employers (Health Care Affordability program), low-income children (CHIP expansion) and other groups (Medicaid and special entitlement health programs). Both the expansion of public health insurance and assistance to small firms should help reduce Montana's number of uninsured although, given that 173,000 Montanans are not covered, other health policy actions are necessary.

Survey Findings

About half of all Montana employers offered health insurance to their employees in 2003, a rate that had not changed by 2006. Although the overall offer rate of health insurance by employers did not change over the three-year period, there was a change in the percentage of employers offering insurance to all of their employees.

The high cost of health insurance and the work force size were major determinants for offering job-based health insurance in Montana. Very small firms with five employees or less were the least likely to offer health insurance. In 2003, 63 percent of these small firms did not offer health insurance, a rate that decreased slightly to 60 percent in the 2006 survey.

Forty-eight percent of Montana firms with six to 10 employees offered health insurance in 2003 and 47 percent in 2006 (Tables 1 and 2).

Larger firms were more likely to offer health insurance to their workers. The offer rate, or percentage of firms offering health insurance, increased with a firm's size. Businesses with 100 or more employees were at the critical size threshold for offering health insurance.

Work Force Coverage, Benefits, and Costs

Health insurance is not offered to all workers. Small firms offered coverage to a portion of their employees, while larger firms offered insurance to a higher proportion of their work force, although not always to their...

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