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Health Affairs, Vol 13, Issue 1, 301-314
Copyright © 1994 by Project HOPE

DataWatch

Implicit pooling of workers from large and small firms

Risk pools for small employers have become an integral part of proposals for national health care reform and have been implemented by a number of states. These explicit attempts to pool small employers are occurring at the same time that many small-firm employees obtain health insurance through implicit pooling arrangements as the dependent of a policyholder insured by a large firm. We use data from the 1987 National Medical Expenditure Survey to document the extent of implicit pooling arrangements, to examine whether small-firm employees and their dependents are adverse health risks, and to assess the cost implications of pooling small- and large-firm employees and dependents.

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