Number 11, March 2006



The University of Michigan
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Q&A with Anthony LoSasso, Ph.D.

Anthony LoSasso, Associate Professor of Health Policy and Administration at the University of Illinois at Chicago, is an economist who specializes in issues that intersect health and labor economics and health services research. LoSasso recently co-authored a paper, "Immigrants and Employer-sponsored Health Insurance," for ERIU.

Q: What are among the biggest myths about why immigrants are less likely to have employer-sponsored health insurance and why their uninsured rates are so high?
A: One myth is that wages mean more than fringe benefits to this group. There is no evidence that when employers offer coverage, immigrants choose not to take it up because they would prefer to earn the cash.

Q: Are immigrants less likely to be employed?
A: It's not that they are employed less. Employment rates are very similar. In fact, male immigrants, both naturalized citizens and non-citizens, have higher rates of employment than natives.

Q: Your paper shows that take-up rates among immigrants are not lower than other groups. Then why do they have much lower rates of employer-sponsored coverage than other groups? Are employers only hiring immigrants on a part-time basis or as contractors to avoid offering benefits?
A: There are still differences in take-up rates, but they are smaller and it does not appear to be a major factor. Eligibility also is not a factor. It really comes down to being offered health insurance. That is where we see the really large differences.

Q: What's the reason for the lower offering of ESI to immigrants? Or is it that immigrants seek jobs without offers of health insurance?
A: The firms employing immigrants tend to be smaller firms, with lower paying jobs. These are jobs that are more on the fringe of the job market, in firms that are probably new and that come and go.

Q: If immigrants are seeking jobs without employer-sponsored insurance, and it's not necessarily because they are going for wages over benefits, what does their lower rate of employer-sponsored health coverage reflect?
A: It reflects low education. It's working for small companies and it is age to some extent. Those really are the main factors. There are some small unexplained differences. It could be language, or a lot of different things that we can't accurately measure.

Q: What do these results mean for health policy?
A: The policy issue becomes how to encourage employers to offer this benefit in a way that doesn't bankrupt them. That would make everybody worse off because not only is there no health insurance but there is no wage because the company cannot profitably exist. So, it points to models that are being tried. There are states, like Maine's Dirigo Health, that are experimenting with trying to subsidize small employers' provision of health benefits. Another way to go could be to offer a sort of bare bones policy, which might not be what you or I would prefer to have, but again it is a choice of having something versus nothing. It sort of moves us to the consumer-driven health model, the health savings accounts, for example. Those are the sort of the directions you have to move in. We are talking about how to get firms to offer more. Well, make the thing cheaper and then they might be willing to offer something. People can certainly say, and it is entirely valid, that these types of plans might discourage preventive care services and they might lead to people skimping on their health. And, those are all entirely valid and those are concerns that can be raised.

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Funded by The Robert Wood Johnson Foundation, ERIU is a five-year program shedding new light on the causes and consequences of lack of coverage, and the crucial role that health insurance plays in shaping the U.S. labor market. The Foundation does not endorse the findings of this or other independent research projects.