Low participation in a New York state program to reduce the number of people without health insurance is causing researchers to doubt whether some proposed reforms will help solve the health-care crisis.
New York state offered to underwrite half of employee health insurance costs for firms with fewer than 20 workers in a pilot program started in 1989.
But a year later, the program had increased by only 3.5 percentage points the number of small companies covering their workers, says a report in today'sJournal of the American Medical Association.
After educating the remaining eligible firms about the subsidies and gauging their interest, researchers estimated the maximum eventual increase in participation would total 16.5 percentage points.
"This small effect seems especially surprising because the price of insurance is the most frequently cited reason for not offering insurance," the researchers said.
Smaller companies are less likely to offer insurance to workers than larger firms, in part because they have to pay more for insurance, said the researchers, who surveyed a total of 530 small companies in two areas, Albany and the New York City borough of Brooklyn.
They said New York's program seemed hamstrung by low visibility, in spite of direct mail advertising and high costs even with the large subsidy.