The Role of Health Insurance in Joint Retirement among Married Couples

This paper examines the role of employer provided health insurance in the retirement decisions of dual working couples. The near elderly have high-expected medical expenditures; therefore, availability of health insurance is an important factor in their retirement decisions. We determine if access to retiree health insurance for early retirement enables couples to time their retirement together – a behavior called “joint retirement.” We find that wives’ retiree health insurance more than doubles the propensity to retire jointly, suggesting that health insurance is an important consideration in coordinating retirement decisions among couples. Even though retiree health insurance has a substantial effect on joint retirement, its effect on overall employment patterns is modest, accounting for a 2 percentage point fall in employment.Retirement, health insurance

Labor Market Implications of Employer Provided Health Insurance: Dissertation Summary

This dissertation examines potential labor market problems arising from the link between employment and health insurance. I study three main issues. First, the non-portability of employer provided health insurance implies that if wages do not offset differences in the valuation of health insurance across jobs, individuals may not move to jobs with higher match specific productivity. I estimate this phenomenon, called job lock, using the National Medical Expenditure Survey (NMES), 1987. Second, small firms that offer health insurance may attempt to avoid expensive premium variability by maintaining a work force with low expected health costs. Using the NMES, I find small firms that offer health insurance are less like to hire and more likely to layoff workers with families that have medical conditions that lead to higher health insurance premiums. These results suggest that the link between small firm health insurance and employment leads to employment distortions. Third, states have implemented small group health insurance reforms such as portability reforms and premium rating reforms that limit or ban the use of health status in setting premiums. Using March Current Population Survey data from 1991 to 1996, I find that rating reforms increase job mobility and small firm employment opportunities for the sick

Do Patients Bypass Rural Hospitals? Determinants of Inpatient Hospital Choice in Rural California

Rural hospitals play a crucial role in providing healthcare to rural Americans, a vulnerable and underserved population; however, rural hospitals have faced threats to their financial viability and many have closed as a result. This paper examines the hospital characteristics that are associated with patients choosing rural hospitals, and sheds light on the types of patients who depend on rural hospitals for care and, hence, may be the most impaired by the closure of rural hospitals. Using data from California hospitals, the paper shows that patients were more likely to choose nearby hospitals, larger hospitals, and hospitals that offered more services and technologies. However, even after adjusting for these factors, patients had a propensity to bypass rural hospitals in favor of large urban hospitals. Offering additional services and technologies would increase the share of rural residents choosing rural hospitals only slightly.Rural hospitals, hospital choice, rural health

Employer-Based Insurance: Coverage and Cost

Explores the variation in cost by employers and enrollees, types of employers that offer coverage, access to coverage by workers, and how costs would change, especially for small businesses, if new policies required coverage for all full-time workers

Is Employer-Based Health Insurance a Barrier to Entrepreneurship?

The focus on employer-provided health insurance in the United States may restrict business creation. We address the limited research on the topic of “entrepreneurship lock” by using recent panel data from matched Current Population Surveys. We use difference-indifference models to estimate the interaction between having a spouse with employer-based health insurance and potential demand for health care. We find evidence of a larger negative effect of health insurance demand on business creation for those without spousal coverage than for those with spousal coverage. We also take a new approach in the literature to examine the question of whether employer-based health insurance discourages business creation by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure of identifying age in months from matched monthly CPS data, we compare the probability of business ownership among male workers in the months just before turning age 65 and in the months just after turning age 65. We find that business ownership rates increase from just under age 65 to just over age 65, whereas we find no change in business ownership rates from just before to just after for other ages 55-75. We also do not find evidence from the previous literature and additional estimates that other confounding factors such as retirement, partial retirement, social security and pension eligibility are responsible for the increase in business ownership in the month individuals turn 65. Our estimates provide some evidence that "entrepreneurship lock" exists, which raises concerns that the bundling of health insurance and employment may create an inefficient level of business creation.

Is Employer-Based Health Insurance a Barrier to Entrepreneurship?

The focus on employer-provided health insurance in the United States may restrict business creation. We address the limited research on the topic of “entrepreneurship lock” by using recent panel data from matched Current Population Surveys. We use difference-in-difference models to estimate the interaction between having a spouse with employer-based health insurance and potential demand for health care. We find evidence of a larger negative effect of health insurance demand on the entrepreneurship probability for those without spousal coverage than for those with spousal coverage. We also take a new approach in the literature to examine the question of whether employer-based health insurance discourages entrepreneurship by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure of identifying age in months from matched monthly CPS data, we compare the probability of business ownership among male workers in the months just before turning age 65 and in the months just after turning age 65. We find that business ownership rates increase from just under age 65 to just over age 65, whereas we find no change in business ownership rates from just before to just after for other ages 55-75. Our estimates provide some evidence that "entrepreneurship lock" exists, which raises concerns that the bundling of health insurance and employment may create an inefficient allocation of which or when workers start businesses.Self-employment, entrepreneurship, health insurance

Is Employer-Based Health Insurance a Barrier to Entrepreneurship?

The focus on employer-provided health insurance in the United States may restrict business creation. We address the limited research on the topic of "entrepreneurship lock" by using recent panel data from matched Current Population Surveys. We use difference-indifference models to estimate the interaction between having a spouse with employer-based health insurance and potential demand for health care. We find evidence of a larger negative effect of health insurance demand on business creation for those without spousal coverage than for those with spousal coverage. We also take a new approach in the literature to examine the question of whether employer-based health insurance discourages business creation by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure of identifying age in months from matched monthly CPS data, we compare the probability of business ownership among male workers in the months just before turning age 65 and in the months just after turning age 65. We find that business ownership rates increase from just under age 65 to just over age 65, whereas we find no change in business ownership rates from just before to just after for other ages 55-75. We also do not find evidence from the previous literature and additional estimates that other confounding factors such as retirement, partial retirement, social security and pension eligibility are responsible for the increase in business ownership in the month individuals turn 65. Our estimates provide some evidence that "entrepreneurship lock" exists, which raises concerns that the bundling of health insurance and employment may create an inefficient level of business creation.entrepreneurship, health insurance, medicare, job lock

Health Insurance Transitions After Retirement - Did HIPAA Expand Coverage for Retirees?

The near elderly are a vulnerable segment of the population with high-expected medical expenses. Individuals who retire before Medicare eligibility may lose employer provided health insurance, and may face a potentially costly uninsured period. We use data from the Health and Retirement Study from 1992 to 2002 to profile the insurance status of workers who retire. We also evaluate the role of the Health Insurance Portability and Accountability Act (HIPAA) in reducing the number of uninsured among the near elderly. We find that a relatively small proportion of workers lose health insurance on retirement; however, we find no evidence that HIPAA has helped these workers to remain insured.

Do Small Group Health Insurance Regulations Influence Small Business Size?

The cost of health insurance has been the primary concern of small business owners for several decades. State small group health insurance reforms, implemented in the 1990s, aimed to control the variability of health insurance premiums and to improve access to health insurance. Small group reforms only affected firms within a specific size range, and the definition of the upper size threshold for small firms varied by state and over time. As a result, small group reforms may have affected the size of small firms around the legislative threshold and may also have affected the propensity of small firms to offer health insurance. Previous research has examined the second issue, finding little to no effect of health insurance reforms on the propensity of small firms to offer health insurance. In this paper, we examine the relationship between small group reform and firm size. We use data from a nationally representative repeated cross-section survey of employers and data on state small group health insurance reform. Contrary to the intent of the reform, we find evidence that small firms just below the regulatory threshold that were offering health insurance grew in order to bypass reforms.Health insurance, small business

Health Savings Accounts for Small Businesses and Entrepreneurs: Shopping, Take-Up and Implementation Challenges

A combination of high deductible health plans (HDHPs) and health savings accounts (HSAs) holds promise for expanding health insurance for small firms. We provide information on HSA take-up and shopping behavior from a 2008 survey of female small business owners, revealing that the HSA marketplace can be confusing for small firms. HSAs may have expanded access to health insurance for the smallest firms (under three employees), but not for small firms more generally. A sizable number of firms offering HSA-eligible insurance did not offer attached HSAs. Firms offering HSAs were satisfied with their experiences, but faced challenges in implementing them.Health Savings Accounts, Health Insurance Costs, Small Business