Price and the Health Plan Choices of Retirees

This study analyzes health plan choices of retirees in an employer-sponsored health benefits program that resembles "premium support" models proposed for Medicare. In this program, out-of-pocket premiums depend on when an individual retired and his or her years of service as of that date. Since this price variation is exogenous to unobserved plan attributes and retiree characteristics, it possible to obtain unbiased premium elasticity estimates. The results indicate a significantly negative effect of premiums. The implied elasticities are at the low end of the range found in previous studies on active employees.

Health Insurance Reform and HMO Penetration in the Small Group Market

We use data from several national employer surveys conducted between the late 1980s and the mid-1990s to investigate the effect of state-level underwriting reforms on HMO penetration in the small-group health insurance market. We identify reform effects by exploiting cross-state variation in the timing and content of reform legislation and by using mid-sized and large employers, which were not affected by the legislation, as within-state control groups. While it is difficult to disentangle the effect of state reforms from other factors affecting HMO penetration in the small group markets, the results suggest a positive relationship between insurance market regulations and HMO penetration.

Health Insurance Take-up by the Near Elderly

This study examines the effect of price on the demand for health insurance by early retirees between the ages of 55 and 64. The analysis is based on administrative data from a medium sized employer and takes advantage of a natural experiment created by the firm's health insurance contribution policy. The amount the firm contributes toward retiree health insurance coverage depends on when a person retired and her years of service at that date. As a result of this policy, there is considerable variation in out-of-pocket premiums faced by individuals in the data, but this variation is independent of the non-price attributes of the health insurance plans offered, and plausibly exogenous to individual characteristics that are likely to affect the demand for insurance. We find that price has a statistically significant but small effect on the decision to take up coverage. The implied elasticities are very similar to results found in previous studies using very different data.

Union Effects on Health Insurance Provision and Coverage in the United States

During the past two decades, union density has declined in the United States and employer provision of health benefits has undergone substantial changes in extent and form. Using individual data spanning the years 1983-1997, combined with establishment data for 1993, we update and extend previous analyses of private-sector union effects on employer-provided health benefits. We find that the union effect on health insurance coverage rates has fallen somewhat but remains large, due to an increase over time in the union effect on employee 'take-up' of offered insurance, and that declining unionization explains 20-35 percent of the decline in employee health coverage. The increasing union take-up effect is linked to union effects on employees' direct costs for health insurance and the availability of retiree coverage.

The Effect of the State Children's Health Insurance Program on Health Insurance Coverage

This paper presents the first national estimates of the effects of the SCHIP expansions on insurance coverage. Using CPS data on insurance coverage during the years 1996 through 2000, we estimate two-stage least squares regressions of insurance coverage. We find that SCHIP had a small, but statistically significant positive effect on insurance coverage. Our regression results imply that between 4% and 10% of children meeting income eligibility standards for the new program gained public insurance. While low, these estimates indicate that states were more successful in enrolling children in SCHIP than they were with prior Medicaid expansions focused on children just above the poverty line. Crowd-out of private health insurance was estimated to be in line with estimates for the Medicaid expansions of the early 1990s, between 18% and 50%.

How Did SCHIP Affect the Insurance Coverage of Immigrant Children?

The State Children's Health Insurance Program (SCHIP) significantly expanded public insurance eligibility and coverage for children in "working poor" families. Despite this success, it is estimated that over 6 million children who are eligible for public insurance remain uninsured. An important first step for designing strategies to increase enrollment of eligible but uninsured children is to determine how the take-up of public coverage varies within the population. Because of their low rates of insurance coverage and unique enrollment barriers, children of immigrants are an especially important group to consider. We compare the effect of SCHIP eligibility on the insurance coverage of children of foreign-born and native-born parents. In contrast to research on the earlier Medicaid expansions, we find similar take-up rates for the two groups. This suggests that state outreach strategies were not only effective at increasing take-up overall, but were successful in reducing disparities in access to coverage.

The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii

Over the past few decades, policy makers have considered employer mandates as a strategy for stemming the tide of declining health insurance coverage. In this paper we examine the long term effects of the only employer health insurance mandate that has ever been enforced in the United States, Hawaii's Prepaid Health Care Act, using a standard supply-demand framework and Current Population Survey data covering the years 1979 to 2005. During this period, the coverage gap between Hawaii and other states increased, as did real health insurance costs, implying a rising burden of the mandate on Hawaii's employers. We use a variant of the traditional permutation (placebo) test across all states to examine the magnitude and statistical properties of these growing coverage differences and their impacts on labor market outcomes, conditional on an extensive set of covariates. As expected, the coverage gap is larger for workers who tend to have low rates of coverage in the voluntary market (primarily those with lower skills). We also find that relative wages fell in Hawaii over time, but the estimates are statistically insignificant. By contrast, a parallel analysis of workers employed fewer than 20 hours per week indicates that the law significantly increased employers' reliance on such workers in order to reduce the burden of the mandate. We find no evidence suggesting that the law reduced employment probabilities.health insurance, employment, hours, wages

Advantageous selection in private health insurance: The case of Australia

When consumers have private information about risk of suffering a loss, or equivalently, if insurers are prohibited from using observable information on risk in underwriting, theoretical models of insurance predict adverse selection. Yet the most common finding in empirical studies is that of no positive correlation between risk and insurance coverage. This is found for different types of insurance (e.g. car, health, life) and in different countries (e.g. France, US, UK, Israel) suggesting a fundamental relationship involving private information and consumer preferences. In this paper, we investigate the nature of risk selection in the Australian market for private health insurance in which community rated private health insurance complements a universal public health care system. We use National Health Survey data on hospital utilisation and individual characteristics to construct an empirical analogue for the risk variable in the Rothschild and Stiglitz model. Estimating the relationship between insurance and risk semi-parametrically, we find robust evidence of favourable selection. To explore the extent to which underlying risk preferences rather than risk drives the decision to purchase health insurance, we use Household Expenditure Survey data to model decisions to purchase a range of insurance products (health, life, accident, home, car) and to engage in risky behaviours (smoking and various forms of gambling). Correlations between residuals in the model suggest that advantageous selection is driven by risk aversion, which theoretical models do not typically capture.health insurance, adverse selection, Australia

Union effects on health insurance provision and coverage in the United States

Since Freeman and Medoff's (1984) comprehensive review of what unions do, union density in the U.S. has fallen substantially. During the same period, employer provision of health insurance has undergone substantial changes in extent and form. Using individual data from various supplements to the Current Population Survey and establishment data from the 1993 Robert Wood Johnson Foundation survey, we investigate the effects of unionization on employer provision of health benefits. We find that in addition to increasing coverage by employer-provided health benefits, unions reduce employee cost sharing and substantially increase the probability that employer-provided health plans extend to retirees. The union effects on coverage for current employees and for retirees have risen over time, and our estimates suggest that declining unionization explains about 17-20 percent of the decrease in employer-provided health insurance between 1983 and 1997.Labor unions ; Insurance, Health