Examining the Impacts of Health Insurance Costs and Health Reform on Private Insurance Coverage, Employment, and Wages

Abstract

This dissertation is focused on private health insurance coverage, health reform and labor market outcomes. Using novel and rigorous empirical strategies, the first two essays estimate the impact of health insurance tax credits adopted during Massachusetts’s 2006 health reform and as a part of the Affordable Care Act (ACA) in 2014 on non-group private health insurance coverage. In Massachusetts, I find a large response on the margin for the tax credits. For the ACA, I document robust, positive effects on private coverage at the lowest eligibility threshold and weak evidence of effects at higher thresholds. Separating these effects from other important ACA policies, such as Medicaid expansion or the individual mandate, is vital to future efforts to modify and sustain the progress made by the ACA. The third essay addresses a significant gap in the literature, examining how employer-sponsored health insurance (ESI) affects the earnings distribution. I examine the role of sample selection and selection bias as an explanation for the inconsistent findings in the literature. Using quantile regression, I show that that cost-shifting due to compensating wage differentials occurs and that cost-shifting can be offset for higher earnings due to higher marginal tax rates, producing net-positive effects. Together, my dissertation indicates that reducing reliance on ESI may have beneficial effects on earnings for low- and middle-income individuals and that health insurance tax credits provide an appealing, alternative coverage option.Doctor of Philosoph