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All in the Family? Children’s Public Coverage, Dual-Earner Households and Employer-Sponsored Insurance PowerPoint Presentation
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All in the Family? Children’s Public Coverage, Dual-Earner Households and Employer-Sponsored Insurance. Jessica Vistnes (AHRQ) Kosali Simon (Indiana University, SPEA and NBER). Motivation.

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All in the Family? Children’s Public Coverage, Dual-Earner Households and Employer-Sponsored Insurance

Jessica Vistnes

(AHRQ)

Kosali Simon

(Indiana University, SPEA and NBER)

motivation
Motivation
  • Dependent health insurance for workers’ spouses and children is an important source of coverage in the U.S.
  • Roughly half of non-elderly Americans covered by employer-sponsored insurance have that coverage as a dependent (Current Population Survey, 2008).
employees enrollment decisions
Employees’ Enrollment Decisions
  • Two-worker Couples with Two Offers of Insurance:
  • Without children
    • 2 single policies vs. 1 family policy?
    • Employee-plus-one coverage, if available?
  • With children:
    • Are eligible for public coverage?
    • Different sources of coverage to cover everyone?
employers decisions
Employers’ Decisions
  • Offer coverage at all?
  • Offer dependent coverage?
  • How to set employee contributions?
  • Restrict access to coverage for worker’s spouse?
  • Offer cash incentives if workers decline coverage?
prior literature
Prior Literature

On effects of coverage through a working spouse:

  • Dranove, Spier and Baker (2001)
  • Vistnes, Morrisey, Jensen (2006)

On effects of public coverage for children:

  • Shore-Sheppard, Buchmueller, Jensen (2000)
  • Buchmueller, Cooper, Simon and Vistnes (2005)
changes in dependent coverage 2000 2008
Changes in Dependent Coverage 2000-2008
  • Dependent coverage is less likely to be offered at small employers
  • Employee-plus-one coverage more likely to be offered
  • Employee premium contributions have risen
availability of dependent coverage
Availability of Dependent Coverage

Firms with < 10 workers

All Firms

Source: Vistnes, Zawacki, Simon and Taylor (2012)

goals
Goals
  • To re-examine the effects of alternative sources of coverage on a number of ESI outcomes
  • To take into account rising unemployment rates over our analysis period and investigate whether the effects of alternative sources differ at low and high unemployment rates
meps insurance component meps ic
MEPS-Insurance Component(MEPS-IC)
  • 2005-2010 MEPS-IC
    • Large, annual, nationally representative establishment level survey
    • Sponsored by AHRQ, conducted by the Bureau of the Census.
  • Collects information on:
    • Offers of insurance, establishment/workforce characteristics
    • Number and types of plans
    • Total premiums, employee and employer contributions
    • Deductibles, copayments/coinsurance and other benefit details
slide11
Data
  • Information on full-time workers’ family characteristics
    • Estimates calculated from the 2005-2010 American Community Survey (ACS)
    • Merge onto the MEPS-IC by state, detailed industry and year
  • 2005-2010 Area Resource File:
    • County Unemployment Rate
    • Other variables
  • Estimate models separately by firm size

Small : < 100 and Large: >=100 workers

dependent variables establishment level
Dependent Variables: Establishment Level
  • Offers
    • Any coverage
    • Any dependent coverage
  • Take-up rates
  • Enrollment Shares for single, employee-plus-one, family
  • Restrictions on spousal coverage
  • Financial incentives to decline coverage
key independent variables
Key Independent Variables
  • Proportion of full-time workers (From ACS):
      • Married
      • Have children
      • Have children and are < 200% FPL
      • In families with two full-time working spouses
  • Eligibility index for Medicaid/CHIP coverage for children
  • Unemployment rates
  • Interaction terms
      • In families with two full-time working spouses * female
      • Have children and are < 200% FPL * Medicaid/CHIP Eligibility
other explanatory variables
Other Explanatory Variables
  • Establishment Characteristics:
    • Firm size, industry, age of business, ownership type, non-profit status
  • Workforce Characteristics:
    • Proportion of workers that are
      • Age 50 and older, female, union members
    • Wage distribution (three wage categories)
  • Plan type, # plans, single premium in plan equations
  • State and year fixed effects
  • County level characteristics from Area Resource File
offer model with unemployment interactions small firms
Offer model with unemployment interactions Small firms

Estimated a second model that added the following two variables:

Unemployment rate * two-worker-family

Unemployment rate * two-worker-family * female

outcome offer equation with unemployment interactions small firms
Outcome: Offer Equation with Unemployment Interactions - Small Firms

What if the % Two-Worker increases from 0 to 30%?

  • At establishments that are 50% female
outcome family single contributions large firms
Outcome:Family - Single Contributions Large Firms

Increasing

% Two-Worker

Increasing % Low-Income Children

At mean value for public eligibility

Increasing proportion with children < 200% FPL: 0 to mean values

$142 increase in marginal family contributions

  • At 50% female
  • Moving from 0% to 30% for two-worker families:
  • $508 increase in marginal family contributions
outcome spousal restriction on coverage large firms
Outcome: Spousal Restriction on Coverage Large Firms

Percentage Point Change in Spousal Restriction on Coverage

  • What if the percent of “workers married” increases from 0 to 50%?
  • And the percent of “2-worker households” increases from 0 to 25%?
outcome family enrollment shares large firms
Outcome: Family enrollment shares Large firms
  • What if we increase “% married” from 0 to 50% ?
    • 10 percentage point increase in family share
  • What if we increase “% with children” from 0 to 50?
    • 10 percentage point increase in family share
outcome enrollment shares large firms
Outcome: Enrollment Shares Large firms

What if we increase the “% in two-worker families”?

outcome cash incentives
Outcome: Cash Incentives
  • Large firms:
    • More likely to offer cash incentive as proportion with children increases
      • May reflect that these employees are more likely to enroll in expensive family coverage
    • Less likely to offer cash incentive as the proportion in two-worker families increases
      • May reflect that these employees are less likely to enroll in family coverage
  • Small firms:
    • Positive, significant effects on variables associated with alternative sources of coverage for children and adults
summary
Summary
  • Alternative sources of coverage affect:
    • Offers of coverage
    • Restrictions/incentives by employers
    • Premium contributions
    • Enrollment decisions
  • No distinction can be made between
    • Employers acting as agents for workers
    • Strategically encouraging alternative coverage
the affordable care act
The Affordable Care Act
  • The ACA introduced new alternative sources of coverage and new incentives for workers and employers.
  • Understanding how dependent coverage has changed in recent years helps set the context for changes that will occur under the ACA.