Employer Provision of Health Insurance Jean Abraham University of - - PowerPoint PPT Presentation

The Impact of Medicaid Expansion on Employer Provision of Health Insurance

Jean Abraham University of Minnesota Anne Royalty Indiana University – Purdue University Indianapolis Coleman Drake University of Minnesota ARM 2017 Presentation June 26, 2017

Acknowledgements & Disclaimer

• We thank the SHARE program of the Robert

Wood Johnson Foundation for financial support.

• Any opinions and conclusions expressed

herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed.

Background

• Employer-sponsored insurance (ESI)

– 46% establishments offered ESI in 2015 – Declining over time

• ACA changed insurance options

– Low/Middle-Income: Marketplaces – Low-Income: Medicaid – Employer Mandate (2015)

Research Question

How has Medicaid expansion impacted ESI offers, workers’ ESI premiums, and workers’ ESI eligibility?

Prior Literature

• Insurance Expansions and ESI

– Shore-Sheppard et al. (2000) – Buchmueller et al. (2005)

• Effect of ACA on Employer Behavior

– Abraham, Feldman, Graven (2016) – Abraham, Royalty, Drake (2016)

Conceptual Framework

• Pauly and Goldstein (1976): Employers
• max. employees’ utility by offering their
• pref. comb. of wages, benefits s.t.

employers min. labor costs

• ACA and Medicaid Expansion

– Reduces value of benefits vs. wages – Reduce benefits on various dimensions – Likely focused on low-wage workers

Data

• MEPS-IC 2010-2015

– Repeated cross-sections – Approximately 141,900 establishments

• Supplemental Data

– County-level unemployment (BLS) – State-level minimum wage law (DoL) – Medicaid expansion details (KFF)

Key Variables

• Outcomes
• 1. Establishment offers insurance
• 2. Lowest single out-of-pocket premium
• 3. Percentage workers not eligible for offer
• Policies

– Medicaid Expansion – Employer Mandate

Establishment Characteristics

Outcome 2010-2013 2014-2015 Offer 49.13 44.19***

• S. OOP Prem.

$1,033 $1,010

• Pct. Not Elig.

19.43 20.47***

• Pct. Low Wage

33.55 30.56*** Sample Size 99,000 42,900

Econometric Model (DID)

𝑃𝑣𝑢𝑗𝑢 = 𝛾𝑌𝑗𝑘𝑢 + 𝛿𝑆𝑗𝑢 + 𝜀𝑁𝑡𝑢 + 𝜃𝑡 + 𝜄𝑢 + 𝜈𝑗𝑘𝑙𝑢

– Estab. 𝑗, county 𝑘, state 𝑡, year 𝑢 – Outcomes 𝑃𝑣𝑢 – Controls 𝑌 – Employer mandate 𝑆 – Medicaid expansion 𝑁 – Fixed effects 𝜃 (state), 𝜄 (year)

Estimation

• Offer: Linear Probability Model
• Single OOP Premium: Two-Part Model

– First Stage: Logit – Second Stage: GLM log link, gamma dist.

• Pct. Not Eligible: Negative Binomial
• MEPS-IC survey design

Average Marginal Effects

Outcome Offer (pp) SOOP ($)

• N. Elig (pp)

Medicaid Exp.

• 0.0046

(0.0068)

• 36.5

(34.4) 4.01* (1.82)

• Emp. Mandate

0.061*** (0.0064) 149** (49.6)

• 3.88*

(1.83)

• Pct. Low Wage
• 0.0017***

(0.00005) 2.01*** (0.3) 0.30*** (0.016) Year FE Dec. Inc. Not Sig.

Sensitivity Checks

• DID Identification

– Common Trends Assumption – Placebo Test for Pct. Not Elig

• Other

– Medicaid, Low Wage Interaction – Measures of Medicaid

Conclusions

• Medicaid Expansion

– No impact on offers, single OOP premiums – Decreased worker eligibility for offers (4pp) – No differential effect in low-wage estabs.

• Employer Mandate

– Increased offers – Increased SOOP – Increased eligibility

BCRA Implications

• Medicaid expansion phase out

– Unlikely to change offers, worker premiums

• r accompanying trends

– Will increase worker eligibility, but perhaps at the expense of wages

• Employer mandate repeal

– May decrease offers, wrkr prems., eligibility

Coleman Drake

Division of Health Policy & Management School of Public Health

drake222@umn.edu I am on the job market!