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Ann Arbor Research Conferences
Coverage Dynamics and the Uninsured Research Conference
July 13 - 15, 2003
Ann Arbor, Michigan
The 2003 Ann Arbor conference featured findings from projects funded through ERIU’s 2002 general solicitation of research proposals. Topics included the influence of macroeconomic conditions on coverage rates, the microeconomics of health insurance decisions, and the impact of two major policy changes, the 1996 welfare reform legislation and the State Children’s Health Insurance Program (SCHIP) enacted in 1997. |
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| Conference Highlights | Participant List | Papers Presented |
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Author |
Conference Paper |
Summary |
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Aizer, Anna
Grogger, Jeffrey |
Parental Medicaid Expansions and Health Insurance Coverage (PDF)
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Between the mid1980s and the mid1990s, a variety of expansions increased the number of low-income children who were eligible for Medicaid. Their parents, however, often remained ineligible unless they were eligible for welfare. In the 1990s, some states made such parents eligible for Medicaid. The 1996 welfare reform law (PRWORA) required all states to delink Medicaid eligibility from welfare eligibility. Using CPS data, Anna Aizer and Jeffrey Grogger use the variation across states to examine the effect of these expansions. They find modest increases in health insurance coverage as a result of the expansions. They also find spillover effects from newly eligible parents to their children; that is, the children of these parents are more likely to be enrolled in Medicaid. The effects varied by race with little effect on whites, but significant and generally sizeable effects on blacks and Hispanics. As a result, the expansions contribute to reducing racial differences in the rates of insurance coverage. |
Project Summary |
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Bhattacharya, Jayanta
Vogt, William B. |
Uninsurance and Adverse Selection in Health Insurance and Labor Markets |
While it is often asserted that employment is a neutral way to gather workers together to form homogenous health insurance risk pools, this neutrality may not hold for the high-turnover employers that do not offer health insurance. Jay Bhattacharya and William Vogt derive a model of wages and health insurance that considers the role played by the persistence in health status and degree of job turnover. In their model, job market turnover explains which firms provide insurance and which types of workers are attracted to those firms. Specifically, they find that firms which offer health insurance attract relatively sicker workers, while those that do not offer insurance attract relatively healthier workers. Low turnover and low persistence of health status across time favor employer provision of health insurance. Using CPS data, they find a positive relationship between the average tenure and the proportion of employees who have health insurance. |
Project Summary |
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| Borjas, George |
Welfare Reform, Labor Supply, and Health Insurance in the Immigrant Population (PDF) |
The federal government enacted legislation in 1996 that limited the eligibility of immigrant households for many types of public assistance, including health insurance (Medicaid). States responded differently in the extent to which they used state funds to shield immigrants from the cutbacks. Using CPS data, George Borjas exploits this variation in state leniency to examine the link between cutbacks and health insurance coverage. He finds that, while the share of non-citizen immigrants with Medicaid coverage fell, overall coverage did not. This result was attributed to increased labor supply by immigrants to firms that offered health insurance. The “crowding in” from less generous Medicaid coverage resulted in more coverage by employer-sponsored health insurance. |
Project Summary |
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Cawley, John
Simon, Kosali |
The Impact of Macroeconomic Conditions on the Health Insurance Coverage of Americans (PDF) |
How do macroeconomic conditions – fluctuations in the unemployment rate, changes in overall output, and whether the economy is in a recession - influence how many people have health insurance? John Cawley and Kosali Simon looked at these questions, focusing on changes in employment status and coverage rates. They find that a 1 percent increase in the unemployment rate is associated with an overall decline in health insurance coverage of .33 percent for men, .21 percent for women, and .25 percent for children. Using March 2001 as the time the most recent recession began, the Cawley/Simon results suggest that the deterioration in macroeconomic conditions has led to an increase of 1.7 million Americans without health insurance. |
Project Summary |
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DeLeire, Thomas
Levine, Judith
Levy, Helen |
Welfare Reform and the Uninsured (PDF) |
Thomas DeLeire, Judith Levine, and Helen Levy combine the March CPS data and the February Contingent Work supplements to study how welfare reform affected health insurance coverage. They find the probability of being without health insurance generally increased over the 1990’s. In an environment where coverage was falling, welfare reform appears to have produced a modest increase in health insurance coverage for women with less than a high school degree and for women with a high school degree relative to what would have occurred in the absence of welfare reform. |
Project Summary |
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Dey, Matthew
Flinn, Christopher |
An Equilibrium Model of Health Insurance Provision and Wage Determination (PDF) |
Matthew Dey and Christopher Flinn seek to understand the effect of employer-provided health insurance on job mobility rates and economic welfare. In their model, wages are set and health insurance coverage decisions are made together in one coordinated process. Assuming that more productive employees are less likely to experience a negative shock to their health, they use the 1996 SIPP panel to look at worker mobility patterns. They find that health insurance decreases mobility rates; workers with health insurance stay in their jobs longer. In their model, this lower mobility rate represents an efficient level of job turnover rather than (inefficient) “job lock.” The vast majority of moves from job to job are associated with productivity improvements. |
Project Summary |
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Gruber, Jonathan
Washington, Ebonya |
Subsidies to Employee Health Insurance Premiums and the Health Insurance Market (PDF) |
Due to changes in federal law, government employees are now able to pay the employee portion of the health insurance premium on a pre-tax basis. This change occurred for postal employees in 1994 and for remaining federal employees in 2000, setting up a natural experiment to study the effect of price on insurance take-up. Using data on all federal employees, Jonathan Gruber and Ebonya Washington find there is a very small elasticity of insurance take-up with respect to its after-tax price. For family take-up, the estimated elasticity of take-up is -.022, smaller than the lowest estimates in previous literature. Both already insured and newly insured employees benefited from the reduction in out of pocket price. With a total cost of $693 million in reduced tax revenues, the change in policy costs over $38,000 per newly insured person per year. |
Project Summary |
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Royalty, Anne
Hagens, John |
The Effect of Premiums on the Decision to Participate in Health Insurance and Other Fringe Benefits Offered by the Employer: Evidence from a Real-World Experiment (PDF) |
Anne Beeson Royalty and John Hagens report on choices that employees of one firm made when faced with a menu of fringe benefits with different prices and options. These employees were not responsive to variation in the price of health insurance when deciding whether or not to take up health insurance. Out-of-pocket premium had no statistically or economically significant effect on the decision to take up health benefits, with an implied price elasticity of -.013. In contrast, dental coverage, vision benefits, long-term care insurance, and a package of wellness benefits all had progressively larger price responses, all meeting conventional tests of statistical significance. |
Project Summary |
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Wolfe, Barbara
Kaplan, Thomas
Haveman, Robert
Cho, Yoon Young |
Extending Health Care Coverage to the Low-Income Population: The Influence of the Wisconsin BadgerCare Program to Insurance Coverage and Labor Force Participation (PDF) |
Barbara Wolfe, Thomas Kaplan, and Robert Haveman studied whether the Wisconsin SCHIP program, called “BadgerCare”, both decreased the proportion of the low income population without health care coverage and increased the employment and earning of low-income single parents who are covered by the program. Unlike SCHIP programs in most other states, BadgerCare provides health insurance to both adults and children in low-income families with children. They find that BadgerCare has led to a major expansion in insurance coverage for adults leaving welfare – 22 percent for those who left welfare in 1995 and 14 percent for those who left in 1997. The effects on employment are small but positive. |
Project Summary |
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| Yelowitz, Aaron |
Medicaid and Work Decisions of Married Women (PDF) |
The expanded income eligibility levels for Medicaid in the 1980s and 1990s allowed more married women to obtain health insurance through this public program. Aaron Yelowitz looks at the effects of these changes on the labor supply of married women. On one the hand, economic theory predicts that these changes in eligibility would decrease labor supply through an income effect. On the other hand, theory also predicts that the changes would increase labor supply by allowing work to increase without endangering Medicaid receipt. Using CPS and SIPP data, Yelowitz finds that, overall, the income eligibility expansions slightly reduced married women’s labor supply. |
Project Summary |
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