_________________________________________________________________
E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 3, No. 8: April 25, 2002
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Publisher: LSN Employment, Labor, Compensation & Pension Journals
a division of
Social Science Electronic Publishing, Inc. (SSEP)
and Social Science Research Network (SSRN)
Editor: PAMELA PERUN
Urban Institute
Mailto:pamela@planetnow.com
Copyright: SSEP, Inc. 2002. All rights reserved.
Leading Social Science Research Delivered To Your Desktop
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Topic of This Issue:
Health Care
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T A B L E of C O N T E N T S
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NEW and FORTHCOMING ARTICLES
"Consumer Health Care Finances and Education: Matters of Values"
EBRI Issue Brief, No. 241, January 2002
LOIS A. VITT
Institute for Socio-Financial Studies
JURG K. SIEGENTHALER
Institute for Socio-Financial Studies
LINDA SIEGENTHALER
Institute for Socio-Financial Studies
DEANNA M. LYTER
Institute for Socio-Financial Studies
JAMIE KENT
Institute for Socio-Financial Studies
"Toward Full Mental Health Parity and Beyond"
Health Affairs, July/August 2001
DANIEL P. GITTERMAN
University of North Carolina at Chapel Hill
Department of Public Policy
ROLAND STURM
RAND, Santa Monica
RICHARD M. SCHEFFLER
University of California, Berkeley
School of Public Health
WORKING PAPERS
"Health Insurance, Labor Supply, and Job Mobility: A Critical
Review of the Literature"
JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
BRIGITTE MADRIAN
University of Chicago
National Bureau of Economic Research (NBER)
"Why Did Employee Health Insurance Contributions Rise?"
JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
ROBIN MCKNIGHT
Massachusetts Institute of Technology (MIT)
Department of Economics
"The Importance of Group Coverage: How Tax Policy Shaped U.S.
Health Insurance"
MELISSA A. THOMASSON
Miami University of Ohio
National Bureau of Economic Research (NBER)
"Health Care Costs, Wages, and Aging"
LOUISE SHEINER
Board of Governors of the Federal Reserve System
National Bureau of Economic Research (NBER)
"How Demographic Change Will Drive Benefits Design"
MARJORIE HONIG
Hunter College CUNY
Department of Economics
IRENA DUSHI
International Longevity Center-USA, Ltd.
S S R N I N F O R M A T I O N
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N E W and F O R T H C O M I N G Articles
_________________________________________________________________
"Consumer Health Care Finances and Education: Matters of Values"
EBRI Issue Brief, No. 241, January 2002
BY: LOIS A. VITT
Institute for Socio-Financial Studies
JURG K. SIEGENTHALER
Institute for Socio-Financial Studies
LINDA SIEGENTHALER
Institute for Socio-Financial Studies
DEANNA M. LYTER
Institute for Socio-Financial Studies
JAMIE KENT
Institute for Socio-Financial Studies
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=298400
Contact: LOIS A. VITT
Email: Mailto:lvitt@crosslink.net
Postal: Institute for Socio-Financial Studies
14 S. Madison St.
P.O. Box 1824
Middleburg, VA 20118
Phone: 540-687-6080
Fax: 540-687-5353
Co-Auth: JURG K. SIEGENTHALER
Email: not available
Postal: Institute for Socio-Financial Studies
14 S. Madison St.
P.O. Box 1824
Middleburg, VA 20118
Co-Auth: LINDA SIEGENTHALER
Email: not available
Postal: Institute for Socio-Financial Studies
14 S. Madison St.
P.O. Box 1824
Middleburg, VA 20118
Co-Auth: DEANNA M. LYTER
Email: not available
Postal: Institute for Socio-Financial Studies
14 S. Madison St.
P.O. Box 1824
Middleburg, VA 20118
Co-Auth: JAMIE KENT
Email: not available
Postal: Institute for Socio-Financial Studies
14 S. Madison St.
P.O. Box 1824
Middleburg, VA 20118
Paper Requests:
Contact Alicia Willis at Mailto:publications@ebri.org, or 2121 K
St., NW, Suite 600, Washington, DC 20037-1896.
Phone:(202)572-7422, Fax:(202)775-6312. Full-Text downloads are
available from SSRN Online for $7.50.
ABSTRACT:
This Issue Brief analyzes recent literature about trends in the
employment-based health care benefits system, proposed
"market-driven" approaches to health care financing, and
implications for consumers of the effect of rising costs on
employment-based benefits. It examines the readiness of
consumers to become more responsible for making health care
financing decisions on their own. This is of particular concern
in light of research on population literacy levels and the
difficulty many people have in understanding the current health
care system and health insurance documentation. This report also
explores the availability of resources to help consumers become
literate and savvy in health care decision-making.
Keywords: Employment-based benefits, Health benefits
education, Health care costs, Health care financing, Health
insurance coverage, Health insurance attitudes and opinions
JEL Classification: D1, J32
______________________________
"Toward Full Mental Health Parity and Beyond"
Health Affairs, July/August 2001
BY: DANIEL P. GITTERMAN
University of North Carolina at Chapel Hill
Department of Public Policy
ROLAND STURM
RAND, Santa Monica
RICHARD M. SCHEFFLER
University of California, Berkeley
School of Public Health
Contact: DANIEL P. GITTERMAN
Email: Mailto:danielg@email.unc.edu
Postal: University of North Carolina at Chapel Hill
Department of Public Policy
CB# 3435
Abernathy Hall
Chapel Hill, NC 27599-3435 UNITED STATES
Phone: 919-843-6407
Fax: 919-962-5824
Co-Auth: ROLAND STURM
Email: Mailto:sturm@rand.org
Postal: RAND, Santa Monica
P.O. Box 2138
Santa Monica, CA 90407-2138 UNITED STATES
Co-Auth: RICHARD M. SCHEFFLER
Email: Mailto:rscheff@uclink4.berkeley.edu
Postal: University of California, Berkeley
School of Public Health
405 Warren Hall
Berkeley, CA 94720 UNITED STATES
ABSTRACT:
The 1996 Mental Health Parity Act (MHPA), which became effective
in January 1998, is scheduled to expire in September 2001. This
paper examines what the MHPA accomplished and steps toward more
comprehensive parity. We explain the strategic and
self-reinforcing link of parity with managed behavioral health
care and conclude that the current path will be difficult to
reverse. The paper ends with a discussion of what might be
behind the claims that full parity in mental health benefits is
insufficient to achieve true equity and whether additional steps
beyond full parity appear realistic or even desirable.
Keywords: mental health, parity, insurance
JEL Classification: I1, I11
______________________________
W O R K I N G P A P E R Abstracts
_________________________________________________________________
"Health Insurance, Labor Supply, and Job Mobility: A Critical
Review of the Literature"
BY: JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
BRIGITTE MADRIAN
University of Chicago
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=302578
Paper ID: NBER Working Paper No. W8817
Date: March 2002
Contact: JONATHAN GRUBER
Email: Mailto:gruberj@mit.edu
Postal: Massachusetts Institute of Technology (MIT)
Department of Economics
Room E52-355
50 Memorial Drive
Cambridge, MA 02142 UNITED STATES
Phone: 617-253-8892
Fax: 617-253-1330
Co-Auth: BRIGITTE MADRIAN
Email: Mailto:brigitte.madrian@gsb.uchicago.edu
Postal: University of Chicago
Graduate School of Business
1101 East 58th Street
Chicago, IL 60637 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
This paper provides a critical review of the empirical
literature on the relationship between health insurance, labor
supply, and job mobility. We review over 50 papers on this
topic, almost exclusively written in the last 10 years. We reach
five conclusions. First, there is clear and unambiguous evidence
that health insurance is a central determinant of retirement
decisions. Second, there is fairly clear evidence that health
insurance is not a major determinant of the labor supply and
welfare exit decisions of low income mothers. Third, there is
fairly compelling evidence that health insurance is an important
factor in the labor supply decisions of secondary earners.
Fourth, while there is some division in the literature, the most
convincing evidence suggests that health insurance plays an
important role in job mobility decisions. Finally, there is
virtually no evidence in the literature on the welfare
implications of these results. We present some rudimentary
calculations which suggest that the welfare costs of job lock
are likely to be modest. Our general conclusion is that health
insurance has important effects on both labor force
participation and job choice, but that it is not clear whether
or not these effects results in large losses of either welfare
or efficiency.
JEL Classification: I12, J32, J24
______________________________
"Why Did Employee Health Insurance Contributions Rise?"
BY: JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
ROBIN MCKNIGHT
Massachusetts Institute of Technology (MIT)
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=306412
Paper ID: NBER Working Paper No. W8878
Date: April 2002
Contact: JONATHAN GRUBER
Email: Mailto:gruberj@mit.edu
Postal: Massachusetts Institute of Technology (MIT)
Department of Economics
Room E52-355
50 Memorial Drive
Cambridge, MA 02142 UNITED STATES
Phone: 617-253-8892
Fax: 617-253-1330
Co-Auth: ROBIN MCKNIGHT
Email: Mailto:robinmck@MIT.EDU
Postal: Massachusetts Institute of Technology (MIT)
Department of Economics
50 Memorial Drive
Cambridge, MA 02142 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
We explore the causes of the dramatic rise in employee
contributions to health insurance over the past two decades. In
1982, 44% of those who were covered by their employer-provided
health insurance had their costs fully financed by their
employer, but by 1998 this had fallen to 28%. We discuss the
theory of why employers might shift premiums to their employees,
and empirically model the role of six factors suggested by the
theory. We find that there was a large impact of falling tax
rates, rising eligibility for insurance through the Medicaid
system and through spouses, and deteriorating economic
conditions (in the late 1980s and early 1990s). We also find
much more modest impacts of increased managed care penetration
and rising health care costs. Overall, this set of factors can
explain about one-quarter of the rise in employee premiums over
the 1982-1996 period.
JEL Classification: H2, I1, J3
______________________________
"The Importance of Group Coverage: How Tax Policy Shaped U.S.
Health Insurance"
BY: MELISSA A. THOMASSON
Miami University of Ohio
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=215768
Paper ID: NBER Working Paper No. W7543
Date: February 2000
Contact: MELISSA A. THOMASSON
Email: Mailto:thomasma@muohio.edu
Postal: Miami University of Ohio
Oxford, OH 45056 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
In 1954, the Internal Revenue Service stipulated that employer
contributions to the health insurance plans of their employees
were to be excluded from employee taxable income. Today, the tax
subsidy is major feature of the U.S. health care market. This
paper examines the initial effects of the tax subsidy on the
demand for health insurance using previously unexamined data
from 1953 and 1958. Results suggest that the tax subsidy
increased the growth of group insurance, particularly among
union members and employed persons. This is a critical effect
because group insurance is not only less expensive than
individual insurance, but it is also easier to obtain, and
households with access to group health insurance are far more
likely to purchase health insurance coverage than those without
similar access. By increasing access to group insurance, the tax
subsidy fostered an increase in the purchase of group health
insurance by people who may not have purchased individual
coverage, and generated institutional change as it cemented an
employment-based system of group health insurance in the United
States.
JEL Classification: H20, I10, N82
______________________________
"Health Care Costs, Wages, and Aging"
BY: LOUISE SHEINER
Board of Governors of the Federal Reserve System
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=165530
Other Electronic Document Delivery:
http://www.federalreserve.gov/pubs/workingpapers.htm
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Paper ID: Board of Governors of the Federal Reserve System FEDS
Paper No. 99-19
Date: January 14, 1999
Contact: LOUISE SHEINER
Email: Mailto:lsheiner@frb.gov
Postal: Board of Governors of the Federal Reserve System
20th and C Streets, NW
Washington, DC 20551 UNITED STATES
Paper Requests:
Please indicate the title and the FEDS paper number. Single
copies of FEDS papers may be obtained upon request from Ms.
Karen Blackwell, Mailto:frboard-web-site@frbog.frb.gov Postal:
Mail Stop 77, Federal Reserve Board, Washington, DC 20551.
Phone:(202) 452-2900. Fax:(202) 452-3819.
ABSTRACT:
While economists generally agree that workers pay for their
health insurance costs through reduced wages, there has been
little thought devoted to the level at which these costs are
passed on: Is each employee's wage reduced by the amount of his
or her own health costs, by the average health costs of
employees in the firm, or by some amount in between? This paper
analyzes one dimension of the question of how firms pass health
costs to workers. Using cross-city variation in health costs, I
test whether older workers pay for their higher health costs in
the form of lower wages. I find that in cities where health
insurance costs are high, the age/wage profile is flatter,
indicating that older workers do pay for their higher health
costs in the form of reduced wages. This finding is robust to
the inclusion of several other city-specific variables that
might also affect age/wage profiles and that could be correlated
with health insurance costs. I also find that workers who choose
family health insurance coverage pay for the added employer
costs through reduced wages.
JEL Classification: I1, J1, J3
______________________________
"How Demographic Change Will Drive Benefits Design"
BY: MARJORIE HONIG
Hunter College CUNY
Department of Economics
IRENA DUSHI
International Longevity Center-USA, Ltd.
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=294844
Date: December 2001
Contact: MARJORIE HONIG
Email: Mailto:mhonig@hunter.cuny.edu
Postal: Hunter College CUNY
Department of Economics
695 Park Avenue
New York, NY 10021 UNITED STATES
Phone: 212-772-5397
Fax: 212-772-5398
Co-Auth: IRENA DUSHI
Email: Mailto:irenad@ilcusa.org
Postal: International Longevity Center-USA, Ltd.
Research Department
60 East 86th Street
New York, NY 10028 UNITED STATES
ABSTRACT:
This paper examines the implications of an aging labor force and
its changing composition for worker demand for
employer-sponsored benefits. We estimate age- and
gender-specific probabilities of participation among workers
offered 401(k) plans, health insurance, and short- and long-term
disability insurance using data from the Survey of Employee
Benefits Supplement to the April 1993 Current Population
Survey.
We find that older women at all tenure levels, and older men
in new jobs, are more likely than middle-aged employees (ages
35-44) to hold balances in 401(k) plans. For both men and women,
older workers' demand for employer-sponsored health insurance is
substantially stronger than that of middle-aged workers in plans
that offer retiree insurance. Finally, men ages 45-54 are more
likely than their middle-age counterparts to elect short-term
disability insurance, while men nearing retirement are less
likely to opt for long-term disability coverage.
Based on these findings, we predict that the increasing
proportion of women in the labor force, and an aging labor force
overall, will increase demand for savings vehicles such as 401k
plans and for health insurance with provision for retiree
insurance. Demand is also likely to increase for short-term
disability coverage, but to decrease for long-term disability.