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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. 4, No. 4: February 27, 2003
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Publisher: LSN Employment, Labor, Compensation & Pension Journals
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Editor: PAMELA PERUN
Urban Institute
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Topic of This Issue:
Health Issues
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T A B L E of C O N T E N T S
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WORKING PAPERS
"Health Insurance Coverage and the Disability Insurance
Application Decision"
JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
JEFFREY D. KUBIK
Syracuse University
Department of Economics
"Education Versus Savings as Explanations for Better Health:
Evidence from the Health and Retirement Survey"
RICHARD IPPOLITO
George Mason University School of Law
"Disability and Employment: Reevaluating the Evidence in Light of
Reporting Errors"
BRENT KREIDER
Iowa State University
Department of Economics
JOHN V. PEPPER
University of Virginia
Department of Economics
"Portfolio Choice and Health Status"
HARVEY S. ROSEN
Princeton University
Department of Economics
CESifo (Center for Economic Studies and Ifo
Institute for Economic Research)
National Bureau of Economic Research (NBER)
STEPHEN WU
Hamilton College
Economics Department
"Incorporating Psychosocial Variables Into Health Care Policy: A
Behavioral Economic Examination of Medicaid Expansion"
BARAK D. RICHMAN
Harvard University
Law School
Federal Courthouse
"Health Policy Roundtable"
PRODUCTIVITY COMMISSION
Government of Australia
"Price and Spouse's Coverage in Employee Demand for Health
Insurance"
IRENA DUSHI
International Longevity Center-USA, Ltd.
MARJORIE HONIG
City University of New York (CUNY)
Department of Economics
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W O R K I N G P A P E R Abstracts
_________________________________________________________________
"Health Insurance Coverage and the Disability Insurance
Application Decision"
BY: JONATHAN GRUBER
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
JEFFREY D. KUBIK
Syracuse University
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=337222
Other Electronic Document Delivery:
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Paper ID: Center for Retirement Research Working Paper No.
2002-04
Date: September 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: JEFFREY D. KUBIK
Email: Mailto:JDKUBIK@MAXWELL.SYR.EDU
Postal: Syracuse University
Department of Economics
426 Eggers Hall
Syracuse, NY 13244-1020 UNITED STATES
ABSTRACT:
We investigate the effect of health insurance coverage on the
decision of individuals to apply for Disability Insurance (DI).
Those who qualify for DI receive public insurance under
Medicare, but only after a two-year waiting period. This raises
concerns that many disabled are going uninsured while they wait
for their Medicare coverage. Moreover, the combination of this
waiting period and the uncertainty about application acceptance
may deter those with health insurance on their jobs, but no
alternative source of coverage, from leaving work to apply for
DI.
Data from the Health and Retirement Survey show that, in fact,
uninsurance does not rise during the waiting period for DI
benefits; reductions in own employer coverage are small, and are
offset by increases in other sources of insurance.
Correspondingly, we find that imperfect insurance coverage does
deter DI application. Those who have an alternative source of
insurance coverage (coverage from a spouse's employer or retiree
coverage), are 26 to 74% more likely to apply for DI than those
without such an alternative. Thus, limiting this waiting period
would not increase the insurance coverage of the disabled in the
U.S., but it would significantly increase applications to the DI
program.
JEL Classification: I38, J64, J65
______________________________
"Education Versus Savings as Explanations for Better Health:
Evidence from the Health and Retirement Survey"
BY: RICHARD IPPOLITO
George Mason University School of Law
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=377862
Paper ID: George Mason Law & Economics Research Paper No. 03-04
Contact: RICHARD IPPOLITO
Email: Mailto:rippolit@gmu.edu
Postal: George Mason University School of Law
3301 N. Fairfax Drive
Arlington, VA 22201 UNITED STATES
Phone: 703-993-8243
Fax: 713-993-8124
Paper Requests:
Contact Allen Moye, Associate Director for Public Services,
George Mason University School of Law Library, 3301 North
Fairfax Drive, Arlington, VA 22201. Phone:(703)993-8062.
Fax:(703) 993-8113. Mailto:amoye@gmu.edu
ABSTRACT:
The paper reports on the results of a study of the health status
of 4,917 middle age couples in the HRS. The main finding is that
savings propensity appears to be a key component to health
outcome. Savers make consumption choices that improve their
health, accumulate fewer ailments and enjoy lower mortality
rates. The results are consistent with either Becker-Mulligan
who posit that education makes individuals more forward looking,
or Fuchs who hypothesizes that individuals with lower rates of
time preference select themselves into higher levels of
education.
While education as such matters less after inclusion of
savings and other variables, it still affects choices about
consumption that affects health, though its effect is not
explained by better information. It also affects the rate of ill
health, holding constant consumption decisions and existing
maladies. If the family's investment behavior importantly
influences health outcome, then longer long-term improvements in
overall health may depend less on improved flows of health
information, and more on a gradual spread of a longer-term
outlook among larger portions of the population. Whether
far-sighted behavior is learned in the family or through the
education process is an important and open question.
Keywords: health, education
JEL Classification: I2, I21
______________________________
"Disability and Employment: Reevaluating the Evidence in Light of
Reporting Errors"
BY: BRENT KREIDER
Iowa State University
Department of Economics
JOHN V. PEPPER
University of Virginia
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=337224
Other Electronic Document Delivery:
http://www.bc.edu/centers/crr/dummy/papers/wp_2002-06.
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Paper ID: Center for Retirement Research Working Paper No.
2002-06
Date: September 2002
Contact: BRENT KREIDER
Email: Mailto:bkreider@iastate.edu
Postal: Iowa State University
Department of Economics
260 Heady Hall
Ames, IA 50011 UNITED STATES
Co-Auth: JOHN V. PEPPER
Email: Mailto:jvp3m@virginia.edu
Postal: University of Virginia
Department of Economics
114 Rouss Hall
P.O. Box 400182
Charlottesville, VA 22904-4182 UNITED STATES
Paper Requests:
Contact Amy Chasse, Communications Specialist, Center for
Retirement Research, Boston College, Fulton Hall 550, Chestnut
Hill, MA 02467-3808. Phone: (617)552-6783. Fax: (617)552-1750.
Mailto:chassea@bc.edu
ABSTRACT:
Long-standing debates about relationships between labor supply
behavior and health status among persons nearing retirement age
have centered largely on disagreements about the reliability of
self-reported health indicators. In light of reporting errors in
work capacity, this paper considers the problem of predicting
how employment rates vary with disability status when "true"
disability is unobserved. Rather than imposing the strong
assumptions required to obtain point identification, we take a
step back to evaluate what can be inferred under a variety of
assumptions that are weaker but arguably more credible than
those imposed in the existing literature. Although these
assumptions do not identify the conditional employment rates
except in special cases, nonparametric bounds for these
parameters can be obtained. Using data from the Health and
Retirement Study, we estimate a set of bounds that formalize the
identifying power of a number of different assumptions that
appear to have broad consensus in the literature. Our results
suggest that models estimated under the assumption of fully
accurate reporting lead to biased inferences. In particular, it
appears that nonworkers tend to overreport disabilities.
JEL Classification: I120, J64, J65
______________________________
"Portfolio Choice and Health Status"
BY: HARVEY S. ROSEN
Princeton University
Department of Economics
CESifo (Center for Economic Studies and Ifo
Institute for Economic Research)
National Bureau of Economic Research (NBER)
STEPHEN WU
Hamilton College
Economics Department
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=375305
Paper ID: NBER Working Paper No. W9453
Date: January 2003
Contact: HARVEY S. ROSEN
Email: Mailto:hsr@princeton.edu
Postal: Princeton University
Department of Economics
001 Fisher Hall
Princeton, NJ 08544 UNITED STATES
Co-Auth: STEPHEN WU
Email: Mailto:SWU@HAMILTON.EDU
Postal: Hamilton College
Economics Department
198 College Hill Road
Clinton, NY 13323 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
This paper analyzes the role that health status plays in
household portfolio decisions using data from the Health and
Retirement Study. The results indicate that health is a
significant predictor of both the probability of owning
different types of financial assets and the share of financial
wealth held in each asset category. Households in poor health
are less likely to hold risky financial assets, other things
(including the level of total wealth) being the same. Poor
health is associated with a smaller share of financial wealth
held in risky assets and a larger share in safe assets. We find
no evidence that the relationship between health status and
portfolio allocation is driven by 'third variables' that
simultaneously affect health and financial decisions. Further,
the relationship between health status and portfolio choice does
not appear to operate through the effect of poor health on
individuals' attitudes toward risk, their planning horizons, or
their health insurance status.
JEL Classification: G11, I19
______________________________
"Incorporating Psychosocial Variables Into Health Care Policy: A
Behavioral Economic Examination of Medicaid Expansion"
BY: BARAK D. RICHMAN
Harvard University
Law School
Federal Courthouse
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=359683
Date: October 1, 2002
Contact: BARAK D. RICHMAN
Email: Mailto:bdrichma@post.harvard.edu
Postal: Harvard University
Law School
1575 Massachusetts Avenue
Cambridge, MA 02138 UNITED STATES
ABSTRACT:
This paper incorporates a survey of psychosocial variables into
a formal economic model of health care consumption. It suggests
that consulting the literature in health psychology and
intertemporal decision theory provides valuable material to
explain certain findings in health econometrics. More
significant, the lessons from this behavioral economic approach
is particularly useful to Medicaid policymakers, who largely
have neglected psychosocial variables in implementing a health
insurance program that rests chiefly on orthodox economic
assumptions.
The paper's chief contributions include an expansion of the
behavioral economic approach to include a host of variables in
health psychology, a behavioral refinement of empirical health
economics, and a behavioral critique of Medicaid policy.
Keywords: Behavioral Economics, Health Economics, Health Care,
Health Policy, Medicaid
JEL Classification: H51, I12, I18, I38, J24, Z13
______________________________
"Health Policy Roundtable"
BY: PRODUCTIVITY COMMISSION
Government of Australia
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=322384
Other Electronic Document Delivery:
http://www.pc.gov.au/research/confproc/healthpolicy/he
althpolicy.pdf
SSRN only offers technical support for papers
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Paper ID: Productivity Commission Working Paper No. 1710
Date: March 2002
Contact: PRODUCTIVITY COMMISSION
Email: Mailto:MAPS@PC.GOV.AU
Postal: Government of Australia
Productivity Commission
Level 28, 35 Collins St.
Melbourne, Victoria, 3000 AUSTRALIA
Paper Requests:
Contact Daniella Hanek at Mailto:dhanek@pc.gov.au Postal:
Productivity Commission, Media and Publications Department,
Level 28, 35 Collins St, Melbourne, Victoria 3000, Australia.
Phone: 61 3 9653 2244. Fax: 61 3 9653 2303. Fee Charged.
ABSTRACT:
Proceedings of a conference organised by the Productivity
Commission and the Melbourne Institute of Economic and Social
Research held on 7-8 March 2002 to explore key policy issues
facing Australia's health sector. The Roundtable drew together
thirty leading practitioners and analysts on health policy
issues. The topics covered included international developments
in health policy, cost pressures in health care systems, access
and service delivery, supplier-induced demand and occupational
regulation.
Keywords: supplier induced demand, health, access, health care
JEL Classification: I
______________________________
"Price and Spouse's Coverage in Employee Demand for Health
Insurance"
BY: IRENA DUSHI
International Longevity Center-USA, Ltd.
MARJORIE HONIG
City University of New York (CUNY)
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=362580
Contact: MARJORIE HONIG
Email: Mailto:MHONIG@HUNTER.CUNY.EDU
Postal: City University of New York (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:
The decline in health insurance coverage over the last two
decades is a matter of national concern. The vast majority of
insured individuals under age 65 obtain this coverage from their
employer or as a dependent of a family member with
group-sponsored health insurance. Recent evidence suggests that
the decrease in coverage among full-time workers has resulted
not so much from declining employer offers but rather from
reduced take-up. The reasons for this change in employee
behavior are not yet understood. Resolving this question is
important for public policy because the two most likely
explanations - the rise in employee insurance premiums and the
increase in spousal coverage over this period - have different
policy implications.
We pool data from five supplements to the Current Population
Survey covering the period 1988-2001 to examine the roles of
insurance price and spousal coverage in decisions to elect
employer-based coverage. We estimate the demand for
employer-based health insurance among eligible workers as a
function of price (measured as employee's share of total premium
costs), firm size, employee characteristics, labor force status
of spouses and, among working spouses, coverage under own
employer plans. We find that the decisions of eligible full-time
wage and salaried married workers to elect coverage are
significantly influenced both by the costs of their own plans
and by whether their spouses are covered under their own
employment-based plans. We also find that women are considerably
more responsive than men to both cost and spouses' coverage.
Our findings provide the first evidence that price matters in
the take-up decisions of full-time married workers, and that
part of the decline in take-up in recent years may be attributed
to the increasing cost of insurance. This decline is also
explained, however, by the increase in the proportion of
full-time workers whose spouses are covered under their own
employer plans. Whether this latter trend is itself an outcome
of rising insurance price remains to be determined.