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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. 19: October 9, 2003
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Publisher: LSN Employment, Labor, Compensation & Pension Journals
a division of
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Editor: PAMELA PERUN
Urban Institute
Mailto:pamela@planetnow.com
Copyright: SSEP, Inc. 2003. All rights reserved.
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Topic of This Issue:
Healthcare Issues
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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
"The Onset of Health Problems and the Propensity of Workers to
Change Employers and Occupations"
Growth and Change, Vol. 34, pp. 276-298, August 2003
JODI MESSER PELKOWSKI
Wichita State University
MARK C. BERGER
University of Kentucky
Institute for the Study of Labor (IZA)
"Health Insurance Costs and Early Retirement Decisions"
Industrial & Labor Relations Review, Vol. 56, No. 4, July
2003
RICHARD W. JOHNSON
Urban Institute
AMY J. DAVIDOFF
Urban Institute - Health Policy Center
KEVIN PERESE
U. S. Congressional Budget Office (CBO) - Long-Term
Modeling Group
"ERISA Takes a Drubbing: Rush Prudential and its Implications for
Health Care"
Tort Trial & Insurance Practice Law Journal, Vol. 38, pp.
933-961, 2003
E. HAAVI MORREIM
University of Tennessee, Memphis
College of Medicine
"Evidence-Based Medicine: Implications for Consumer-Driven Health
Benefits"
EBRI Notes, Vol. 24, No. 8, August 2003
JIM JAFFE
Employee Benefit Research Institute (EBRI)
WORKING PAPERS
"The Magnitude and Nature of Risk Selection in Employer-Sponsored
Health Plans"
SEAN NICHOLSON
University of Pennsylvania
The Wharton School
National Bureau of Economic Research (NBER)
M. KATE BUNDORF
Stanford University School of Medicine - Department
of Health Research and Policy
National Bureau of Economic Research (NBER)
REBECCA M. STEIN
University of Pennsylvania
Department of Economics
DANIEL POLSKY
University of Pennsylvania
School of Medicine
"The Effects of Offering Health Plan Choice within
Employment-Based Purchasing Groups"
M. KATE BUNDORF
Stanford University School of Medicine - Department
of Health Research and Policy
National Bureau of Economic Research (NBER)
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N E W and F O R T H C O M I N G Articles
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"The Onset of Health Problems and the Propensity of Workers to
Change Employers and Occupations"
Growth and Change, Vol. 34, pp. 276-298, August 2003
BY: JODI MESSER PELKOWSKI
Wichita State University
MARK C. BERGER
University of Kentucky
Institute for the Study of Labor (IZA)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=436855
Contact: JODI MESSER PELKOWSKI
Email: Mailto:jodi.messer@wichita.edu
Postal: Wichita State University
Wichita, KS 67260-0078 UNITED STATES
Co-Auth: MARK C. BERGER
Email: Mailto:MBERGER@POP.UKY.EDU
Postal: University of Kentucky
Department of Economics
335 Gatton Building
Lexington, KY 40546 UNITED STATES
ABSTRACT:
Although many studies have investigated how poor health affects
hours of work and labor force participation, few have examined
the extent to which individuals adapt in order to remain in the
labor market. Individuals experiencing health problems may move
to different types of work in order to remain in the labor force
or to reduce the negative labor market consequences of illness.
This paper investigates the movement between employers, and
among occupation categories when changing employers, using data
from the Health and Retirement Study (HRS). One advantage of the
HRS is that its questions on life-cycle employment and health
patterns permit a long-term perspective on job mobility that is
unavailable in most other datasets. Workers with health problems
are more likely than healthy workers to remain with their
current employer than to switch employers. But among those who
switch employers, those with health problems are more likely to
change broad occupational categories than are healthy workers.
While many individuals remain with the same employer after the
onset of health problems, many do switch employers and
occupations, even in the presence of ADA legislation.
______________________________
"Health Insurance Costs and Early Retirement Decisions"
Industrial & Labor Relations Review, Vol. 56, No. 4, July
2003
BY: RICHARD W. JOHNSON
Urban Institute
AMY J. DAVIDOFF
Urban Institute - Health Policy Center
KEVIN PERESE
U. S. Congressional Budget Office (CBO) - Long-Term
Modeling Group
Contact: RICHARD W. JOHNSON
Email: Mailto:Rjohnson@ui.urban.org
Postal: Urban Institute
2100 M Street, NW
Washington, DC 20037 UNITED STATES
Phone: 202-261-5541
Fax: 202-833-4388
Co-Auth: AMY J. DAVIDOFF
Email: Mailto:adavidof@ui.urban.org
Postal: Urban Institute - Health Policy Center
2100 M Street, NW
Washington, DC 20037 UNITED STATES
Co-Auth: KEVIN PERESE
Email: Mailto:kevin.perese@cbo.gov
Postal: U. S. Congressional Budget Office (CBO) - Long-Term
Modeling Group
Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515-6925 UNITED STATES
ABSTRACT:
The loss of health insurance may be an important component of
the cost of retirement, especially for workers without retiree
health insurance coverage. The authors find that insurance costs
significantly reduce retirement rates for full-time wage and
salary workers ages 51 to 61. Simulations suggest that a $1,000
increase in the net present value of health insurance premium
costs reduces the probability of early retirement by 0.17
percentage points for men and by 0.24 percentage points for
women, corresponding to elasticities of –0.22 and –0.24,
respectively. The authors' models predict that expanding the
Medicare program to cover those ages 62 to 64 would increase
retirement rates for workers with employer-sponsored coverage
who lack retiree benefits, if the government subsidizes their
coverage. However, the impact would be small, increasing overall
retirement rates by only 7%.
Keywords: retirement, retiree health insurance
JEL Classification: J2, J3
______________________________
"ERISA Takes a Drubbing: Rush Prudential and its Implications for
Health Care"
Tort Trial & Insurance Practice Law Journal, Vol. 38, pp.
933-961, 2003
BY: E. HAAVI MORREIM
University of Tennessee, Memphis
College of Medicine
Contact: E. HAAVI MORREIM
Email: Mailto:hmorreim@utmem.edu
Postal: University of Tennessee, Memphis
College of Medicine
956 Court Avenue
Suite B324
Memphis, TN 38163 UNITED STATES
Phone: 901-448-5686
ABSTRACT:
In a decision carrying potentially enormous financial
ramifications throughout the health care industry, the Supreme
Court held in Rush Prudential, Inc. v. Moran that ERISA does not
preempt state laws that permit or require independent reviewers
to resolve disputes about medical necessity. Although the Court
seems content that its decision will cause only minimal
administrative burdens to health plans and will not create any
more financial imposition than any other state mandated benefit,
a closer analysis suggests far more sobering implications both
for health plans and for ERISA itself. The Court has endorsed a
procedural remedy that adds to ERISA's exclusively federal
remedies; it has permitted independent reviewers essentially to
replace the role of ERISA's fiduciaries in ways that appear to
ignore if not outright contradict the statute; and, by
permitting "medical necessity" to be interpreted in ways that
need not even refer to the plan's own terms, the Court may well
have substantially reduced employers' ability to predict and
control the cost of employee benefits, a need that the Court
itself has acknowledged is integral to the goals of ERISA.
______________________________
"Evidence-Based Medicine: Implications for Consumer-Driven Health
Benefits"
EBRI Notes, Vol. 24, No. 8, August 2003
BY: JIM JAFFE
Employee Benefit Research Institute (EBRI)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=439880
Other Electronic Document Delivery:
http://www.ebri.org
SSRN only offers technical support for papers
downloaded from the SSRN Electronic Paper Collection
location. When URLs wrap, you must copy and paste
them into your browser eliminating all spaces.
Contact: JIM JAFFE
Email: Mailto:jaffe@ebri.org
Postal: Employee Benefit Research Institute (EBRI)
Suite 600
2121 K Street, NW
Washington, DC 20037-1896 UNITED STATES
Phone: 202-775-6353
Fax: 202-775-6312
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:
Most medical experts agree that America's health care system
would better serve providers, patients, and payers if more of
the medicine practiced were grounded in science. However,
extending the influence of "evidence-based medicine" is a
daunting challenge. In this paper, a number of health experts
and policymakers discuss the effects of evidence-based medicine
on health care quality and affordability and its implications
for consumer-driven health benefits. The paper is based on
presentations made at the Employee Benefit Research Institute's
May 2003 policy forum.
Keywords: Employment-based benefits, Health care cost
containment, Health care delivery, Health care quality, Health
insurance
JEL Classification: I11
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W O R K I N G P A P E R Abstracts
_________________________________________________________________
"The Magnitude and Nature of Risk Selection in Employer-Sponsored
Health Plans"
BY: SEAN NICHOLSON
University of Pennsylvania
The Wharton School
National Bureau of Economic Research (NBER)
M. KATE BUNDORF
Stanford University School of Medicine - Department
of Health Research and Policy
National Bureau of Economic Research (NBER)
REBECCA M. STEIN
University of Pennsylvania
Department of Economics
DANIEL POLSKY
University of Pennsylvania
School of Medicine
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=439618
Paper ID: NBER Working Paper No. W9937
Date: September 2003
Contact: SEAN NICHOLSON
Email: Mailto:NICHOLSS@WHARTON.UPENN.EDU
Postal: University of Pennsylvania
The Wharton School
3641 Locust Walk
Philadelphia, PA 19104-6365 UNITED STATES
Phone: 215-898-9403
Fax: 215-573-2157
Co-Auth: M. KATE BUNDORF
Email: Mailto:bundorf@stanford.edu
Postal: Stanford University School of Medicine - Department of
Health Research and Policy
HRP Redwood Building, Room 257
Stanford, CA 94305 UNITED STATES
Co-Auth: REBECCA M. STEIN
Email: Mailto:rstein2@ssc.upenn.edu
Postal: University of Pennsylvania
Department of Economics
3718 Locust Walk
Philadelphia, PA 19104 UNITED STATES
Co-Auth: DANIEL POLSKY
Email: Mailto:polsky@mail.med.upenn.edu
Postal: University of Pennsylvania
School of Medicine
423 Guardian Drive
Philadelphia, PA 19104 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
Most existing studies of risk selection in the
employer-sponsored health insurance market are case studies of a
single employer or of an employer coalition in a single market.
We examine risk selection in the employer-sponsored market by
applying a 'switcher' methodology to a national, panel data set
of enrollees in employer-sponsored health plans. We find that
people who switched from a non-HMO to an HMO plan used 11
percent fewer medical services in the period prior to switching
than people who remained in the non-HMO plan, and that this
relatively low use persists once they enroll in an HMO.
Furthermore, people who switch from an HMO to a non-HMO plan
used 18 percent more medical services in the period prior to
switching than those who remained in an HMO plan. HMOs would
most likely continue to experience favorable risk selection if
employers adjusted health plan payments based on enrollees'
gender and age because the selection appears to occur based on
enrollee characteristics that are difficult to observe such as
preferences for medical care and health status.
JEL Classification: I11
______________________________
"The Effects of Offering Health Plan Choice within
Employment-Based Purchasing Groups"
BY: M. KATE BUNDORF
Stanford University School of Medicine - Department
of Health Research and Policy
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=450897
Paper ID: NBER Working Paper No. W9996
Date: September 2003
Contact: M. KATE BUNDORF
Email: Mailto:bundorf@stanford.edu
Postal: Stanford University School of Medicine - Department of
Health Research and Policy
HRP Redwood Building, Room 257
Stanford, CA 94305 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
Over the last two decades, employers have increasingly offered
workers a choice of health plans. The availability of choice has
the potentially beneficial effects of lowering the cost and
increasing the quality of health care through greater
competition among health plans for enrollees as well as allowing
consumers to enroll in the type of coverage that most closely
matches their preferences. On the other hand, concerns about the
potential for adverse selection within employment-based
purchasing in response to the availability of choice exist. In
this paper, I examine the effects of offering choice in
employment-based purchasing groups on access to and the cost of
employer-sponsored coverage. I find that greater availability of
choice was associated with a reduction in the premium of
employer-sponsored coverage and an increase in the proportion of
workers covered by the plans offered by employers. However, most
of the premium reductions were due to a shift from family to
single coverage within employment-based purchasing groups and a
reduction in the generosity of the plans in which employees were
enrolled. The results are not consistent with the availability
of choice leading to lower premiums through greater competition
among plans for workers.