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SOCIAL SCIENCE RESEARCH NETWORK
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. 8, No. 6: February 15, 2007
Editor: PAMELA J. PERUN
Urban Institute
PAMELA@PLANETNOW.COM
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Topic of This Issue:
Healthcare
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T A B L E O F C O N T E N T S
"Pay or Play Laws, Erisa Preemption, and Potential Lessons from
Massachusetts"
AMY MONAHAN
University of Missouri at Columbia - School of Law
"Health Insurance Coverage of the Near Elderly, 1994-2005"
PAUL FRONSTIN
Employee Benefit Research Institute (EBRI)
"The Moral Foundations of Health Insurance"
JENNIFER PRAH RUGER
Yale University - School of Medicine
"Distributive Injustice(s) in American Health Care"
CLARK C. HAVIGHURST
Duke University School of Law
BARAK D. RICHMAN
Duke University School of Law
"Cross-Cohort Differences in Health on the Verge of Retirement"
BETH SOLDO
Affiliation Unknown
OLIVIA S. MITCHELL
University of Pennsylvania - Insurance & Risk Management
Department, National Bureau of Economic Research (NBER)
RANIA TFAILY
Carleton University
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"Pay or Play Laws, Erisa Preemption, and Potential Lessons from
Massachusetts"
U of Missouri-Columbia School of Law Legal Studies Research
Paper No. 2007-02
Kansas Law Review, Vol. 55, 2007
Contact: AMY MONAHAN
University of Missouri at Columbia - School of Law
Email: monahana@missouri.edu
Auth-Page: http://ssrn.com/author=383034
Full Text: http://ssrn.com/abstract=960554
ABSTRACT: Many states are seeking to involve employers in health
care reform efforts through the use of pay or play laws. Under
such laws, employers can either play by providing health
insurance to their employees in accordance with state standards,
or pay a monetary fee to the state. As part of its comprehensive
health reform, Massachusetts became the first state to implement
such a law. This article examines whether the two Massachusetts
pay or play laws are likely to be preempted by the Employee
Retirement Income Security Act of 1974. The article argues that
the fair share contribution, which imposes a maximum annual $295
per employee fee on employers that do not make a fair and
reasonable contribution to employee health care should survive a
preemption challenge, on the basis that the fee functions as an
indirect economic incentive that is not significant enough to
create a Hobson's choice for employers. The article also examines
the Massachusetts free rider surcharge, which imposes a fee on
employers whose employees access free state health care above a
given threshold and who do not offer employees the ability to pay
health insurance premiums on a pre-tax basis through a cafeteria
plan. The article concludes that the free rider surcharge is also
likely to survive an ERISA preemption challenge, on the basis
that the required cafeteria plan is not, by itself, an ERISA
plan, and need not involve any plan governed by ERISA. Given the
conclusion that these two Massachusetts pay or play laws are
likely to survive ERISA preemption, the article considers what
contribution the Massachusetts employer provisions are likely to
make to fundamental health care reform.
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"Health Insurance Coverage of the Near Elderly, 1994-2005"
EBRI Notes, Vol. 28, No. 1, January 2007
Contact: PAUL FRONSTIN
Employee Benefit Research Institute (EBRI)
Email: FRONSTIN@EBRI.ORG
Auth-Page: http://ssrn.com/author=255140
Full Text: http://ssrn.com/abstract=959010
ABSTRACT: This paper presents Employee Benefit Research Institute
(EBRI) estimates from the U.S. Census Bureau's March 2006 Current
Population Survey on the health insurance status of the near
elderly, adults ages 55-64. The findings reveal that the near
elderly were one of two groups (the other was children) most
likely to have health insurance coverage in 2005. Older adults
are not only the least likely group of nonelderly adults to be
uninsured, but they were also no more likely to have been
uninsured in 2005 than they were in 2000, and they are only
slightly more likely to be uninsured as compared with 1995.
However, future retired adults ages 55-64 may experience an
increase in the likelihood of being uninsured if employer
cutbacks to retiree health benefits affect them and they have no
other means of obtaining health insurance. In addition, the size
of the uninsured population ages 55-64 may also grow as the baby
boom generation ages. Expected trends have implications for
policy proposals aimed at increasing health insurance coverage
among adults ages 55-64.
The PDF for the above title, published in the January 2007 issue
of EBRI Notes, also contains the fulltext of another January 2007
EBRI Notes article abstracted on SSRN: "IRA Assets,
Contributions, and Market Share."
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"The Moral Foundations of Health Insurance"
Quarterly Journal of Medicine, Vol. 100, No. 1, pp. 53-57,
January 2007
Contact: JENNIFER PRAH RUGER
Yale University - School of Medicine
Email: jennifer.ruger@yale.edu
Auth-Page: http://ssrn.com/author=670462
Full Text: http://ssrn.com/abstract=957971
ABSTRACT: The US and numerous developing countries do not provide
universal health insurance coverage to their populations.
Academic approaches to health insurance have typically adopted a
neo-classical economic perspective, assuming that individuals
make rational decisions to maximize their preferred outcomes, and
businesses (including insurance companies) make rational
decisions to maximize profits. In this approach, individuals who
are risk-averse will purchase health insurance to reduce
variation in the costs of health care between healthy and sick
periods. In empirical studies, however, individuals do not always
make rational choices. They also find it difficult to assess
their health risks and to know how much insurance they need.
By contrast, medical ethics has focused on the issue of equal
access to health care, but provided little in the way of
philosophical justification for risk management through health
insurance per se. Nor has it shown how the practice whereby many
at-risk individuals pay premiums to cover one individual's
expensive health outcome ("risk-pooling"), is ethically
desirable, except insofar as it ensures equal access to health
care and equal income to purchase it for all contributors.
This article offers an alternative moral framework for analysing
health insurance: that universal health insurance is essential
for human flourishing. The central ethical aims of universal
health insurance coverage are to keep people healthy, and to
enhance their security by protecting them from both ill health
and its economic consequences, issues not adequately considered
to date.
Universal health insurance coverage requires redistribution
through taxation, and so individuals in societies providing this
entitlement must voluntarily embrace sharing these costs. This
redistribution is another ethical aim of universal health
insurance unaddressed by other frameworks. This article is part
of an alternative approach to health and social justice, offered
here and elsewhere, that builds on and integrates Aristotle's
political theory and Amartya Sen's capability approach.
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"Distributive Injustice(s) in American Health Care"
Duke Law School Legal Studies Paper No. 140
Law and Contemporary Problems, Vol. 69, No. 4, 2006
Contact: CLARK C. HAVIGHURST
Duke University School of Law
Email: hav@law.duke.edu
Auth-Page: http://ssrn.com/author=139014
Co-Author: BARAK D. RICHMAN
Duke University School of Law
Email: richman@law.duke.edu
Auth-Page: http://ssrn.com/author=334149
Full Text: http://ssrn.com/abstract=959643
ABSTRACT: This article explores the hypothesis that the U.S.
health care system operates more like a robber baron than like
Robin Hood, burdening ordinary payers of health insurance
premiums disproportionately for the benefit of industry interests
and higher-income consumer-taxpayers. Thus, lower- and
middle-income Americans with health coverage pay not only for
their own families' health care but also to support a vast health
care enterprise that primarily benefits others, including many
far more affluent than themselves. The system is able to finance
itself in part because U.S.-style health insurance greatly
amplifies price-gouging opportunities for health care firms with
market power, creating a cost burden that falls ultimately on all
premium payers equally, like a severely regressive head tax.
Moreover, these same consumers also bear excessive costs for
their own health care because, not seeing the costs they bear
with any clarity (since the tax system makes those costs appear
to fall on their employers rather than themselves), they demand
unnecessarily costly coverage and resist efforts to economize -
all to the benefit of the health care industry and others with
reasons to value high-cost medicine. Lower-income insureds also
appear, for several reasons, to get less out of their employers'
health plans than their higher-income coworkers, despite paying
the same premiums. Finally, insured individuals' lack of
cost-consciousness also affects their attitudes and behavior as
citizens and as voters, enabling politicians as well as industry
interests to make choices on their behalf that systematically
raise costs and foreclose economizing possibilities. The burden
of excess health care costs and how it is distributed is rarely
recognized as the fundamental issue of social justice it is. The
purpose of this article is to make the question who pays and who
benefits a principal concern of health policymakers.
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"Cross-Cohort Differences in Health on the Verge of Retirement"
NBER Working Paper No. W12762
Author: BETH SOLDO
Affiliation Unknown
Auth-Page: http://ssrn.com/author=726174
Contact: OLIVIA S. MITCHELL
University of Pennsylvania - Insurance & Risk
Management Department, National Bureau of Economic
Research (NBER)
Email: mitchelo@wharton.upenn.edu
Auth-Page: http://ssrn.com/author=41556
Co-Author: RANIA TFAILY
Carleton University
Email: rania.tfaily@carleton.ca
Auth-Page: http://ssrn.com/author=687169
Full Text: http://ssrn.com/abstract=951918
ABSTRACT: Baby Boomers have left a unique imprint on US culture
and society in the last 60 years, and it might be anticipated
that they will also put their own stamp on retirement, the last
phase of the life cycle. Yet because Boomers have not all fully
retired, we cannot yet judge how they will fare as retirees.
Instead, we focus on how this group compares with prior groups on
the verge of retirement, that is, at ages 51-56. Accordingly,
this chapter evaluates the stock of health which Early Boomers
bring to retirement and compare these to the circumstances of two
prior cohorts at the same point in their life cycles. Using three
sets of responses from the Health and Retirement Study, we find
some interesting patterns. Overall, the raw evidence indicates
that Boomers on the verge of retirement are in poorer health
their counterparts 12 years ago. Using a summary health index
designed for this study, we find that those born 1948 to 1953
share health risks with the War Baby cohort. This suggests that
most of the health decline instead began before the late 1940's.
A more complex set of health conclusions emerges from the
specific self-reported health measures. Boomers indicate they
have relatively more difficulty with a range of everyday physical
tasks, but they also report having more pain, more chronic
conditions, more drinking and psychiatric problems, than their
HRS earlier counterparts. This trend portends poorly for the
future health of Boomers as they age and incur increasing costs
associated with health care and medications. Using our health
index, only those at the 75th percentile or higher are likely to
be characterized as having good or better health.
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