Health Care/title> </head> <body> <br/> SOCIAL SCIENCE RESEARCH NETWORK<br/> <br/> EMPLOYEE BENEFITS, COMPENSATION & PENSION LAW ABSTRACTS<br/> Sponsored by Pension Governance, LLC<br/> Vol. 8, No. 31: September 13, 2007<br/> <br/> Editor: PAMELA J. PERUN<br/> Policy Director, Aspen Institute - Initiative on<br/> Financial Security<br/> <a href="mailto:PAMELA@PLANETNOW.COM">PAMELA@PLANETNOW.COM</a><br/> ______________________________ <div style="direction:ltr"> <wbr>______________________________<wbr>_____<br/> <br/> BROWSE all abstracts in this subject:<br/> <a href="http://www.ssrn.com/link/benefits-compensation-pension-law.html" target="_blank">http://www.ssrn.com/link<wbr>/benefits-compensation-pension<wbr>-law.html</a><br/> <br/> SEARCH entire eLibrary at: <a href="http://ssrn.com/search" target="_blank">http://ssrn.com/search</a><br/> <br/> If this document is misaligned, please set type face to a<br/> non-proportional font such as Courier 10.<br/> ______________________________<wbr>______________________________<wbr>_____<br/> <br/> Pension Governance, LLC is an independent information and<br/> business consulting services and research/analysis company for<br/> the pension community. 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To learn more, please visit<br/> <a href="http://www.pensiongovernance.com/" target="_blank">http://www.pensiongovernance<wbr>.com</a>,<br/> <a href="http://www.pensionriskmatters.com/" target="_blank">http://www.pensionriskmatters<wbr>.com</a> (blog) and<br/> <a href="http://www.pensionlitigationdata.com/" target="_blank">http://www.pensionlitigationda<wbr>ta.com</a>.<br/> <br/> Topic of This Issue:<br/> Health Care<br/> ______________________________<wbr>______________________________<wbr>_____<br/> <br/> T A B L E O F C O N T E N T S<br/> <br/> "Modeling Employee Choice of Health Plan"<br/> CAROLINE CARLIN<br/> University of Minnesota - Department of Applied<br/> Economics<br/> ROBERT J. TOWN<br/> University of Minnesota - Twin Cities - School of Public<br/> Health, National Bureau of Economic Research (NBER)<br/> <br/> "Premium Growth between 1997 and 2004 and its Effect on<br/> Employer-Sponsored Insurance"<br/> THOMAS M. SELDEN<br/> Agency for Healthcare Research and Quality (AHRQ)<br/> JESSICA PRIMOFF VISTNES<br/> U.S. Department of Health and Human Services - Agency<br/> for Healthcare Research & Quality (AHRQ) - Center for<br/> Financing, Access & Cost Trends<br/> <br/> "Demand for High-Deductible and 'Consumer-Directed' Health Plans"<br/> MELINDA BEEUWKES BUNTIN<br/> The RAND Corporation<br/> ROLAND D. MCDEVITT<br/> Watson Wyatt Worldwide<br/> HAYOUNG PARK<br/> RAND Corporation<br/> CHERYL DAMBERG<br/> RAND Corporation<br/> RYAN LORE<br/> Watson Wyatt Worldwide - Watson Wyatt & Company<br/> <br/> "Benefit Limits for Behavioral Health Care in Private US Health<br/> Plans"<br/> DOMINIC HODGKIN<br/> Brandeis University<br/> CONSTANCE HORGAN<br/> Brandeis University<br/> DEBORAH GARNICK<br/> Brandeis University<br/> ELIZABETH MERRICK<br/> Brandeis University<br/> <br/> "State Health Insurance Mandates, Consumer Directed Health Plans<br/> and Health Savings Accounts: Are They a Panacea for Small<br/> Businesses?"<br/> SUSAN M. GATES<br/> RAND Corporation<br/> KANIKA KAPUR<br/> University College Dublin (UCD) - Department of<br/> Economics<br/> PINAR KARACA-MANDIC<br/> RAND Corporation<br/> <br/> "The Role of Health Insurance in the Joint Retirement of Married<br/> Couples"<br/> KANIKA KAPUR<br/> University College Dublin (UCD) - Department of<br/> Economics<br/> JEANNETTE A. ROGOWSKI<br/> University of Medicine & Dentistry of New Jersey (UMDNJ)<br/> - School of Public Health, National Bureau of Economic<br/> Research (NBER)<br/> <br/> "Labor Market Effects of Employer-Provided Health Insurance"<br/> KATERINA SHERSTYUK<br/> University of Hawaii at Manoa - Department of Economics<br/> YOAV WACHSMAN<br/> Coastal Carolina University - Wall College of Business<br/> GERARD RUSSO<br/> University of Hawaii at Manoa - Department of Economics<br/> <br/> "Worker Sorting, Taxes and Health Insurance Coverage"<br/> KEVIN LANG<br/> Boston University - Department of Economics, National<br/> Bureau of Economic Research (NBER)<br/> HONG KANG<br/> Boston University - Department of Economics<br/> ______________________________<wbr>______________________________<wbr>_____<br/> <br/> "Modeling Employee Choice of Health Plan"<br/> <br/> Contact: CAROLINE CARLIN<br/> University of Minnesota - Department of Applied<br/> Economics<br/> Email: <a href="mailto:ccarlin@umn.edu">ccarlin@umn.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=709294" target="_blank">http://ssrn.com/author=709294</a><br/> <br/> Co-Author: ROBERT J. TOWN<br/> University of Minnesota - Twin Cities - School of<br/> Public Health, National Bureau of Economic Research<br/> (NBER)<br/> Email: <a href="mailto:rjtown@umn.edu">rjtown@umn.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=183056" target="_blank">http://ssrn.com/author=183056</a><br/> <br/> Abstract: <a href="http://ssrn.com/abstract=996029" target="_blank">http://ssrn.com/abstract<wbr>=996029</a><br/> <br/> ABSTRACT: Much of the health care insurance coverage available in<br/> the United States is offered in the context of plan choice. An<br/> understanding of how to predict individuals' choice of health<br/> plans is instrumental in understanding and managing these<br/> markets. In addition, choice of plans is a key component in many<br/> proposals for national health coverage in the US, so a good<br/> understanding of the mechanisms of choice will assist in<br/> evaluating these policy options.<br/> <br/> This has lead to a broad class of literature, primarily in the<br/> context of choice in employer-sponsored plans. The majority of<br/> this literature relies on a logit model, a utility-based choice<br/> framework. This model presumes the errors in the utilities are<br/> independent and homoskedastic, an assumption often described as<br/> the independence of irrelevant alternatives. This assumption is<br/> violated when one alternative is a better substitute for a plan<br/> than another, as we presume would hold when an indemnity plan is<br/> marketed with two HMO plans. In order to accommodate this<br/> violation, many researchers group the closer substitutes in a<br/> nested logit model. This introduces heteroskedasticity across<br/> nests, but still presumes independence of error terms across<br/> choices.<br/> <br/> This work adds to the literature on health plan choice and the<br/> presence of asymmetric information in health insurance markets by<br/> studying the health plan choice behavior of employees of a large<br/> US employer. The work contributes to the literature by providing<br/> a unified, logically consistent, utility-maximizing framework to<br/> analyze health plan choice in the presence of asymmetric<br/> information and risk aversion. Bayesian inference provides the<br/> tools needed to allow unobserved preference shocks to be<br/> correlated across choices in a flexible way, and for those shocks<br/> to be correlated over time, within a multiperiod, multinomial<br/> probit model. Various papers in the health plan choice literature<br/> incorporate some of these features, but this is the first effort<br/> that combines them all in a logically consistent way.<br/> <br/> In this more flexible model, dimensions of health risk typically<br/> unoberservable are found to influence choice, with sicker<br/> individuals less likely to enroll in the tightly managed plan and<br/> the high-deductible consumer-driven health plan. This is a<br/> significant finding, as empirical evidence of adverse selection,<br/> beyond that measured by observable factors, is rare.<br/> <br/> Understanding the interactions between premiums and health risk<br/> in determining health plan choice is important for assessing the<br/> functioning of broadly defined health insurance markets.<br/> Non-discrimination regulations in the United States require that<br/> the employer not adjust individual contribution levels for<br/> individual risk characteristics. Absent adjustment for<br/> differences in the average health risk mix attracted to the plan,<br/> plans that are expensive because their benefit design attracts<br/> sicker patients are penalized in price equally with plans that<br/> are expensive due to poor management. A greater understanding of<br/> how asymmetric information plays out in the employer-based health<br/> plan market will allow better discrimination between the premium<br/> differences due to adverse selection, and those due to plan<br/> inefficiencies. That information, in turn, can lead to more<br/> cost-effective health plan benefit design.<br/> ______________________________<br/> <br/> "Premium Growth between 1997 and 2004 and its Effect on<br/> Employer-Sponsored Insurance"<br/> <br/> Contact: THOMAS M. SELDEN<br/> Agency for Healthcare Research and Quality (AHRQ)<br/> Email: <a href="mailto:Thomas.Selden@ahrq.hhs.gov">Thomas.Selden@ahrq.hhs.gov</a><br/> Auth-Page: <a href="http://ssrn.com/author=49198" target="_blank">http://ssrn.com/author=49198</a><br/> <br/> Co-Author: JESSICA PRIMOFF VISTNES<br/> U.S. Department of Health and Human Services -<br/> Agency for Healthcare Research & Quality (AHRQ) -<br/> Center for Financing, Access & Cost Trends<br/> Email: <a href="mailto:jvistnes@ahrq.gov">jvistnes@ahrq.gov</a><br/> Auth-Page: <a href="http://ssrn.com/author=53454" target="_blank">http://ssrn.com/author=53454</a><br/> <br/> Abstract: <a href="http://ssrn.com/abstract=993552" target="_blank">http://ssrn.com/abstract<wbr>=993552</a><br/> <br/> ABSTRACT: While economic theory predicts that workers bear the<br/> cost of rising health insurance premiums with reductions in wages<br/> and/or other benefits, empirical evidence on the existence of a<br/> wage-health insurance tradeoff has been mixed. Empirical analyses<br/> have been hampered by the fact that individuals with<br/> employer-sponsored insurance (ESI) are usually more skilled and<br/> have higher wages than those without insurance. For instance, a<br/> simple regression of wages on the presence of health insurance<br/> typically leads to a positive, rather than a negative<br/> relationship.<br/> <br/> Several recent studies have used difference-in-differences<br/> strategies to explore this topic across geographic areas with<br/> differing health care costs or inflation rates. For instance,<br/> Sheiner (1999) finds evidence that age-wage profiles are flattest<br/> in high-health cost areas, reflecting the incidence of health<br/> costs on workers' wages. Sommers (2005) finds evidence that when<br/> employers are faced with rising premiums, the increased insurance<br/> costs can be better absorbed through wage adjustments in areas<br/> with high general inflation or by high wage workers. Both of<br/> these studies analyzed household level survey data.<br/> <br/> We extend this literature using employer level data from the<br/> 1999-2004 Medical Expenditure Panel Survey - Insurance Component<br/> (MEPS-IC), a large, nationally representative survey of employers<br/> and their health insurance plans. We also extend prior work in<br/> that we use difference-in-differences strategies to examine the<br/> effect of high premium growth on a wider set of health insurance<br/> outcomes: the likelihood that an employer will offer insurance,<br/> the levels of employee premium contributions and the generosity<br/> of benefits. Our strategies involve comparing areas with varying<br/> levels of premium growth, general inflation and employers with<br/> different wage distributions.<br/> <br/> To form premium-specific inflation measures, we predict values<br/> from a hedonic regression of MEPS-IC premiums on various<br/> MSA-level measures of health care costs as well as plan type and<br/> benefits. MSA-level predictions are then formed by fixing plan<br/> type and benefits, so that the only source of variation is health<br/> care costs. To identify areas with varying levels of inflation,<br/> we combine the MEPS-IC data with the CPI for Metropolitan<br/> Statistical Areas (which provides MSA-specific inflation rates<br/> over time).<br/> <br/> The MEPS-IC data are arguably better suited for studying many<br/> aspects of the ESI market than are widely-used household data<br/> sources such as the CPS or the MEPS-Household Component and<br/> provides a rich data resource for exploring a wide range of<br/> hypotheses regarding the impact of premium growth on the presence<br/> and generosity of ESI offers.<br/> ______________________________<br/> <br/> "Demand for High-Deductible and 'Consumer-Directed' Health Plans"<br/> <br/> Author: MELINDA BEEUWKES BUNTIN<br/> The RAND Corporation<br/> Email: <a href="mailto:buntin@rand.org">buntin@rand.org</a><br/> Auth-Page: <a href="http://ssrn.com/author=21428" target="_blank">http://ssrn.com/author=21428</a><br/> <br/> Contact: ROLAND D. MCDEVITT<br/> Watson Wyatt Worldwide<br/> Email: <a href="mailto:roland.mcdevitt@watsonwyatt.com">roland.mcdevitt@watsonwyatt<wbr>.com</a><br/> Auth-Page: <a href="http://ssrn.com/author=398695" target="_blank">http://ssrn.com/author=398695</a><br/> <br/> Co-Author: HAYOUNG PARK<br/> RAND Corporation<br/> Email: <a href="mailto:Hayoung_Park@rand.org">Hayoung_Park@rand.org</a><br/> Auth-Page: <a href="http://ssrn.com/author=829112" target="_blank">http://ssrn.com/author=829112</a><br/> <br/> Co-Author: CHERYL DAMBERG<br/> RAND Corporation<br/> Email: <a href="mailto:Cheryl_Damberg@rand.org">Cheryl_Damberg@rand.org</a><br/> Auth-Page: <a href="http://ssrn.com/author=829113" target="_blank">http://ssrn.com/author=829113</a><br/> <br/> Co-Author: RYAN LORE<br/> Watson Wyatt Worldwide - Watson Wyatt & Company<br/> Email: <a href="mailto:Ryan.lore@watsonwyatt.com">Ryan.lore@watsonwyatt.com</a><br/> Auth-Page: <a href="http://ssrn.com/author=829114" target="_blank">http://ssrn.com/author=829114</a><br/> <br/> Abstract: <a href="http://ssrn.com/abstract=994360" target="_blank">http://ssrn.com/abstract<wbr>=994360</a><br/> <br/> ABSTRACT: Enrollment in ?consumer-directed? health insurance<br/> plans - plans with high deductibles that are frequently coupled<br/> with personal savings accounts - has soared over the past four<br/> years and now exceeds 5 million. Approximately a third of firms<br/> offering health insurance benefits now offer a high-deductible<br/> plan and another third say they are interested in doing so. At<br/> the same time, prior studies have found that consumers prefer<br/> low-deductible plans, say they are willing to pay a premium for<br/> them, and are less satisfied when enrolled in high-deductible<br/> plans.<br/> <br/> This paper explores the determinants of enrollment in<br/> consumer-directed plans using data from a survey of 40 employers<br/> offering high-deductible plans. The sample of employers was<br/> stratified by the level of the deductible, the type of account<br/> offered (if any), and level of employer contributions to the<br/> account. The survey asks the employers for detailed information<br/> about their plan offerings, plan benefit designs, and enrollment<br/> levels; this includes information about both their<br/> consumer-directed option and any traditional HMOs or PPOs they<br/> may offer. It also asks about their consumer-directed plan<br/> implementation strategy and about resources available to help<br/> employees choose the best plan for them.<br/> <br/> We explored the factors associated with higher levels of<br/> enrollment when consumer-directed plans are offered alongside<br/> other options. These included three types of variables motivated<br/> by economic theory: 1) financial variables including plan benefit<br/> design elements such as deductible levels and employer<br/> contributions towards accounts; 2) behavioral variables such as<br/> requiring employees to make a proactive choice of plan each year;<br/> 3) information provision through employee communications. We find<br/> that factors within all three types of variables are important<br/> predictors of enrollment levels. We interpret our results about<br/> enrollment elasticities cautiously given our sample size, but do<br/> discuss the relative magnitudes of these effects and their<br/> implications.<br/> ______________________________<br/> <br/> "Benefit Limits for Behavioral Health Care in Private US Health<br/> Plans"<br/> <br/> Contact: DOMINIC HODGKIN<br/> Brandeis University<br/> Email: <a href="mailto:hodgkin@brandeis.edu">hodgkin@brandeis.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=505504" target="_blank">http://ssrn.com/author=505504</a><br/> <br/> Co-Author: CONSTANCE HORGAN<br/> Brandeis University<br/> Email: <a href="mailto:horgan@brandeis.edu">horgan@brandeis.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=505506" target="_blank">http://ssrn.com/author=505506</a><br/> <br/> Co-Author: DEBORAH GARNICK<br/> Brandeis University<br/> Email: <a href="mailto:garnick@brandeis.edu">garnick@brandeis.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=505496" target="_blank">http://ssrn.com/author=505496</a><br/> <br/> Co-Author: ELIZABETH MERRICK<br/> Brandeis University<br/> Email: <a href="mailto:merrick@brandeis.edu">merrick@brandeis.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=505525" target="_blank">http://ssrn.com/author=505525</a><br/> <br/> Abstract: <a href="http://ssrn.com/abstract=993200" target="_blank">http://ssrn.com/abstract<wbr>=993200</a><br/> <br/> ABSTRACT: Rationale: In the US, most private health plans cover<br/> treatment for mental health and substance abuse, but they have<br/> traditionally imposed special limits on that coverage. These<br/> include annual and/or lifetime limits on visits, episodes or<br/> dollars, separate from any limits applied to medical care. In<br/> 1997 the federal government banned dollar limits on mental health<br/> care that differed from medical limits. In addition various<br/> states have passed parity laws constraining insurers' use of<br/> limits, although many large employers are exempt. Some analysts<br/> have argued that health plans may in any case have less need to<br/> use limits now than previously, as the spread of managed care has<br/> provided them with other tools with which to constrain<br/> utilization, such as gatekeeping, provider incentives and<br/> preauthorization.<br/> <br/> Objectives: (1) Describe the prevalence of benefits limits for<br/> behavioral health care in private health plan coverage. (2)<br/> Compute the out-of-pocket exposure facing high users of<br/> behavioral health care in different products, as a function of<br/> copayments and limits. (3) Examine how the use and stringency of<br/> limits relates to other plan practices, such as gatekeeping and<br/> the number of visits allowed before the provider must seek<br/> reauthorization from the plan.<br/> <br/> Data: Our 2003 Survey on Alcohol, Drug Abuse and Mental Health<br/> Services collected detailed data on administrative and clinical<br/> aspects of behavioral health care delivery from 368 commercial<br/> health plans in 60 US market areas, yielding national estimates<br/> of plan features (83% response rate). This paper relies on<br/> respondents' answers to questions about benefits in their three<br/> most commonly purchased packages within each insurance product.<br/> <br/> Methods: Out-of-pocket exposure for a high user is computed as<br/> the amount a consumer would pay for 30 outpatient visits in a<br/> year, assuming that providers charge $100 per visit. Bivariate<br/> tests are used to verify the significance of associations between<br/> use of special limits and other plan features. We also estimate<br/> multivariate models to predict the extent of out-of-pocket<br/> exposure across plans, as a function of utilization management<br/> approaches and various plan characteristics.<br/> <br/> Results: 86% of plans had special annual limits for outpatient<br/> mental health care, mostly limits on visits (mode: 20 visits).<br/> 80% of plans had had special annual limits for inpatient mental<br/> health care, mostly limits on days (mode: 30 days). One-third of<br/> plans had a separate annual limit for outpatient substance abuse<br/> care (typically limiting visits), and these included some plans<br/> that did not limit mental health care. Lifetime limits were much<br/> less common than annual limits.<br/> <br/> Among the plans studied, the mean out-of-pocket cost for 30<br/> visits would be $951 (median: $900). However, in 35% of plans the<br/> cost would only be $450. Preliminary analyses indicate that the<br/> projected out-of-pocket cost is highest in preferred provider<br/> organizations (PPOs). Plans whose benefits imposed more<br/> out-of-pocket costs tended to also authorize fewer sessions<br/> initially through their utilization review process (correlation=<br/> ?0.63).<br/> <br/> Conclusions: Despite the universality of managed care, most US<br/> health plans continue to maintain benefit limits introduced in<br/> the pre-managed era. For high users of behavioral health care,<br/> these limits could result in substantial financial burden.<br/> ______________________________<br/> <br/> "State Health Insurance Mandates, Consumer Directed Health Plans<br/> and Health Savings Accounts: Are They a Panacea for Small<br/> Businesses?"<br/> RAND Working Paper No. WR-450-ICJ<br/> <br/> <br/> Contact: SUSAN M. GATES<br/> RAND Corporation<br/> Email: <a href="mailto:sgates@rand.org">sgates@rand.org</a><br/> Auth-Page: <a href="http://ssrn.com/author=861662" target="_blank">http://ssrn.com/author=861662</a><br/> <br/> Co-Author: KANIKA KAPUR<br/> University College Dublin (UCD) - Department of<br/> Economics<br/> Email: <a href="mailto:kanika.kapur@ucd.ie">kanika.kapur@ucd.ie</a><br/> Auth-Page: <a href="http://ssrn.com/author=349131" target="_blank">http://ssrn.com/author=349131</a><br/> <br/> Co-Author: PINAR KARACA-MANDIC<br/> RAND Corporation<br/> Email: <a href="mailto:pinar@rand.org">pinar@rand.org</a><br/> Auth-Page: <a href="http://ssrn.com/author=345011" target="_blank">http://ssrn.com/author=345011</a><br/> <br/> Full Text: <a href="http://ssrn.com/abstract=1012463" target="_blank">http://ssrn.com/abstract<wbr>=1012463</a><br/> <br/> ABSTRACT: Small firms in the United States that seek to offer<br/> health insurance to their employees have historically reported<br/> problems with the availability and affordability of their<br/> options. The cost of health insurance has been the primary<br/> concern of small business owners for several decades. This paper<br/> examines the effect to date of two types of policy initiatives<br/> that could have substantial benefits for small business: state<br/> health insurance mandates and key components of CDHPs-HSAs, HRAs<br/> and high deductible health plans. It summarizes the key policy<br/> issues, reviews existing research evidence on the effect of these<br/> initiatives on small business and offer some conclusions for<br/> policymakers.<br/> ______________________________<br/> <br/> "The Role of Health Insurance in the Joint Retirement of Married<br/> Couples"<br/> <br/> Contact: KANIKA KAPUR<br/> University College Dublin (UCD) - Department of<br/> Economics<br/> Email: <a href="mailto:kanika.kapur@ucd.ie">kanika.kapur@ucd.ie</a><br/> Auth-Page: <a href="http://ssrn.com/author=349131" target="_blank">http://ssrn.com/author=349131</a><br/> <br/> Co-Author: JEANNETTE A. ROGOWSKI<br/> University of Medicine & Dentistry of New Jersey<br/> (UMDNJ) - School of Public Health, National Bureau<br/> of Economic Research (NBER)<br/> Email: <a href="mailto:rogowsje@umdnj.edu">rogowsje@umdnj.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=400636" target="_blank">http://ssrn.com/author=400636</a><br/> <br/> Abstract: <a href="http://ssrn.com/abstract=993186" target="_blank">http://ssrn.com/abstract<wbr>=993186</a><br/> <br/> ABSTRACT: This paper examines the role of employer provided<br/> health insurance in the retirement decisions of dual working<br/> couples. The near elderly have high-expected medical<br/> expenditures; therefore, availability of health insurance is an<br/> important factor in their retirement decisions. We determine if<br/> access to retiree health insurance for early retirement enables<br/> couples to time their retirement together ? a behavior called<br/> ?joint retirement.? Access to retiree health insurance for early<br/> retirees through either husband's or wife's employer should<br/> increase the propensity to retire jointly. To illustrate, for a<br/> typical near-elderly couple where the husband is two years older<br/> than the wife, the husband is eligible for Medicare two years<br/> earlier than his wife. If either spouse has health insurance that<br/> can cover the wife after retirement, the wife will be able to<br/> retire with her husband when he is sixty-five and maintain health<br/> insurance coverage. On the other hand, if the wife has employer<br/> provided health insurance, but no access to post-retirement<br/> health insurance, the wife will need to postpone retirement until<br/> she reaches sixty-five, reducing the couple's ability to jointly<br/> retire. This is a form of ?job lock.?<br/> <br/> We examine the effect of health insurance on joint retirement<br/> using data from the Health and Retirement Study (HRS). We<br/> estimate a multinomial logit model of the timing of couples'<br/> retirement behavior as a function of health insurance<br/> availability. We find that wives' retiree health insurance more<br/> than doubles the propensity to retire jointly, suggesting that<br/> health insurance is an important consideration in coordinating<br/> retirement decisions among couples. Even though retiree health<br/> insurance has a substantial effect on joint retirement, its<br/> effect on overall employment patterns is modest, accounting for a<br/> 2 percentage point fall in employment.<br/> <br/> We extend this analysis to examine whether retiree health<br/> insurance allows couples to jointly retire earlier than they<br/> would have been able to in the absence of retiree health<br/> insurance. Understanding joint retirement behavior is important<br/> in order to obtain accurate projections of labor force<br/> participation in the future. Over the past decade, the provision<br/> of retiree health benefits has steadily declined ? from 68<br/> percent of retirees in 1992 to 45 percent in 2002. These trends<br/> suggest that couples will increasingly find it difficult to time<br/> their retirement together and yet maintain affordable health<br/> insurance coverage for both spouses. Initiatives to increase<br/> health insurance availability may increase the welfare of the<br/> near-elderly by making joint retirement more feasible.<br/> ______________________________<br/> <br/> "Labor Market Effects of Employer-Provided Health Insurance"<br/> Economic Inquiry, Vol. 45, No. 3, pp. 538-556, July 2007<br/> <br/> <br/> Contact: KATERINA SHERSTYUK<br/> University of Hawaii at Manoa - Department of<br/> Economics<br/> Email: <a href="mailto:KATYAS@HAWAII.EDU">KATYAS@HAWAII.EDU</a><br/> Auth-Page: <a href="http://ssrn.com/author=295903" target="_blank">http://ssrn.com/author=295903</a><br/> <br/> Co-Author: YOAV WACHSMAN<br/> Coastal Carolina University - Wall College of<br/> Business<br/> Email: <a href="mailto:yoav@coastal.edu">yoav@coastal.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=450544" target="_blank">http://ssrn.com/author=450544</a><br/> <br/> Co-Author: GERARD RUSSO<br/> University of Hawaii at Manoa - Department of<br/> Economics<br/> Email: <a href="mailto:russo@hawaii.edu">russo@hawaii.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=102589" target="_blank">http://ssrn.com/author=102589</a><br/> <br/> Full Text: <a href="http://ssrn.com/abstract=994411" target="_blank">http://ssrn.com/abstract<wbr>=994411</a><br/> <br/> ABSTRACT: This is an experimental study in economics of mandated<br/> benefits. Most individuals who have health insurance in the<br/> United States obtain it through their employer. Some states<br/> require employers to provide insurance to certain types of<br/> workers. We used an experimental laboratory to investigate<br/> possible effects of alternative health insurance regulations on<br/> the competitive labor market performance. We found that mandating<br/> the insurance for all workers creates labor market distortions,<br/> whereas mandating the insurance only for full-time workers leads<br/> to a higher coverage than under no mandate, an increased number<br/> of part-time workers, but does not necessarily lower market<br/> efficiency.<br/> ______________________________<br/> <br/> "Worker Sorting, Taxes and Health Insurance Coverage"<br/> NBER Working Paper No. W13066<br/> <br/> <br/> Contact: KEVIN LANG<br/> Boston University - Department of Economics,<br/> National Bureau of Economic Research (NBER)<br/> Email: <a href="mailto:lang@bu.edu">lang@bu.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=232414" target="_blank">http://ssrn.com/author=232414</a><br/> <br/> Co-Author: HONG KANG<br/> Boston University - Department of Economics<br/> Email: <a href="mailto:kanghong@bu.edu">kanghong@bu.edu</a><br/> Auth-Page: <a href="http://ssrn.com/author=845423" target="_blank">http://ssrn.com/author=845423</a><br/> <br/> Full Text: <a href="http://ssrn.com/abstract=986916" target="_blank">http://ssrn.com/abstract<wbr>=986916</a><br/> <br/> ABSTRACT: We develop a model in which firms hire heterogeneous<br/> workers but must offer all workers insurance benefits under<br/> similar terms. In equilibrium, some firms offer free health<br/> insurance, some require an employee premium payment and some do<br/> not offer insurance. Making the employee contribution pre-tax<br/> lowers the cost to workers of a given employee premium and<br/> encourages more firms to charge. This increases the offer rate,<br/> lowers the take-up rate, increases (decreases) coverage among<br/> high (low) demand groups, with an indeterminate overall effect.<br/> We test the model using the expansion of section 125 plans<br/> between 1987 and 1996. The results are generally supportive. </div> </body> </html>