JOHN R. LOTT, University of Maryland
Email: jlott@umd.edu

The debate over government-provided insurance for Americans frequently makes two assumptions: that the uninsured are unsatisfied with the health care they receive and that government health insurance would improve the quality of care for the uninsured. This paper finds that the vast majority of uninsured Americans are satisfied with their health care. Indeed, only 2.3 percent of Americans are both uninsured and very dissatisfied with the quality of the medical care that they receive. The paper finds that Canadians are much closer to uninsured Americans than to insured Americans in their satisfaction with their health care. There is also little difference in the level of Americans' satisfaction with their health care based upon race, marital status, educational attainment, income, or political views. There is some difference in satisfaction based on age and between the most extreme levels of educational attainment.

PAUL FRONSTIN, Employee Benefit Research Institute (EBRI)
Email: FRONSTIN@EBRI.ORG

This paper presents findings from the 2008 EBRI Consumer Engagement in Health Care Survey, which provides nationally representative data regarding the growth of account-based health plans and high-deductible health plans (HDHPs) and the impact of these plans and consumer engagement more generally on the behavior and attitudes of adults with private health insurance coverage. Findings are compared with the 2005, 2006, and 2007 EBRI/Commonwealth Fund Consumerism in Health Care Surveys. In past reports, the term 'comprehensive' was used as the descriptive label for what are now labeled 'traditional' health plans. A label change was in order given that these plans are not as comprehensive as they were in the past and may no longer be comprehensive.

This survey finds that in 2008, 3 percent of the population was enrolled in a consumer-driven health plan (CDHP), up from 2 percent in 2007, and enrollment in HDHPs remained at 11 percent. The 3 percent of the population with a CDHP represents 4.2 million adults ages 21-64 with private insurance, while the 11 percent with a HDHP represents 13.4 million people. Among the 13.4 million individuals with an HDHP, 42 percent, or 5.6 million, reported that they were eligible for an HSA but did not have such an account. Thus, overall, 9.8 million adults ages 21-64 with private insurance (representing 7.9 percent of that market) were either in a CDHP or were in an HDHP that was eligible for an HSA, but had not opened the account. HRA and HSA enrollment is growing, but the market penetration remains relatively small, and the plans are still relatively new and unknown to many individuals with private insurance. Among persons with CDHPs, 37 percent had been covered by their health plan three years or longer in 2008, up from 21 percent in 2006. Among traditional plan and HDHP enrollees, 59 percent and 55 percent, respectively, had been covered by their health plan three years or longer in 2008. With respect to familiarity with a CDHP, 59 percent of those with a CDHP were extremely or very familiar with a CDHP. In contrast, only 8 percent of individuals with traditional coverage were extremely or very familiar with a CDHP, and only 10 percent of individuals with an HDHP were extremely or very familiar with a CDHP.

KENNETH J. MCDONNELL, Employee Benefit Research Institute (EBRI)
Email: MCDONNELL@EBRI.ORG

The latest data from the U.S. Commerce Department's Bureau of Economic Analysis (BEA) indicate that employer spending on total compensation continues to increase, reaching almost $8 trillion at year-end 2007. That is almost 35 percent higher than seven years earlier, in 2000. This paper provides the latest available data on employer spending on total compensation, which includes both wages and salaries and benefits, of which retirement and health benefits are the largest component. In 2007, employers spent $7.8 trillion on total compensation, according to the most recent data from the U.S. Commerce Department's Bureau of Economic Analysis (BEA). Wages and salaries accounted for the lion's share, $6.4 trillion (or 81.6 percent), while benefits made up the remainder, $1.5 trillion (18.4 percent).

Retirement benefits remain the largest single sector of benefits expenditures by employers, although health benefits have been catching up. In 1960, retirement benefits accounted for the majority of total benefit spending (59.7 percent), followed by other benefits (25.8 percent) and health benefits (14.4 percent). By 2007, retirement benefits were still the largest component of all benefit spending, but had declined to 47.7 percent of the total; spending on health benefits had increased to 42.8 percent of total benefit spending, while "other benefits" declined the most, to 9.5 percent.

The PDF for the above title, published in the November 2008 issue of EBRI Notes, also contains the fulltext of another November 2008 EBRI Notes article abstracted on SSRN: "Retirement Annuity and Employment-Based Pension Income Among Individuals Age 50 and Over: 2007."

MELISSA BOYLE, University of Southern California - Leventhal School of Accounting
Email: melissa.boyle.2008@marshall.usc.edu
JOANNA LAHEY, National Bureau of Economic Research (NBER), Texas A&M University - George Bush School of Government and Public Service
Email: jlahey@nber.org

This paper exploits a major mid-1990s expansion in the U.S. Department of Veterans Affairs health care system to provide evidence on two important and interrelated U.S. policy issues: retirement policy and universal health care. Using data from the Current Population Survey, we compare the labor market behavior of older veterans and non-veterans before and after the VA health benefits expansion to test the impact of public health insurance on labor supply. We find that older workers are significantly more likely to stop working or to move from full-time to part-time work after receiving access to non-employer based insurance. Older workers are also more likely to leave self-employment, a result inconsistent with "job-lock" effects of employer-based insurance, but consistent with a positive income effect from new access to public insurance. Some relatively disadvantaged subpopulations, however, may increase their labor supply after gaining greater access to public insurance, consistent with complementary positive health effects of health care access for these groups.

We conclude that recent reforms expanding public health insurance have affected employment and retirement decisions, meaning that future moves toward universal coverage or expansions of Medicare are likely to have significant labor market effects. To illustrate, we calculate that as much as 10% of the difference in retirement rates in the United States and Canada may be due to Canada's provision of universal health care.

ROBERT W. FAIRLIE, University of California, Institute for the Study of Labor (IZA), RAND Corporation
Email: rfairlie@ucsc.edu
KANIKA KAPUR, University College Dublin (UCD) - Department of Economics
Email: kanika.kapur@ucd.ie
SUSAN M. GATES, RAND Corporation
Email: sgates@rand.org

The focus on employer-provided health insurance in the United States may restrict business creation. The authors address the limited research on the topic of entrepreneurship lock by using recent panel data from matched Current Population Surveys. They use difference-indifference models to estimate the interaction between having a spouse with employer-based health insurance and potential demand for health care. They find evidence of a larger negative effect of health insurance demand on the entrepreneurship probability for those without spousal coverage than for those with spousal coverage. They also take a new approach in the literature to examine the question of whether employer-based health insurance discourages entrepreneurship by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure of identifying age in months from matched monthly CPS data, they compare the probability of business ownership among male workers in the months just before turning age 65 and in the months just after turning age 65. They find that business ownership rates increase from just under age 65 to just over age 65, whereas they find no change in business ownership rates from just before to just after for other ages 55-75. Their estimates provide some evidence that entrepreneurship lock exists, which raises concerns that the bundling of health insurance and employment may create an inefficient allocation of which or when workers start businesses.