JEFFREY B. WENGER, University of Georgia - School of Public and International Affairs
Email: jwenger@uga.edu
JEREMY D. REYNOLDS, affiliation not provided to SSRN

We examine the effects of health and health insurance coverage on older married workers’ decisions to work in temporary, contract, part-time, self-employment, and regular full-time jobs. We model the behavior of older married workers as interdependent, showing that one spouse’s health and insurance status affects the employment of the other. In general, we find that men and women are less likely to be employed in regular full-time jobs when they are in fair or poor health and are more likely to be in regular full-time employment when their spouses are in poor health.

GARY BURTLESS, Brookings Institution, Retirement Research Center, Boston College
Email: GBURTLESS@BROOK.EDU
PAVEL SVATON, Brookings Institution
Email: psvaton@brookings.edu

Cash income offers an incomplete picture of the resources available to finance household consumption. Most American families are covered by an insurance plan that pays for some or all of the health care they consume. Only a comparatively small percentage of families pay for the full cost of this insurance out of their cash incomes. As health care has claimed a growing share of consumption, the percentage of care that is financed out of household incomes has declined. Because health care consumption is more important for some groups in the population than others, the growth in spending and changes in the payment system for medical care have reduced the value of standard income measures for assessing relative incomes across age groups and across the income distribution. More than a seventh of total personal consumption now consists of health care that is purchased with government insurance and employer contributions to employee health plans. In this paper we combine health care spending and insurance reimbursement data in the Medical Expenditure Panel Study with cash and noncash income data in the Current Population Survey to assess the impact of health insurance on the distribution of income and, in particular, on the age profile of income. Our estimates imply that gross money income and disposable cash and near-cash income significantly understate the resources available to finance household purchases. The estimates imply that a more complete measure of resources would show less inequality than the income measures that are currently used. The addition of estimates of the value of health insurance to countable incomes reduces measured inequality in the population and the income gap between young and old. Standard income measures imply that households with an aged household head have significantly lower average and median incomes than households with a head who is less than 55. In contrast, an income definition that includes the value of health insurance implies that aged households have higher incomes than households with a nonaged head.

PAUL FRONSTIN, Employee Benefit Research Institute (EBRI)
Email: FRONSTIN@EBRI.ORG
RUTH HELMAN, Mathew Greenwald & Associates
Email: RUTHHELMAN@GREENWALDRESEARCH.COM

This paper presents findings from the 2009 Health Confidence Survey (HCS), the 12th wave of an annual survey that examines a broad spectrum of health care issues, including Americans’ satisfaction with health care today, their confidence in the future of the health care system and the Medicare program, and their attitudes toward health care reform. Findings from the 2009 Health Confidence Survey indicate that Americans have already formed strong opinions regarding various aspects of health reform, even before details have been released regarding various key factors. These issues include health insurance market reform, the availability of a public plan option, mandates on employers and individuals, subsidized coverage for the low-income population, changes to the tax treatment of job-based health benefits, and regulatory oversight of health care. These opinions may change as details surface, especially as they concern financing options. In the absence of such details, the 2009 HCS finds generally strong support for the concepts of health reform options that are currently on the table. Individuals with employment-based health benefits are confident that employers will continue to offer such benefits. They are much less confident that they would be able to afford coverage on their own, even if employers gave them the money they currently spend on health benefits. Those experiencing health cost increases tend to say these increases have negatively affected their household finances. In particular, they indicate that increased health care costs have resulted in a decrease in contributions to a retirement plan (32 percent) and other savings (53 percent) and in difficulty paying for basic necessities (29 percent) and other bills (37 percent). Many consumers report they are changing the way they use the health care system in response to rising health care costs. Roughly 80 percent of those with higher out-of-pocket expenses say these increased costs have led them to try to take better care of themselves and choose generic drugs more often. One-quarter also say they did not fill or skipped doses of their prescribed medications in response to increased costs.

PHILLIP B. LEVINE, Wellesley College, National Bureau of Economic Research (NBER)
Email: PLEVINE@WELLESLEY.EDU
ROBIN MCKNIGHT, University of Oregon - Department of Economics, National Bureau of Economic Research (NBER)
Email: robinm@uoregon.edu
SAMANTHA HEEP, Wellesley College - Department of Economics
Email: samantha.heep@gmail.com

This paper assesses the impact of two recent policies designed to increase insurance coverage for older teens and young adults. The introduction of SCHIP in 1997 enabled low and moderate income teens up to age 19 to gain access to public health insurance. More recent policies adopted by a number of states have enabled young adults between the ages of 19 and (typically) 24 to remain covered under their parents' health insurance. We take advantage of the discrete break in coverage at age 19 to evaluate the impact of SCHIP. We also use quasi-experimental variation across states and years along with the targeted nature of eligibility to evaluate the impact of these "extended parental coverage" laws. Our results suggest that both types of policies were effective at increasing health insurance coverage, especially among their respective target populations. Overall, SCHIP increases insurance coverage by 3 percentage points; those with incomes under 150 percent of poverty are found to experience a 7 percentage point increase. We find little evidence of crowd-out associated with the introduction of SCHIP. Extended parental coverage laws have minimal aggregate effects on coverage, but they increase coverage by up to 5 percentage points for select groups. These laws may generate reverse crowd-out, as individuals leave public insurance coverage to take advantage of the private coverage now available to them.

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DAVID P. BERNSTEIN, affiliation not provided to SSRN
Email: spstat@yahoo.com

Congress and the Administration are considering the possibility of taxing excessive employer sponsored insurance (ESI) benefits. This paper considers issues associated with the proposed tax on generous ESI plans. The primary purpose of a tax on ESI benefits is to restrain the growth of health insurance premiums and utilization rather than to directly raise revenue. A tax that restrains health care utilization would create economic efficiencies and reduce tax expenditures associated with ESI sponsored health insurance. An equitable ESI benefit tax would require government regulation to insure that it was imposed on firms offering generous health insurance plans instead of small undiversified firms that are charged high premiums because of their high-risk, older or sick workforce.