"The Impact of the Recession on Employment-Based Health Coverage" 

EBRI Issue Brief, No. 342, May 2010

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

This paper examines changes in health coverage among workers during the recession that started in December 2007. Data from the Survey of Income and Program Participation are used to examine health coverage prior to the recession, and as recently as July 2009. Monthly changes are examined for 2007 and May 2008-July 2009, with emphasis on changes that occurred between September 2007 and April 2009. Health coverage through the work place is by far the most common source of health insurance among the population under age 65. In 2008, 160.6 million individuals under age 65, or 61.1 percent of that population, were covered by employment-based health benefits. Fifteen percent were covered by Medicaid or the State Children’s Health Insurance Program (SCHIP), 6.3 percent purchased coverage directly from an insurer, and about 3 percent were covered by Medicare or Tricare/CHAMPVA. Nearly 17.5 percent were uninsured. Since the recession started in December 2007, the uninsured have grown. The unemployment rate was as low as 4.4 percent in May 2007, but by July 2009 it had reached 9.4 percent. The percentage of the nonelderly population with employment-based coverage was 61.3 percent in May 2007, and by July 2009 it was down to 58.2 percent. The uninsured rate was 12.3 percent in May 2007, and by July 2009 it was up to 16.4 percent. Between December 2007-May 2008, the percentage of workers with coverage in their own name (the policyholder) fell from 60.4 percent to 56.8 percent. The period between May 2008-July 2009 shows a continuing decline in the percentage of workers with employment-based coverage in their own name, falling to 55.9 percent. The benefits that are being offered have also changed. Deductibles, copayments for office visits, and prescription drug copayments have been increasing. In general, workers least likely to have employment-based coverage at the beginning of the recession were more likely than other workers to experience a decline in the percentage with such coverage one year later. Younger workers were more likely to lose coverage than older workers. Hispanic workers were more likely to lose coverage than whites or blacks. Part-time workers were more likely than full-time workers to have lost employment-based coverage. The percentage of workers with own name employment-based coverage declined the most among those employed by for-profit private-sector employers and those employed by the federal government. Workers with the lowest earnings were the least likely to have employment-based coverage in their own name and experienced the largest decline in coverage.

"The Substantive Effects of Congressional Earmarks: The Case of Health Spending" 

Western Political Science Association 2010 Annual Meeting Paper

GABRIEL SANCHEZ, University of New Mexico
Email: sanchezg@unm.edu
MICHAEL ROCCA, University of New Mexico
Email: msrocca@unm.edu
ANGELINA LEE GONZALEZ-ALLER, affiliation not provided to SSRN

What is the substantive value of congressional earmarks? Previous research shows that 'pork' has indirect effects on congressional elections, but few studies examine the substantive implications of earmark funding in a legislator' district. In this paper we attempt to provide some clarification to this issue by addressing two specific research questions. First, what factors explain levels of federal earmark expenditures for health focused projects? And second, does the amount of health expenditures have any substantive impact on the 'healthiness' of congressional districts? To address these questions we combine 2009 earmark data compiled by Taxpayers for Common Sense with the Gallup-Healthways Well-Being Index. The Well-Being Index is survey data collected at the congressional-district level focused on health and well-being. Given the increased salience of health policy due to the current reform debates in Congress, our test of the relationship between health-focused congressional earmarks and health outcomes will be of interest to scholars of Congress and health care politics and policy.

"U.S. Healthcare Reform: International Perspectives" 

HBS Case No. 710-040
Harvard Business School BGIE Unit

ARTHUR A. DAEMMRICH, Harvard Business School, BGIE Unit
Email: adaemmrich@hbs.edu
ELIA PINEIRO, Harvard Business School
Email: epineiro@hbs.edu

The national economic implications of rising healthcare costs were poorly understood, even as the United States, Germany, and the United Kingdom instituted reforms in early 2010. Presenting opportunities for cross-national policy learning, this case describes the political economy of healthcare reform. In late March 2010, a major healthcare reform act was signed into law in the United States, expanding coverage and regulating insurers. However, it was not clear that expanding coverage would resolve a longstanding dilemma of rising costs for insurance and care. As the Department of Health and Human Services implemented the new law, it drew on lessons from Germany, which had implemented changes to regulated but competitive insurance and provider markets, and the United Kingdom, which had introduced market-style initiatives while keeping insurance and delivery under the National Health Service.

"Drawing Lines in Shifting Sands: The U.S. Supreme Court's Mixed Messages on ERISA Preemption Imperil Health Care Reform" 

Journal of Legislation, Forthcoming
Boston College Law School Legal Studies Research Paper No. 197

MARY ANN CHIRBA-MARTIN, Boston College - Law School
Email: mary.chirba-martin.1@bc.edu

This article explains how and why the U.S. Supreme Court’s increasingly erratic preemption jurisprudence has fueled a health care system that routinely harms patients, frustrates health care providers, and derails state reform efforts. It begins by describing the mechanics of ERISA preemption, and then analyzes the Court’s 30 year odyssey from no preemption of state law claims against managed care payers, to broad preemption, retreating to limited preemption and, for now at least, trending again toward broad preemption. This is an extremely unstable area of the law which, at this point, demands not just an update but a thorough overview. This article does both while also tying it to federal health reform efforts, and examining the impact on ERISA preemption jurisprudence of the U.S. Supreme Court’s March 2009 decision in Wyeth v. Levine, _ U.S. _, 129 S. Ct. 1187 (2009) (holding that the Food, Drug & Cosmetic Act does not preempt product liability claims under Vermont law for inadequate labeling of prescription drug). Synthesizing all of the above demonstrates why, in a nation where 180 million already receive employer-sponsored health benefits and millions more will do so post-PPACA, Congress must tackle ERISA preemption or grant state waivers if it truly wants to reform American health care.

"Darkness at Noon: Judicial Interpretation has Made Things Worse for Benefit Plan Participants Under ERISA than had the Statute Never Been Enacted" 

St. Thomas Law Review, Forthcoming
U of Michigan Public Law Working Paper

ANDREW STUMPFF, University of Michigan Law School
Email: astumpff@umich.edu

The author argues that judicial decisions under the Employee Retirement Income Security Act of 1974 have been so constrictive and anti-employee, over such a long time, that it can now be said that participants in employer-sponsored pension and health insurance plans would have been better off, on balance, if the statute had never been enacted. Given that the Act’s stated purpose was to protect benefit plan participant, this is a surprising conclusion to have to reach. Nonetheless the argument is strong, and is validated in part by the thousands of cases that have accumulated in which plan participants/plaintiffs have been forced to argue ERISA does not apply to their claims, as a precondition to salvaging those claims.

"Tax Subsidies,Third-Party Payments, and Cross-Subsidization: America's Distorted Health Care Markets" 

University of Memphis Law Review, Vol. 40, No. 279, 2009
University of Memphis Legal Studies Research Paper No. 3

WILLIAM P. KRATZKE, University of Memphis - Cecil C. Humphreys School of Law
Email: wkratzke@memphis.edu

The focal point of health care in the United States is employment-based group health insurance. Such insurance provides and controls the access of millions of working Americans to health care. It also does much to define the nature and content of health care itself. Americans' insurance companies usually pay for specific services that they receive. For millions of other Americans who participate in a health care program such as Medicare or Medicaid, the program names the price it will pay for individual health care services. Many providers regard those prices as too low. Employment-based group insurance is the source from which such providers may seek subsidization of the care they provide participants in such programs, i.e., by charging those with such insurance more. By establishing programs or rules, government in essence mandates private-sector payment of subsidies, e.g., those for Medicare, Medicaid, or MTALA. Employment-based group health insurance provides the wherewithal to pay for the health care of most Americans and to cross-subsidize the care of most of the very substantial remainder. Private entities administer the subsidies and do so without much outside oversight and with very little accountability to other participants in the health care system.

"The Impact of an Individual Health Insurance Mandate on Hospital and Preventive Care: Evidence from Massachusetts" 

NBER Working Paper No. w16012

JONATHAN T. KOLSTAD, The Wharton School, University of Pennsylvania
Email: jkolstad@wharton.upenn.edu
AMANDA ELLEN KOWALSKI, National Bureau of Economic Research (NBER), Yale University
Email: kowalski@nber.org

In April 2006, the state of Massachusetts passed legislation aimed at achieving near universal health insurance coverage. A key provision of this legislation, and of the national legislation passed in March 2010, is an individual mandate to obtain health insurance. In this paper, we use hospital data to examine the impact of this legislation on insurance coverage, utilization patterns, and patient outcomes in Massachusetts. We use a difference-in-difference strategy that compares outcomes in Massachusetts after the reform to outcomes in Massachusetts before the reform and to outcomes in other states. We embed this strategy in an instrumental variable framework to examine the effect of insurance coverage on outcomes. Among the population discharged from the hospital in Massachusetts, the reform decreased uninsurance by 28% relative to its initial level. Increased coverage affected utilization patterns by decreasing length of stay and the number of inpatient admissions originating from the emergency room. We also find evidence that outpatient care reduced hospitalizations for preventable conditions. At the same time we find no evidence that the cost of hospital care increased. The reform affected nearly all age, gender, income, and race categories. We identify some populations for which insurance had the greatest direct impact on outcomes and others for which the impact on outcomes appears to have occurred through spillovers.

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