How Elastic is the Firm's Demand for Health Insurance?

Gruber, Jonathan; Lettau, Michael

doi:10.3386/w8021

Cited by 50 publications

(50 citation statements)

References 11 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…We find negative effects on paying all and on paying some of the cost of insurance, and even a significant negative impact on the odds of paying none of the cost, resulting in a very sizeable decline in overall insurance coverage; this result mirrors the price sensitivity of employer-provided insurance coverage documented in Gruber and Lettau (2000) and Gruber (2002). Once again, this negative impact on overall coverage makes interpretation somewhat difficult.…”

Section: Basic Resultssupporting

confidence: 75%

“…The alternative is to simply use the CPS respondent's information to form the measures, as a proxy for the characteristics of their firm. As part of earlier work (Gruber and Lettau, 2000), one of us has investigated both of these options using internal Bureau of Labor Statistics data, the employment compensation index (ECI) data, which gathers information on both firm characteristics and the wages of workers in the firm. The data show that, for predicting the average wage of a firm, the individual worker's wage has much more predictive power than does an average wage formed by aggregating like firms into synthetic firms.…”

Section: Measurement Of Key Independent Variablesmentioning

confidence: 99%

See 1 more Smart Citation

Why did employee health insurance contributions rise?

Gruber

McKnight

2003

Journal of Health Economics

Self Cite

View full text Add to dashboard Cite

We explore the causes of the dramatic rise in employee contributions to health insurance over the past two decades. In 1982, 44% of those who were covered by their employer-provided health insurance had their costs fully financed by their employer, but by 1998 this had fallen to 28%. We discuss the theory of why employers might shift premiums to their employees, and empirically model the role of four factors suggested by the theory. We find that there was a large impact of falling tax rates, rising eligibility for insurance through the Medicaid system, rising medical costs, and increased managed care penetration. Overall, this set of factors can explain more than one-half of the rise in employee premiums over the 1982-1996 period.

show abstract

Section: Basic Resultssupporting

confidence: 75%

Section: Measurement Of Key Independent Variablesmentioning

confidence: 99%

Why did employee health insurance contributions rise?

Gruber

McKnight

2003

Journal of Health Economics

Self Cite

View full text Add to dashboard Cite

show abstract

“…An increasing body of evidence suggests that there is likely substantial heterogeneity regarding preferences for health insurance benefits among workers within firms. For example, Gruber and Lettau (2004) find that within firms, the median worker and workers in the highest quantiles of salary exhibit a disproportionate amount of influence on decisions related to health insurance coverage. These workers may also be willing to bear a disproportionate amount of the costs through lower wages, and if these tastes can indeed be proxied by observables such as salary, it may be useful to examine whether the trade-off exists by examining those most likely affected.…”

Section: Discussionmentioning

confidence: 98%

“…Gruber and Lettau (2004) find that the decision to offer health insurance at the firm level depends on the prices faced by both the median worker and highly compensated workers. Wiatrowski (1995) reports that medium and large establishments were 20% more likely to offer health insurance to full time employees relative to small establishments.…”

Section: Introductionmentioning

confidence: 98%

Worker sorting, compensating differentials and health insurance: Evidence from displaced workers

Lehrer¹,

Pereira²

2007

Journal of Health Economics

View full text Add to dashboard Cite

This article introduces an empirical strategy to the compensating differentials literature that (i) allows both individual observed and unobserved characteristics to be rewarded differently in firms based on health insurance provision, and (ii) selection to jobs that provide benefits to operate on both sides of the labor market. Estimates of this model are used to directly test empirical assumptions that are made with popular econometric strategies in the health economics literature. Our estimates reject the assumptions underlying numerous cross sectional and longitudinal estimators. We find that the provision of health insurance has influenced wage inequality. Finally, our results suggest there have been substantial changes in how displaced workers sort to firms that offer health insurance benefits over the past two decades. We discuss the implications of our findings for the compensating differentials literature.

show abstract

“…For higher income workers, the subsidy is even greater. Research has shown that this tax subsidy increases the likelihood that small firms offer insurance and leads employers of all sizes to provide more generous coverage (3, 4). Second, employer provision of insurance mitigates adverse selection.…”

Section: The Economics Of Employer Health Insurance Offeringmentioning

confidence: 99%

Will Employers Drop Health Insurance Coverage Because Of The Affordable Care Act?

2013

View full text Add to dashboard Cite

Since the passage of the Affordable Care Act, there has been considerable speculation about how many employers will stop offering health insurance once the major coverage provisions of the Act take effect. While some observers predict little aggregate effect, others believe that 2014 marks the beginning of the end for our current system of employer- sponsored insurance. We address the question “how will employer health insurance offering respond to health reform?” using theoretical and empirical evidence. First, we describe economic models of why employers offer insurance. Second, we recap the relevant provisions of health reform and use our economic framework to consider how they may affect employer offers. Third, we review the various predictions that have been made on this subject. Finally, we offer some observations on interpreting early data from 2014.

show abstract

How Elastic is the Firm's Demand for Health Insurance?

Cited by 50 publications

References 11 publications

Why did employee health insurance contributions rise?

Why did employee health insurance contributions rise?

Worker sorting, compensating differentials and health insurance: Evidence from displaced workers

Will Employers Drop Health Insurance Coverage Because Of The Affordable Care Act?

Contact Info

Product

Resources

About