The Incidence of Mandated Health Insurance: Evidence from the Affordable Care Act Dependent Care Mandate

Goda, Gopi Shah; Farid, Monica; Bhattacharya, Jay

doi:10.3386/w21846

Cited by 5 publications

(12 citation statements)

References 27 publications

(11 reference statements)

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“…Based on these differences in key variables driving self-employment, we employ an alternate treatment and control group of individuals who are the same age. The control group are individuals from states with existing DMs in place prior to 2010 (Goda et al, 2016). Table III shows summary statistics for these two groups, and we highlight that there are no significant differences between the two groups across these key variables.…”

Section: Methodsmentioning

confidence: 98%

“…The data provide rich information on the socioeconomic and demographic variables of each individual, including health insurance and detailed employment status. In addition to the ACS, we follow Goda et al (2016) to identify states with existing DMs prior to the ACA and the year in which they became effective (Table I).…”

Section: Methodsmentioning

confidence: 99%

“…Massachusetts is not the only state to undertake health reform pre-ACA. Goda et al (2016) list 37 states with a dependent coverage mandate prior to the ACA. For example, North Dakota's DM became effective in 1995.…”

Section: Aca and Entrepreneurshipmentioning

confidence: 99%

“…These individuals can now remain on their parent's insurance (henceforth known as the Dependent Mandate (DM) [1]). Further, it is noteworthy that many states adopted a DM prior to the implementation of the ACA (Goda et al, 2016). We focus our analysis on the effect of the ACA 2010 DM on entrepreneurship among young adults, while using variation in prior state-level DMs for identification.…”

Section: Introductionmentioning

confidence: 99%

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Did the ACA reduce job-lock and spur entrepreneurship?

Condliffe

Saboe

Terrizzi

2017

JEPP

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Purpose The purpose of this paper is to assess the effect of the recent Affordable Care Act’s (ACA) Dependent Mandate (DM) that requires health insurers to extend dependent coverage to the children of their insured, up to age 26. The DM has the potential to free young persons from “job lock,” enabling them to engage in entrepreneurial activity. Using the American Community Survey, the authors analyze the change in self-employment for ages 18-25 relative to the implementation of the DM. Design/methodology/approach The authors approach the research question in a unique manner and in doing so, extend the literature. Employing national data, the authors focus on young adults impacted by the DM (those under the age of 26 may remain on their parents’ insurance). While the DM is a condition of the ACA, prior to its implementation several states had already passed their own such provision. The authors exploit this state-by-state variation in the methodology. Findings The authors find no evidence that the ACA has stimulated self-employment among all young adults. However, the authors determine that the DM has a positive and significant effect on the likelihood of students being self-employed. The result is even more pronounced when using a stricter definition of entrepreneurship, an incorporated business. Sub-group analyses show no evidence of a significant effect on entrepreneurship among young adults in other groups. The results remain after conducting various falsification tests. Originality/value The paper empirically addresses the commonly held belief that the ACA is creating new businesses via reduced job lock. Policy makers may wish to target other explanations of job lock rather than health insurance availability.

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Section: Methodsmentioning

confidence: 98%

Section: Methodsmentioning

confidence: 99%

Section: Aca and Entrepreneurshipmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Did the ACA reduce job-lock and spur entrepreneurship?

Condliffe

Saboe

Terrizzi

2017

JEPP

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“…In addition, those under 27 are excluded from the estimates because the ACA's dependent coverage mandate affected younger workers’ labor supply (see Antwi et al , Depew , Hahn and Yang , and Goda et al ). Workers aged 60 and over are also excluded because they could be expected to retire prior to or very shortly after the mandate's implementation.…”

Section: Empirical Frameworkmentioning

confidence: 99%

Employer‐Sponsored Health Insurance and the Gender Wage Gap: Evidence from the Employer Mandate

Lennon¹

2018

Southern Economic Journal

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In the United States, female workers tend to have higher medical expenditures than male workers. Due to experience rated premiums, the cost of providing employer-sponsored health insurance (ESI) therefore differs by gender. This article examines if that cost difference contributes to the gender wage gap. Identification comes from the exogenous variation provided by the Affordable Care Act's employer mandate. Estimation uses a difference-in-difference framework with data from the Medical Expenditure Panel Survey. Findings suggest the portion of the gender wage gap attributable to ESI is smaller than existing estimates in the literature and is statistically no different to zero once individual medical expenses are included as a control. In addition, the article's empirical approach highlights that existing work on the role of ESI in the gender wage gap does not separately identify the effect of ESI from plausible alternatives.JEL Classification: I13, J16, J23, J31, J32, J71 The full cost of ESI is pushed onto firms either via experience rating (premiums reflect the actual expenditures of employees) or self-insurance. 2 The Health Insurance Portability and Accountability Act (HIPAA) forbids discriminatory distinctions in benefit generosity and employee contributions. See https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/offeringdifferentbenefitsfor differentemployees.aspx. Given these medical expenditure differences, employers who offer ESI should prefer (at the margin) to hire males unless female wages are free to adjust to account for the cost of ESI. 3 However, Daneshvary and Clauretie (2007), using spousal job characteristics as an instrumental variable, find little evidence to suggest that females receive lower wages than males due to ESI. Cowan and Schwab (2016) reach the opposite conclusion. They use a difference-in-difference empirical strategy that compares wage gaps between males and females at firms that do and do not offer ESI. Their strategy is borrowed from Bhattacharya and Bundorf (2009), who examine how ESI affects obese workers' wages. Cowan and Schwab's findings suggest that hourly wages are $0.50 to $1.50 (in 2002 dollars) larger for males when ESI is offered. Even though firms that do and do not offer ESI are surely different, these estimates have a causal interpretation if the identifying assumptionthat unobserved effects on wages are the same for males and females-is valid.This article first establishes that Cowan and Schwab's (and, in turn, Bhattacharya and Bundorf's) identifying assumption does not hold. To do so, the article subjects their identification strategy to a series of falsification tests using wage and medical expenditure differences among other groups. This exercise highlights that there are differences between firms that do and do not offer ESI that will tend to increase wage gaps between workers-for reasons that are unrelated to ESI. These identification issues ensure that the effect of ESI on the gender wage gap remains an open question.To resolve that open ...

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Private coverage mandates, business cycles, and provider treatment intensity

Richards

Tello‐Trillo

2021

Health Economics

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The Affordable Care Act (ACA) is the source of multiple large-scale health insurance expansions affecting various segments of the US population.Although much has been done to quantify the first-order effects of these policies, less empirical investigation has been devoted to the effects on the supply-side of health care. We focus on a well-known ACA initiative (the young adult dependent coverage mandate) to offer novel evidence on two fronts: the policy's heterogeneous effect across different labor markets and the potential for the policy-induced shift in payer mix to influence provider treatment decisions. First, we show that the federal mandate's direct effect on young adult private insurance take-up is strongly mitigated by the Great Recession. Second, we demonstrate that providers do not treat young adults more aggressively when more of them hold private coverage. Policymakers should keep these broader considerations and more diffuse risk protection implications in mind when contemplating changes to the law.

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The Incidence of Mandated Health Insurance: Evidence from the Affordable Care Act Dependent Care Mandate

Cited by 5 publications

References 27 publications

Did the ACA reduce job-lock and spur entrepreneurship?

Did the ACA reduce job-lock and spur entrepreneurship?

Employer‐Sponsored Health Insurance and the Gender Wage Gap: Evidence from the Employer Mandate

Private coverage mandates, business cycles, and provider treatment intensity

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