Keeping what you like: grandfathering and health insurance coverage take-up rates under the ACA
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Keeping what you like: grandfathering and health insurance coverage take-up rates under the ACA Nour Kattih 1 & Fady Mansour 2 & Franklin G. Mixon Jr 2 Accepted: 30 September 2020/ # Academy of Economics and Finance 2020
Abstract According to various reports, between 1.8 million and 4.7 million health insurance plans were replaced shortly after passage of the Affordable Care Act of 2010 with new ACA-compliant plans. In order to limit this occurrence, provisions in the ACA included “grandfathering,” which allowed many Americans to retain health insurance coverage that was in place on or before the ACA was signed into law. These health insurance plans were in many cases favored by individuals and employees because they had been customized, unlike many of the new non-grandfathered plans. This study explores the effect of grandfathering on health insurance coverage take-up rates by employees, given that there are some key differences between grandfathered and nongrandfathered plans that perhaps make the former relatively more attractive to employees. Using survey data from the Kaiser Family Foundation and the Health Research Educational Trust, difference-in-difference regressions reported here suggest that take-up rates for grandfathered health insurance plans are generally higher than those for non-grandfathered plans. Estimates generally place these take-up rate differences, favoring grandfathered plans, somewhere between 2.9 and 8.2 percentage points, depending on plan type, firm size and firm location. This finding suggests that more flexible plans are needed to increase employer-sponsored health insurance coverage. Keywords Health insurance coverage take-up rates . Grandfathered health plans .
Affordable care act JEL classifications I13 . I18 . G22
* Fady Mansour [email protected]
1
Department of Economics and Finance, Middle Tennessee State University, Murfreesboro, TN 37132, USA
2
Center for Economic Education, Columbus State University, 4225 University Avenue, Columbus, GA 31907, USA
Journal of Economics and Finance
“No matter how we reform health care, I intend to keep this promise: If you like your doctor, you’ll be able to keep your doctor; if you like your health care plan, you’ll be able to keep your health care plan.” U.S. President Barack Obama. June 11, 2009. Town Hall Gathering in Green Bay, Wisconsin.
1 Introduction The current intra-Democratic Party debate about whether or not proposals for universal healthcare, typically referred to as “Medicare for All,” will accommodate a private health insurance market has many in the U.S. electorate recalling former U.S. President Barack Obama’s promise, referred to in the epigraph, that the proposed Affordable Care Act of 2010 (hereafter ACA) would not lead to unwanted elimination of existing health insurance plans.1 According to a review by Robinson (2014), however, somewhere between 1.8 million and 4.7 million health insurance plans were cancelled shortly after passage of the ACA and replaced with new ACA-compliant plans.2 As a work-ar
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