The impact of Medicaid expansion on employer provision of health insurance
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The impact of Medicaid expansion on employer provision of health insurance Jean M. Abraham1
· Anne B. Royalty2 · Coleman Drake3
Received: 23 May 2018 / Accepted: 5 December 2018 © Springer Science+Business Media, LLC, part of Springer Nature 2018
Abstract Using the 2010–2015 Medical Expenditure Panel Survey-Insurance Component, this study investigates the effect of the Affordable Care Act’s Medicaid eligibility expansion on four employer-sponsored insurance (ESI) outcomes: offers of health insurance, eligibility, take-up, and the out-of-pocket premium paid by employees for single coverage. Using a differencein-differences identification strategy, we cannot reject the hypothesis of a zero effect of the Medicaid eligibility expansion on an establishment’s probability of offering ESI, the percentage of an establishment’s workforce that takes up coverage, or the out-of-pocket premium for single coverage. We find some evidence suggestive of an inverse relationship between the expansion of Medicaid and the percentage of an establishment’s workers eligible for ESI. In line with other employer- and individual-level studies of the effect of the ACA on employment-related outcomes, we find that employer provision of health insurance was largely unaffected by the Medicaid expansions. Keywords Employer-sponsored health insurance · Premiums · Affordable Care Act · Medicaid JEL Classification I13 · I18 · J33 · J38
Introduction Since the mid-twentieth century, most private health insurance in the United States has been linked to employment. While maintaining the employer-based system, the Affordable Care Act (ACA) dramatically changed options for obtaining non-job-related insurance. It did so by expanding the private group market through the young adult dependent coverage mandate, the
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Jean M. Abraham [email protected]
1
Division of Health Policy and Management, University of Minnesota, 420 Delaware Street SE, MMC 729, Minneapolis, MN 55455, USA
2
Department of Economics, Indiana University Purdue University Indianapolis, Cavanaugh Hall (CA) 509D, 425 University Boulevard, Indianapolis, IN 46202, USA
3
Department of Health Policy and Management, University of Pittsburgh, A664 Crabtree Hall, 130 DeSoto Street, Pittsburgh, PA 15261, USA
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individual market through Exchange-based premium tax credits and cost-sharing reduction subsidies, and public insurance through the Medicaid expansions in states that participated. Some policymakers voiced concerns over whether ACA coverage expansions would undermine the employer-based system of insurance (Avalere Health 2011; Holtz-Eakin and Smith 2010). Possible “crowd out” of private insurance in response to expansions of public insurance has been a long-standing concern in health insurance policy. Crowd out occurs when some portion of those gaining public insurance previously held private insurance, thus raising public expenditures for each newly eligible public enrollee. Having more options for non-job-related insurance, especially at no cost (Medicaid) o
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