Coleman Drake

The value of waivers from the affordable care act

ABSTRACT The Affordable Care Act requires health insurance plans to offer coverage without annual limits. This requirement began to be enforced in September of 2010, but some employers received special waivers that delayed the start of enforcement for them. Using data from the Center for Research in Security Prices (CRSP), we conduct an event study of the stock prices of these companies as their waivers were announced. We find that waivers do not lead to a statistically significant increase in the stock prices of waiver recipients.

What drives insurer participation and premiums in the Federally-Facilitated Marketplace?

We investigate determinants of market entry and premiums within the context of the Affordable Care Act’s Marketplaces for individual insurance. Using Bresnahan and Reiss (1991) as the conceptual framework, we study how competition and firm heterogeneity relate to premiums in 36 states using Federally Facilitated or Supported Marketplaces in 2016. Our primary data source is the Qualified Health Plan Landscape File, augmented with market characteristics from the American Community Survey and Area Health Resource File as well as insurer-level information from federal Medical Loss Ratio annual reports. We first estimate a model of insurer entry and then investigate the relationship between a market’s predicted number of entrants and insurer-level premiums. Our entry model results suggest that competition is increasing with the number of insurers, most notably as the market size increases from 3 to 4 entrants. Results from the premium regression suggest that each additional entrant is associated with approximately 4% lower premiums, controlling for other factors. An alternative explanation for the relationship between entrants and premiums is that more efficient insurers (who can price lower) are the ones that enter markets with many entrants, and this is reflected in lower premiums. An exploratory analysis of insurers’ non-claims costs (a proxy for insurer efficiency) reveals that average costs among entrants are rising slightly with the number of insurers in the market. This pattern does not support the hypothesis that premiums decrease with more entrants because those entrants are more efficient, suggesting instead that the results are being driven mostly by price competition.

A Kinked Health Insurance Market: Employer-Sponsored Insurance under the Cadillac Tax

The Affordable Care Act imposes a 40 percent excise tax on high-cost “Cadillac” health insurance plans in excess of defined thresholds beginning in 2020. Using economic theory and a microsimulation model, we predict how employers will respond to the Cadillac tax by adjusting wages and health insurance benefits. In its first year, 13.34 percent of individual and 16.73 percent of family employer-sponsored health insurance plan holders will be affected by the Cadillac tax; these percentages will increase to 35.33 and 42.01 percent, respectively, by 2025. Over 99 percent of those affected will reduce their health insurance benefits to the thresholds. Effectively, the Cadillac tax will impose a hard cap on health insurance benefits, causing a clustering of benefits at the thresholds and a sharp reduction in the variance of benefits. Revenue from the Cadillac tax through 2025 will total

Rural Enrollment in the Federally Facilitated Marketplace.

204 billion, all but

Employer-Sponsored Insurance Offers: Largely Stable In 2014 Following ACA Implementation

42 million of which will stem from “indirect” revenues—health insurance benefits shifted into taxable wages. This shift will increase wage growth and decrease benefit growth for those affected by the Cadillac tax. We simulate a cap on the tax exclusion of employer-sponsored insurance premiums and conduct sensitivity analyses with linear regression metamodeling.