James B. Bailey

Did the Affordable Care Act's Dependent Coverage Mandate Increase Premiums?

We investigate the impact of the Affordable Care Acts dependent coverage mandate on insurance premiums. The expansion of dependent coverage under the ACA allows young adults to remain on their parents private health insurance plans until the age of 26. We find that the mandate has led to a 2.5-2.8 percent increase in premiums for health insurance plans that cover children, relative to single-coverage plans. We are able to conclude that employers did not pass on the entire premium increase to employees through higher required plan contributions.

Health Insurance and the Supply of Entrepreneurs: New Evidence from the Affordable Care Act's Dependent Coverage Mandate

Is the difficulty of purchasing health insurance as an individual or small business a major barrier to entrepreneurship in the United States? I answer this question by taking advantage of the natural experiment provided by the Affordable Care Actâs dependent coverage mandate, which allowed many 19-25 year olds to acquire health insurance independently of their employment. This mandate provides a means to estimate the number of potential entrepreneurs discouraged by the current system of employer-based health insurance. A difference-in-difference strategy finds that the dependent coverage mandate led to a 13-24% increase in self-employment among the treated group. The effect is found to be larger for women and for unincorporated businesses. An instrumental variables strategy finds that those actually receiving health insurance coverage as dependents were much more likely to start businesses.

Who Pays for Obesity? Evidence from Health Insurance Benefit Mandates

Is there an obesity externality? In the late 1990s and early 2000s, many state governments began requiring health insurance plans to cover treatments for diabetes. Using difference-in-difference analysis of restricted geocode data from the 1979 National Longitudinal Survey of Youth to compare wages across states with and without diabetes mandates, I find that obese people pay for all of their own increased health costs in the form of lower wages, rather than passing them on to employers, insurers, and co-workers.

Who pays the high health costs of older workers? Evidence from prostate cancer screening mandates

Between 1992 and 2009, 30 US states adopted laws mandating that health insurance plans cover screenings for prostate cancer. Because prostate cancer screenings are used almost exclusively by men over age 50, these mandates raise the cost of insuring older men relative to other groups. This article uses a triple-difference empirical strategy to take advantage of this quasi-random natural experiment in raising the cost of employing older workers. Using Integrated Public Use Microdata Series data from the March Supplement of the Current Population Survey, I find that the increased cost of insuring older workers results in their receiving 2.8% lower hourly wages, being 2% less likely to be employed and being 0.7% less likely to have employer-sponsored health insurance.

Health Insurance Benefit Mandates and the Firm-Size Distribution

By 2010, the average US state had passed 37 health insurance benefit mandates (laws requiring health insurance plans to cover certain additional services). Previous work has shown that these mandates likely increase health insurance premiums, which in turn could make it more costly for firms to compensate employees. Using 1996–2010 data from the Quarterly Census of Employment and Wages and a novel instrumental variables strategy, we show that there is limited evidence that mandates reduce employment. However, we find that mandates lead to a distortion in firm size, benefiting larger firms that are able to self-insure and thus exempt themselves from these state-level health insurance regulations. This distortion in firm size away from small businesses may lead to substantial decreases in productivity and economic growth.

The political roots of health insurance benefit mandates

Purpose - As of 2011, the average US state had 37 health insurance benefit mandates, laws requiring health insurance plans to cover a specific treatment, condition, provider, or person. This number is a massive increase from less than one mandate per state in 1965, and the topic takes on a new significance now, when the federal government is considering many new mandates as part of the “essential health benefits” required by the Affordable Care Act. The paper aims to discuss these issues. Design/methodology/approach - The authors use fixed effects estimation on 1996-2010 data to determine why some states pass more mandates than others. Findings - The authors find that the political strength of health care providers is the strongest determinant of mandates. Originality/value - A large body of literature has attempted to evaluate the effect of mandates on health, health insurance, and the labor market. However, previous papers did not consider the political processes behind the passage of mandates. In fact, when they estimate the laws’ effect, almost all papers on the subject assume that mandates are passed at random. The paper opens the way to estimating the causal effect of mandates on health insurance and the labor market using an instrumental variables strategy that incorporates political information about why mandates get passed.

The Effect of State Health Insurance Benefit Mandates on Premiums and Employee Contributions

ABSTRACT The average US state has 40 benefit mandates, laws requiring health insurance to cover particular conditions, treatments, providers or people. We investigate the extent to which these mandates increase the health insurance premiums paid by employers, and the extent to which these higher premiums are passed on to employees in the form of higher employee contributions. We use state-level data on premiums and employee contributions to health insurance from the insurance component of the 1996–2011 Medical Expenditure Panel Survey. Our main analysis is a fixed effects regression that controls for age, race, income, union membership and the presence of state mandate waivers. We find robust evidence that the average mandate increases premiums by approximately 0.6%, and that mandates lead to similar increases in employee contributions for single-coverage health insurance plans. Alternative specifications using an AR(1) error structure estimate a larger effect of mandates, while those using generalized estimating equations estimate smaller effects. We find that mandates requiring insurers to cover a specific benefit, as opposed to a specific type of provider or person, lead to the largest increases in employee contributions.

The Effect of Certificate of Need Laws on All‐Cause Mortality

OBJECTIVE To test how Certificate of Need laws affect all-cause mortality in the United States. DATA SOURCES The data of 1992-2011 all-cause mortality are from the Center for Disease Controls Compressed Mortality File; control variables are from the Current Population Survey, Behavioral Risk Factor Surveillance System, and Area Health Resources File; and data on Certificate of Need laws are from Stratmann and Russ (). STUDY DESIGN Using fixed- and random-effects regressions, I test how the scope of state Certificate of Need laws affects all-cause mortality within US counties. PRINCIPAL FINDINGS Certificate of Need laws have no statistically significant effect on all-cause mortality. Point estimates indicate that if they have any effect, they are more likely to increase mortality than decrease it. CONCLUSIONS Proponents of Certificate of Need laws have claimed that they reduce mortality by concentrating more care into fewer, larger facilities that engage in learning-by-doing. However, I find no evidence that these laws reduce all-cause mortality.

Gigabit Fiber Networks & Speed Competition in the United States: Cross-Sectional Analysis at the Census Block Level

In the past few years, investment in and construction of fiber gigabit broadband networks has grown substantially in the United States. Entry of these firms to many U.S. cities presents a good opportunity to research the effects of increased competition among broadband providers. This paper uses spatial analysis to evaluate the effects of the entry of fiber gigabit providers on maximum download speeds by estimating the spatial relation of aDSL and cable providers to the nearest fiber gigabit provider. We use broadband provider data at the census block level from 10 U.S. states, which allows for a more accurate measure of competition than previous papers. We find that the spatial relationship between aDSL providers and their nearest fiber gigabit competitor has little impact on download speeds offered by aDSL providers, after controlling for competition, income and housing density. On the other hand, we find that the presence of nearby fiber gigabit providers has a significant and positive effect on the average download speed offered to consumers by cable providers. These contrasting results highlight the different ways broadband providers compete with faster competitors and the importance of distinguishing between these different modes of competition in research on the subject of broadband competition.

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.