Philip F. Cooper

The Effect of SCHIP Expansions on Health Insurance Decisions by Employers

This study uses repeated cross-sectional data from the Medical Expenditure Panel Survey—Insurance Component (MEPS-IC), a large nationally representative survey of establishments, to investigate the effect of the State Childrens Health Insurance Program (SCHIP) on health insurance decisions by employers. The data span the years 1997 to 2001, the period when states were implementing SCHIP. We exploit cross-state variation in the timing of SCHIP implementation and the extent to which the program increased eligibility for public insurance. We find evidence suggesting that employers whose workers were likely to have been affected by these expansions reacted by raising employee contributions for family coverage options, and that take-up of any coverage, generally, and family coverage, specifically, dropped in these establishments. We find no evidence that employers stopped offering single or family coverage outright.

The effect of dental insurance on dental care use and selection bias.

Objectives:We examine the effect of dental insurance coverage on the probability of having a dental care visit in light of selection bias. Methods:We use data from the 2003 Medical Expenditure Panel Survey and use 3 different approaches to control for selection bias. First, we use a probit specification and include a rich set of independent variables that we posit control for unobserved attitudes toward risk and health care. Second, we use an instrumental variable model with family employment status as our instrument. Finally, we use a nonparametric approach to identify the upper and lower bounds of a dental insurance effect. We also ran a base probit model that did not include controls for attitudes toward risk and health care. Results:The base probit, the probit including measure of attitudes, and the instrumental variable models provided similar estimates of the effect of dental insurance on the probability to seek dental care. This may indicate that selection bias may not be a concern. All estimates were within the bounds obtained through the nonparametric approach. Conclusions:Despite concerns of the potential endogeneity of dental insurance in models that estimate dental care use, we find evidence that these concerns may be unfounded.

Employer Contribution Methods and Health Insurance Premiums: Does Managed Competition Work?

We derive a two-stage model in which health plans first compete to be selected by employers and subsequently compete to be chosen by employees. We identify the key determinants of competition and show that increasing competition at one stage often comes at the expense of competition at the other stage. Many economists and policymakers have argued that in order to increase competition among health plans, employers should offer multiple plans and structure premium contributions to make employees more price sensitive. While our theoretical model shows that following this policy prescription may not actually lead to lower premiums, our empirical analysis provides some support for this recommendation. We also find that if employers instead pay the full premium, premiums increase when they offer additional plans. These results have important implications for both employers and policymakers.

A closer look at the managed care backlash

Background:Much anecdotal evidence exists regarding the managed care backlash of the late 1990s, but limited empirical evidence is available. Objectives:Using a unique series of employer surveys, we examined trends in enrollment rates in health maintenance organizations (HMOs) and other plan types between 1997 and 2003. Research Design:We present enrollment rates in employer-sponsored health plans by plan type. These plan-level enrollment rates are disaggregated by whether or not enrollees had a choice of plan types and by firm size and year. Subjects:Employees who were enrolled in employer-sponsored health insurance in private sector establishments. Results and Conclusions:Although we found evidence of a decline in the popularity of HMOs, it occurred later than indicated in earlier studies. In our data, HMO enrollment rates fell from roughly 32% to 26% between 1997 and 2003, with most of the decline occurring after 2001. Earlier studies reported that the decline in HMO enrollment rates occurred between 1996 and 1998, and between 2000 and 2001. In addition, an interesting story emerged when we examined trends by firm size. We found evidence of a decline in the HMO enrollment rate for large employers starting in 1998. However, this was offset by an increase in the HMO enrollment rate in small employers, which explains the stability in our figures before 2002. Our data also indicated that when workers were given a choice between an HMO and other plan types, workers increasingly opted for the non-HMO plan during this time period.