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How Will The Affordable Care Act Change Employers’ Incentives To Offer Insurance?

Author

Listed:
  • Jean M. Abraham, Ph.D.
  • Roger Feldman, Ph.D.
  • Peter Graven, M.S.

Abstract

This study investigates how changes in the economic incentives created by the Affordable Care Act (ACA) will affect the probability that private-sector U.S. employers will offer health insurance. Using the Medical Expenditure Panel Survey Insurance Component for 2008-2010, we predict employers’ responses to key ACA provisions. Our simulations predict that overall demand for insurance will rise, driven by workers’ desire to avoid the individual mandate penalty and the availability of premium tax credits in exchanges. Our analyses also suggest that the average probability of an establishment offering insurance will decline from .83 to .66 with ACA implementation, although there is considerable variation by firm size, industry and union status.

Suggested Citation

  • Jean M. Abraham, Ph.D. & Roger Feldman, Ph.D. & Peter Graven, M.S., 2014. "How Will The Affordable Care Act Change Employers’ Incentives To Offer Insurance?," Working Papers 14-02, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:14-02
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    File URL: https://www2.census.gov/ces/wp/2014/CES-WP-14-02.pdf
    File Function: First version, 2013
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    Citations

    Blog mentions

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    1. Key research-oriented government agencies media members should know about
      by ? in Journalist's Resource on 2014-02-28 08:12:08

    More about this item

    Keywords

    health insurance; Affordable Care Act; premium tax credits; employer behavior;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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