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Employer-Sim Microsimulation Model: Model Development and Application to Estimation of Tax Subsidies to Health Insurance

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  • G. Edward Miller
  • Thomas M. Selden
  • Jessica S. Banthin

Abstract

Employment-related health coverage is the predominant form of health insurance in the nonelderly, US population. Developing sound policies regarding the tax treatment of employer-sponsored insurance requires detailed information on the insurance benefits offered by employers as well as detailed information on the characteristics of employees and their familes. Unfortunately, no nationally representative data set contains all of the necessary elements. This paper describes the development of the Employer-Sim model which models tax-based health policies by using data on workers from the Medical Expenditure Panel Survey Household Component (MEPS HC) to form synthetic workforces for each establishment in the Medical Expenditure Panel Survey Insurance Component (MEPS IC). This paper describes the application of Employer-Sim to estimating tax subsidies to employer-sponsored health insurance and presents estimates of the cost and indcidence of the subsidy for 2008. The paper concludes by discussing other potential applications of the Employer-Sim model.

Suggested Citation

  • G. Edward Miller & Thomas M. Selden & Jessica S. Banthin, 2014. "Employer-Sim Microsimulation Model: Model Development and Application to Estimation of Tax Subsidies to Health Insurance," Working Papers 14-46, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:14-46
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    References listed on IDEAS

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    1. Chernew, Michael & Cutler, David & Keenan, Patricia S., 2005. "Increasing Health Insurance Costs and the Decline in Health Insurance Coverage," Scholarly Articles 2660660, Harvard University Department of Economics.
    2. Thomas M. Selden, 2009. "The Impact of Increased Tax Subsidies on the Insurance Coverage of Self-Employed Families: Evidence from the 1996–2004 Medical Expenditure Panel Survey," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
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    4. Jonathan Gruber, 2008. "The Tax Exclusion for Employer-Sponsored Health Insurance," NBER Chapters, in: Economic Analysis of Tax Expenditures, National Bureau of Economic Research, Inc.
    5. Thomas M. Selden & Didem M. Bernard, 2004. "Tax Incidence and Net Benefits in the Market for Employment-Related Health Insurance: Sensitivity of Estimates to the Incidence of Employer Costs," International Journal of Health Economics and Management, Springer, vol. 4(2), pages 167-192, June.
    6. Royalty, Anne Beeson, 2000. "Tax preferences for fringe benefits and workers' eligibility for employer health insurance," Journal of Public Economics, Elsevier, vol. 75(2), pages 209-227, February.
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