IDEAS home Printed from https://ideas.repec.org/a/eee/jhecon/v55y2017icp45-60.html
   My bibliography  Save this article

The spillover effects of health insurance benefit mandates on public insurance coverage: Evidence from veterans

Author

Listed:
  • Li, Xiaoxue
  • Ye, Jinqi

Abstract

This study examines how regulations in private health insurance markets affect coverage of public insurance. We focus on mental health parity laws, which mandate private health insurance to provide equal coverage for mental and physical health services. The implementation of mental health parity laws may improve a quality dimension of private health insurance but at increased costs. We graphically develop a conceptual framework and then empirically examine whether the regulations shift individuals from private to public insurance. We exploit state-by-year variation in policy implementation in 1999–2008 and focus on a sample of veterans, who have better access to public insurance than non-veterans. Using data from the Current Population Survey, we find that the parity laws reduce employer-sponsored insurance (ESI) coverage by 2.1% points. The drop in ESI is largely offset by enrollment gains in public insurance, namely through the Veterans Affairs (VA) benefit and Medicaid/Medicare programs.

Suggested Citation

  • Li, Xiaoxue & Ye, Jinqi, 2017. "The spillover effects of health insurance benefit mandates on public insurance coverage: Evidence from veterans," Journal of Health Economics, Elsevier, vol. 55(C), pages 45-60.
  • Handle: RePEc:eee:jhecon:v:55:y:2017:i:c:p:45-60
    DOI: 10.1016/j.jhealeco.2017.06.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167629616303447
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gina Livermore & David Stapleton & Henry Claypool, "undated". "Health Insurance and Health Care Access Before and After SSDI Entry," Mathematica Policy Research Reports e650433d9c134b5e977c28c86, Mathematica Policy Research.
    2. David N van der Goes & Justin Wang & Katharine C Wolchik, 2011. "Effect of State Health Insurance Mandates on Employer-provided Health Insurance," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 37(4), pages 437-449.
    3. Matthew Lang, 2013. "The Impact Of Mental Health Insurance Laws On State Suicide Rates," Health Economics, John Wiley & Sons, Ltd., vol. 22(1), pages 73-88, January.
    4. Dillender, Marcus, 2015. "The effect of health insurance on workers’ compensation filing: Evidence from the affordable care act's age-based threshold for dependent coverage," Journal of Health Economics, Elsevier, vol. 43(C), pages 204-228.
    5. Molly Frean & Jonathan Gruber & Benjamin D. Sommers, 2016. "Premium Subsidies, the Mandate, and Medicaid Expansion: Coverage Effects of the Affordable Care Act," NBER Working Papers 22213, National Bureau of Economic Research, Inc.
    6. Chen, Susan & van der Klaauw, Wilbert, 2008. "The work disincentive effects of the disability insurance program in the 1990s," Journal of Econometrics, Elsevier, vol. 142(2), pages 757-784, February.
    7. Dave, Dhaval, 2008. "Illicit drug use among arrestees, prices and policy," Journal of Urban Economics, Elsevier, vol. 63(2), pages 694-714, March.
    8. Katherine Baicker & Amitabh Chandra, 2006. "The Labor Market Effects of Rising Health Insurance Premiums," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 609-634, July.
    9. Robert Kaestner & Kosali Ilayperuma Simon, 2002. "Labor Market Consequences of State Health Insurance Regulation," ILR Review, Cornell University, ILR School, vol. 56(1), pages 136-159, October.
    10. Jeffrey Clemens, 2015. "Regulatory Redistribution in the Market for Health Insurance," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 109-134, April.
    11. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-641, June.
    12. Craig Garthwaite & Tal Gross & Matthew J. Notowidigdo, 2014. "Public Health Insurance, Labor Supply, and Employment Lock," The Quarterly Journal of Economics, Oxford University Press, vol. 129(2), pages 653-696.
    13. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 391-430.
    14. Jonathan Klick & Sara Markowitz, 2006. "Are mental health insurance mandates effective? Evidence from suicides," Health Economics, John Wiley & Sons, Ltd., vol. 15(1), pages 83-97.
    15. Jeffrey R. Brown & Amy Finkelstein, 2008. "The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market," American Economic Review, American Economic Association, vol. 98(3), pages 1083-1102, June.
    16. Gruber, Jonathan & Simon, Kosali, 2008. "Crowd-out 10 years later: Have recent public insurance expansions crowded out private health insurance?," Journal of Health Economics, Elsevier, vol. 27(2), pages 201-217, March.
    17. Andersen, Martin, 2015. "Heterogeneity and the effect of mental health parity mandates on the labor market," Journal of Health Economics, Elsevier, vol. 43(C), pages 74-84.
    18. Asako S. Moriya & Kosali Simon, 2016. "Impact of Premium Subsidies on the Take-up of Health Insurance: Evidence from the 2009 American Recovery and Reinvestment Act (ARRA)," American Journal of Health Economics, MIT Press, vol. 2(3), pages 318-343, Summer.
    19. Joan Costa & Jaume Garcia, 2003. "Demand for private health insurance: how important is the quality gap?," Health Economics, John Wiley & Sons, Ltd., vol. 12(7), pages 587-599.
    20. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-183, May.
    21. Gruber, Jonathan, 1994. "State-mandated benefits and employer-provided health insurance," Journal of Public Economics, Elsevier, vol. 55(3), pages 433-464, November.
    22. David M. Cutler & Brigitte C. Madrian, 1998. "Labor Market Responses to Rising Health Insurance Costs: Evidence on Hours Worked," RAND Journal of Economics, The RAND Corporation, vol. 29(3), pages 509-530, Autumn.
    23. James Bailey & Nathan Blascak, 2016. "The effect of state health insurance benefit mandates on premiums and employee contributions," Applied Economics Letters, Taylor & Francis Journals, vol. 23(14), pages 1042-1046, September.
    24. Joanna N. Lahey, 2012. "The efficiency of a group‐specific mandated benefit revisited: The effect of infertility mandates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 63-92, December.
    25. Hamersma, Sarah & Kim, Matthew, 2013. "Participation and crowd out: Assessing the effects of parental Medicaid expansions," Journal of Health Economics, Elsevier, vol. 32(1), pages 160-171.
    26. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
    27. repec:eme:jespps:jes-07-2015-0137 is not listed on IDEAS
    28. Jensen, Gail A & Gabel, Jon R, 1992. "State Mandated Benefits and the Small Firm's Decision to Offer Insurance," Journal of Regulatory Economics, Springer, vol. 4(4), pages 379-404, December.
    29. Feldman, Roger, 1993. "Who pays for mandated health insurance benefits?," Journal of Health Economics, Elsevier, vol. 12(3), pages 341-348, October.
    30. Finkelstein, Amy, 2004. "Minimum standards, insurance regulation and adverse selection: evidence from the Medigap market," Journal of Public Economics, Elsevier, vol. 88(12), pages 2515-2547, December.
    31. Gruber, Jonathan & McKnight, Robin, 2003. "Why did employee health insurance contributions rise?," Journal of Health Economics, Elsevier, vol. 22(6), pages 1085-1104, November.
    32. Boyle, Melissa A. & Lahey, Joanna N., 2010. "Health insurance and the labor supply decisions of older workers: Evidence from a U.S. Department of Veterans Affairs expansion," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 467-478, August.
    33. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(06), pages 814-823, December.
    34. repec:mpr:mprres:6274 is not listed on IDEAS
    35. Madrian, Brigitte & Cutler, David, 1998. "Labor Market Responses to Rising Health Insurance Costs," Scholarly Articles 2643643, Harvard University Department of Economics.
    36. Cseh Attila, 2008. "Labor Market Consequences of State Mental Health Parity Mandates," Forum for Health Economics & Policy, De Gruyter, vol. 11(2), pages 1-34, April.
    37. Jonathan Gruber & Jonathan Zinman, 2001. "Youth Smoking in the United States: Evidence and Implications," NBER Chapters,in: Risky Behavior among Youths: An Economic Analysis, pages 69-120 National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:55:y:2017:i:c:p:45-60. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/505560 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.